Collecting Gold Coins

Collecting Gold Coins

Collecting gold coins can be a fascinating hobby as well as a fruitful one but it is very important to keep in mind several factors when collecting gold coins.

Firstly one should have in mind what sort of gold coins one wants to collect. There are many and some can be quite pricey. How much do you want or can you afford to spend? If you are on a limited budget you can easily start with some of the smaller coins and build up a collection perhaps over a period of time. One can get one tenth and even one twentieth of an ounce gold coins these days and these are much easier to purchase than the traditional one ounce gold coins.

Next, you might like to collect coins of a particular country or a particular series such as Canadian Maples or South African Krugerrands. Some people like to collect Proof coins rather than used or uncirculated. These tend to be more expensive of course as they are coins that have been especially struck for collectors and are of a much higher quality than the brilliant uncirculated coins.

You will need to source a good reputable dealer from whom you can buy your gold coins. If possible try to buy your coins from the same dealer every time as then, if the time comes to sell some, the dealer will know the coins and generally offer you the best price for those you might sell. Dealers also like to have repeat customers and will tend to look after them and sometimes even offer a higher quality service.

If you decide to buy rare or proof sets be aware these can be more expensive, but if you have the money they are generally well worth the cost as, over time, they will appreciate in value quite nicely.

In addition buying larger amounts of gold means that you pay less in mark up costs from the dealer or mint than if you just buy a small one tenth ounce coin. The shipping and packaging might even be as much as the cost of the coin for a small coin.

What ever you decide to buy, the main point is to study and learn as much as you can about collecting gold coins and probably even more importantly, have fun doing it!

Which Gold to Buy

Which Gold to Buy

Which gold to buy can be an important question for the gold enthusiast.

There are so many types of gold one can buy. These can include gold investments such as stocks in mining companies or gold futures, gold accounts such as goldmoney.com or gold bullion such as gold bars or coins.

Firstly, gold investments, stocks and futures are very much a professional market and not for the hobbyist, more for the speculator in gold. For this one needs experience and a very good and trustworthy commodity broker. In addition there are some tax considerations to be aware of which may not apply with buying gold coins for collections.

Gold accounts can be held with banks in some countries but not all. This is an area banks are moving away from. However there are private companies that store actual gold in escrow for those who have accounts with them and this is one way one can own and store gold, usually purely for investment purposes.

Then we have gold bullion. This is in the form of gold bars and gold coins. When it comes to which gold to buy, this is probably the best way for most people. It is easy to obtain gold coins and small bars. They are not difficult to store and, best of all, they retain their value even in times of crisis or economic need.

However, sometimes it is a matter of personal choice which gold to buy. Either way there are some criteria to be aware of.

• Learn as much as you can about the various type of gold you can buy.
• Select your plan of which gold to buy and what your budget is.
• Do an extensive browse on which gold you want to buy. Check out the various web sites such as which gold to buy for example.
  

Which gold to buy is your choice, but which ever type you choose, ensure you have fun and enjoy your gold, whatever form it may take!

Why Buy Gold

Why Buy Gold

'Why buy gold?' is a question often asked by potential gold bullion collectors.

As we know, gold has been steadily rising since last year and has recently experienced a fall and has stablised out currently. However it appears it may be on the rise again and reaching for a new level.

In actual fact, in the long term, gold has proven over the past 200 years to be very stable. The value of gold as a purchasing power, distinct from the purchase power of the US dollar for example, still remains very much the same or better.

If you look back through history you would find that one ounce of pure gold has hardly changed at all. One ounce of pure gold now still purchases the same as it did 200 years ago. The change in paper currency however, due to manipulation and removing the gold backing from currencies world wide, has been dramatic and can be shown by the consumer price index. What originally cost 20 dollars in 1800 cost 216.86 dollars in 2005. Yet one ounce of gold still purchases today what it did 200 years ago. In fact it is tending to purchase more.

