People who are looking for a safe way to invest their money often purchase bullion coins as an option that will maintain and even increase in value over time. Bullion can serve an important purpose for investors who are looking for price increases on precious metal that will ultimately give them a good return on their investment. Bullion coins can also act as an inflation hedge protecting investors from growing prices and inflation that could affect their investments. Many investors view bullion as a survival investment in case of any kind of financial emergency where the national currency loses its value. Because bullion coins maintain their value, they can be a safe and trustworthy financial choice.
Types of Bullion Coins
Bullion coins are made from precious metal, usually gold and silver but they may also be made of platinum or palladium. There are a few different series of these types of coins depending on the country of origin. The U.S. has the official American Eagle series of coins available from United States Mint and the Royal Canadian Mint offers the Canadian Maple Leaf series of bullion coins. The South African coin series, Krugerrand and the Swiss Vreneli are only available in gold. Most countries mint their bullion coins in a variety of weights, usually multiples or fractions of one troy ounce but some can be produced in kilograms or even heavier weights. Bullion coins typically sell for more than the market price of gold or silver on the commodity exchanges. This can be because of their small size and the costs associated with manufacture, storage and distribution as well as the underlying demand for the coins and their relative liquidity.
The Value of Bullion
When it comes to bullion coins as a form of investment, they have stood the test of time as a store of value for thousands of years. More recently, gold prices have been steadily on the rise since 2000 which has attracted even more interest in this kind of investment. Bullion coins are more valuable than other types of coins such as collector coins or Numismatic coins because of their metal content. The value of a coin depends on the level of gold or silver content rather than the mint mark or year it was minted. Modern bullion coins have the gold or silver content stamped on them while some older coins may not. Coins with more precious metal content will maintain and increase in value compared with other types of coins.
Some of the most widely traded bullion coins in the world are American Eagle gold bullion coins which are minted from 22 carat gold and are 91.67% purity. American bullion coins are available in four weights – 1/10, ¼, ½ and 1 troy ounce which are easily understandable weights for trading and bartering. Other popular modern bullion coins which can work well for investing are South African Krugerrands because they are some of the cheapest and best known of the different available series. American gold coins have a higher premium than Krugerrands but they are more readily recognized in the U.S. and can carry smaller premiums than many foreign coins of comparable size.
Investing in Gold or Silver Coins
Investors can usually choose between gold and silver bullion coins although they may sometimes have the option of purchasing platinum. Often purchasing a combination of both gold and silver coins can be the most beneficial unless they are making a smaller investment in which case silver might be the best option. A larger investment of more than $30,000 will usually be a purchase of both gold and silver coins. Because silver coins have a smaller monetary value than gold coins, they can be useful in lower value transactions. Larger investments in silver can create a problem because it can result in about fifty times the bulk and weight compared to an investment in gold Silver bullion coins might lead to storage and handling challenges with a larger investment so in that case gold becomes a better choice. It is important when investing in coins to consider the method of storage and any costs associated with safeguarding the bullion such as renting an offsite facility or safe deposit box.
Bullion coins are a way for people to keep their assets in gold or silver as a form of protection that will preserve their wealth. Investing in precious metal is a way to safeguard hard earned money so that it is not affected by inflation, deflation or unexpected economic problems. Gold and silver are also not affected by anyone else’s ability to pay as is the case with bonds and bank savings. No matter what happens, precious metal always maintains its value and can act as a solid foundation to protect an investor’s wealth. A well-informed investor who purchases bullion coins can benefit from an investment that will hedge future financial uncertainties.