Many people are starting to get interested in how to buy gold. For those that are new to buying gold it can be confusing on the best way to own gold. Buying gold is an important decision and finding an experienced gold brokerage firm can be a good idea to get your questions answered.
The true benefit of owning gold comes from owning physical gold which is different than gold funds, gold mining share, and other gold accounts which leave you vulnerable to downward trends in price.
For greater understanding which is the best way to buy gold for yourself you have to understand the two basic types which are gold bullion and numismatic gold coins.
There are many different forms of gold bullion coins or bars which are issued by countries around the world. The most popular gold bullion coin is the American Gold Eagle. Others forms of gold bullion include Canadian Maple Leaf, Austrian Philharmonic, and the South African Krugerrand.
The price of gold bullion is determined by the spot price of gold plus a small premium for the purchase of the physical gold. Gold bullion can be purchased in 1/20, 1/10, 1/4, 1/2 and 1 ounce sizes.
Numismatic gold coins which are also called rare gold coins have a few advantages over gold bullion coins which adds to their value. Numismatic gold coins are not minted any more unlike gold bullion coins which are minted every year. The scarcity of rare gold coins adds an intrinsic value beyond the just the gold content. Numismatic gold coins are what is called a private position in gold which allows sale of these coins without a 1099-b IRS reporting.
Monday, August 30, 2010
Friday, August 6, 2010
How to Determine the Value of Gold Coins
Although there is a lot of buzz in the online world about gold coins these days, most people are disappointed with the returns that get from this precious metal. The main reason behind this is the lack of proper knowledge regarding the value of a coin. Several factors influence the value of gold coins. Let us briefly look at some of these factors.
Rarity
This is one of the most important determinants of coin value. The rarity of a coin depends on the limited number of coins originally minted and the surviving population. In general, the rarer a gold coin is, the higher is its value. For example, a rare 1933 Double Eagle Gold Coin was sold for $7.59 million at an auction in New York in 2002. Rare coins can be obtained from auctions, coin shows and dealers.
Grade or Condition
The condition of a coin largely influences its value. If a coin is in better condition, it is assigned a higher grade by the Professional Coin Grading Service (PCGS) and the Numismatic Guarantee Corporation (NGC). The higher the grade of a coin, the higher will be its value. On the other hand, if a coin’s condition has deteriorated over time, such as scratches on the surface, damage of any kind or wear over the years. it is assigned a lower grade by the authorities.
Quality
The quality of a coin plays an important role in determining its value. However, it is not easy to determine the quality of a coin properly and an expert’s eye is needed for this. The quality of a coin depends on many characteristics, such as flawless mint state, survival condition, strike, luster, coloration and overall eye appeal, which give it a unique presence among other coins of the same grade or design. The better the quality of a coin, the greater is its value.
Popularity
Popularity also determines a coin’s value. Some coins possess great value simply because they are more popular. For example, the St. Gaudens Double Eagle, which is considered to be an excellent work of art, is extremely popular and thus holds immense value. On the contrary, the coins that are in less demand, such as the US “pattern” coins and half-dimes, possess lower market value. Popular gold coins would therefore offer better monetary value as well.
Price
All the characteristics of a coin including rarity, condition, quality, popularity, and price when combined together provide a coin its true value.
Rarity
This is one of the most important determinants of coin value. The rarity of a coin depends on the limited number of coins originally minted and the surviving population. In general, the rarer a gold coin is, the higher is its value. For example, a rare 1933 Double Eagle Gold Coin was sold for $7.59 million at an auction in New York in 2002. Rare coins can be obtained from auctions, coin shows and dealers.
Grade or Condition
The condition of a coin largely influences its value. If a coin is in better condition, it is assigned a higher grade by the Professional Coin Grading Service (PCGS) and the Numismatic Guarantee Corporation (NGC). The higher the grade of a coin, the higher will be its value. On the other hand, if a coin’s condition has deteriorated over time, such as scratches on the surface, damage of any kind or wear over the years. it is assigned a lower grade by the authorities.
Quality
The quality of a coin plays an important role in determining its value. However, it is not easy to determine the quality of a coin properly and an expert’s eye is needed for this. The quality of a coin depends on many characteristics, such as flawless mint state, survival condition, strike, luster, coloration and overall eye appeal, which give it a unique presence among other coins of the same grade or design. The better the quality of a coin, the greater is its value.
Popularity
Popularity also determines a coin’s value. Some coins possess great value simply because they are more popular. For example, the St. Gaudens Double Eagle, which is considered to be an excellent work of art, is extremely popular and thus holds immense value. On the contrary, the coins that are in less demand, such as the US “pattern” coins and half-dimes, possess lower market value. Popular gold coins would therefore offer better monetary value as well.
Price
All the characteristics of a coin including rarity, condition, quality, popularity, and price when combined together provide a coin its true value.
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