It is likely that this scenario will continue and over the next 200 years, inflation, recession etc. will continue as more paper money is printed. Yet the value of the pure gold troy ounce will remain the same in terms of purchasing power.

This is a good reason to purchase gold.

The next question is 'what sort of gold should one buy?'

Out of the possible four types, stocks, exchange traded funds (ETFs), futures and bullion, it is the bullion that will retain its value. Stocks can crash, futures can change wildly and exchange traded funds, although based upon actual stocks, rather like the dollar when it was backed by gold, still has the volatility of trading in a similar way to stocks and futures.

Bullion has a history of remaining stable, whether it be gold bars or gold coins, both have the stability of being actual gold rather than a representation of it. Both have the assurance of retaining their value even when there is a stock market downturn or an economic recession and both have an instant salability at the value of gold at the time of the sale.

Plus, gold coins and gold bars can be easily transported and stored making them the ideal medium to invest value in.

This then, for the collector as well as the investment or even just the hobbyist, is the answer to the question, why buy gold.

Gold vs. Silver

Gold vs. Silver

Sometimes, when it comes to what to buy, it is a case of gold vs. silver. Both are equally a good investment but which one could you call the best?

There are two prime factors that will influence whether to buy gold or silver. They are affordability and taste.

Gold
For some people it is gold all the way. Even if they cannot afford the one ounce gold coins or gold bars there are smaller coins such as the one tenth gold coins, which are more affordable. Unfortunately they also command a higher price in proportion as the mint's or dealer's mark up has to be added, plus expenses, shipping etc. Usually, the smaller the coin, the higher the additional costs are in relation to it.

The cost of the gold if you are buying 5 ounces or a kilo of gold coins or bars is much less than if you buy a one tenth ounce gold bullion bar.

Silver
Economically for some people, silver is the way to go. An ounce of silver is affordable for just about anyone. Silver is currently running at around 12 USD per ounce. A big difference to gold at 550 to 600 USD an ounce. It is possible to buy one kilo silver coins as well as one or two ounce coins. If you are buying silver purely for the silver sake and not interested in it from a coin collector's point of view, then junk silver or bags of old silver coins may be the way to go. Keep in mind that there is usually a higher margin above spot price for buying silver from a mint than for buying gold.

The other option is to strike a balance and buy both gold and silver. Perhaps buy some gold coins to keep for the long term maybe more infrequently and, on a more regular basis, buy silver coins. This can be a happy medium. If the need ever comes to sell but you do not want to sell your gold you can always sell small amounts of silver to tide you over and still retain your most valuable asset.

So when it comes to gold vs. silver, there really is no contest. Each have their place and each have their advantages.

Gold Value

Gold Value

We can see that the gold value continues to rise against the dollar but what does that really mean?

An interesting article by Martin Presler shows the true value of gold pointing out that, at the best, if the US reverted to a gold backed dollar then it would be $52,237.96 dollars for a gold backed dollar.

How did he arrive at that extraordinary conclusion you might wonder? Well it is simple enough.

The term for all money in the US is M3. This would include all the currency in circulation, held in various bank accounts, funds, money market funds, deposits, Eurodollar deposits held at all banks and any other loose change. All would make up the M3. However this does leave out the millions of dollars held by foreign banks and euros, or other currencies, held by non US Residents and so forth.

The total of all this money, as at the week ending Feb 13th 2006, adds up to the princely sum of 10,236.3 billion dollars. As he says,

"10,236.3 Billion dollars rolls right off the tongue but it really is... $10,236,300,000,000!"

Now the US government hold a substantial amount of gold in it's vaults. The government claims it is 800 tonnes. Martin Presler claims it is probably closer to 400 tonnes but says lets split the difference and call it 600 tonnes.

He then divides 6000 tonnes of gold by the amount of money, giving 1,706,050,000 dollars per tonne.

With 2240 pounds in a tonne that amounts to 761,629,46 dollars per pound and as there are 14.58 troy ounces of gold in each pound that makes 52,237.96 dollars per ounce of gold!

So, just look at that. If the dollar was 100 percent backed by gold, then gold would have to be 52,237.96 dollars per ounce.

Just how much paper money is out there?

You can look at this two ways. Either gold is worth a lot more than we ever imagined or the paper money we use is worth less than a matchstick on a hot day.

More information is available at Gold Value

Which ever way you look at it, the value of gold looks set to continue it's rise and it seems fairly safe to buy gold bullion in pretty much any form.

Gold Future

Gold Future

What will be in the gold future we are often asked.

Of course no one knows the future and there are many factors that affect the value or price of gold. But if one judges by the current activity of gold over this past year or so, it looks like the value of gold is going to just continue to rise.

How does that affect the gold coin collector?

Basically it is good news. It means that the gold coins that the collector studiously accumulates only improve in value over the years. Actually it is probably not so much the value of gold increasing as the value of the dollar declining against the value of gold.

A recent article pointed out that there have been so many dollars printed up that for the US to return to the gold standard would mean that every ounce of gold would cost over 52 thousand printed dollars. This means that whereas 100 years ago it only took 20 dollars to buy an ounce of gold. A few years ago 280 dollar bought an ounce, these days it will take 550 to 590 currently to buy an ounce of gold and, if the gold standard was reintroduced, then it would take 52 thousand dollars to buy an ounce of gold. Gold has certainly not changed. But the dollar has!

This demonstrates that the dollar has seriously deteriorated since the gold standard was dropped but that the value of gold continues to remain high.

It is most likely, in my opinion, that gold will continue to improve in value against the dollar provided that more dollars are printed than are needed just to manipulate the economy, and that those people who collect and hold real gold will have a distinct advantage over those who hold dollars only.

This applies to gold coins, gold bars, biscuits, jewellery and any other form of real gold one has.

Even if one paid top dollar for a proof gold coin 2 or 3 years ago the value of that coin will now be over the total cost of purchase and there is no sign that this will decrease.

What about collecting coins and bars in the future? Well with the likelihood of a continual rise in gold (more properly expressed by, "it takes more dollars to buy an ounce than it did before", then the sooner one buys gold the better off one will be.

So the gold future looks bright and there is good sense in continuing to buy as much gold as one can get one's hands on!

How Much are Gold Coins

How Much are Gold Coins

How much are gold coins is a question that is asked everyday as the value of gold moves fluctuates.

When you buy gold coins you also pay for the dealers mark up or premium as well as shipping and sometimes insurance costs. Because of this additional cost it can take a while before you recoup the value of what you have spent.

But gold has been rising and has jumped from around 250 US dollars per ounce five years ago to over 600 USD an ounce. If you bought a one ounce gold coin 2 years ago you would have paid the value of one ounce of gold plus some extra to the dealer, maybe an additional 20 percent as well as shipping, another 5-10 dollars maybe. However, since gold has risen so dramatically, you will have doubled the value of your gold coin to cover the dealer's profit and the shipping and made a profit yourself, if you were to sell of course.

According to the U.S. Geological Survey, "Of the 193,000 metric tons of gold discovered to date, 62% is found in just four countries on earth. All the gold discovered thus far would fit in a cube 22 meters on a side." 20 to 30 percent of this is held in bank vaults and the balance, 70 to 80 percent, is mostly held privately in the form of jewelry, coins and bullion.

Gold coins are a significant part of the total gold in the world.

It is quite likely that gold will continue to rise and that, even though buying gold coins now while gold seems 'high' may not look like a good idea, gold is something that has traditionally held its purchasing value for over 200 years. It seems it is fiat currency (the dollar) that is losing its purchasing value. It makes sense therefore to keep and even add to one's own gold ‘reserves’ in the long term.

'How much are gold coins?' becomes not such an important question then as 'How much gold can I own?'