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Gold Investing 101

Gold prices increased over 350% between the years 2001 and 2010. This price increase has caused the investment demand for gold coins to increase dramatically. Investing in gold coins is usually seen as safer than purchasing gold stocks or mutual accounts because the price of gold remains largely unaffected by economic and political instability and is usually determined solely by supply and demand.

Types of Gold Investment Coins

Most experts will advise purchasing bullion gold coins instead of collector coins. Bullion coins are precious metals in bulk form that are traded in commodity markets. The value of these coins is determined by their mass and purity. Therefore, larger coins that are higher in fineness will always be worth more money. Bullion coins are very different from collector or numismatic coins. The value of these coins depend on their rarity, design and finish. Collector coins are produced by individual companies and often come with very high prices.

Karen Aho, a writer for MSN Money, explains that people should watch out for companies selling high-priced collector coins. Some of these companies make false claims, such as “the government can’t confiscate collector coins” to influence you to buy their coins.

Bullion coins are produced by many countries including Australia, France and Malaysia. However, most investors usually purchase coins produced in the United States, Canada, South Africa, China and Austria. The information on these coins is as follows:

The American Gold Eagle is minted in.9167 fine gold, which is equivalent to about 22 karats. The coin is sold in sizes of 1/10 oz, 1/2 oz and 1 oz and usually can be purchased at a premium of 6% over gold spot price.

The Canadian Gold Maple Leaf is minted in.9999 fine gold and can be purchased in sizes of 1/20 oz, 1/10 oz, 1/4 oz, 1/2 oz, or 1 oz. This coin can usually be purchased for a 5% over gold spot price.

The South African Krugerrand comes only in one size of 1.0909 troy ounces. The coin is made from gold alloy that is 91.67% pure. The premium of the Krugerrand is among the lowest of all national coins at around 4% above spot price.

The Austrian Philharmonic is 24 karat and is produced from 99.9% fine gold. The coin is offered in four different weights ranging from 1/10 oz to 1 oz. The premium for this coin ranges between 5% and 7% above spot price.

The Chinese Panda is made from 99.9% fine gold and is offered in five different sizes: 1 oz, 1/2 oz, 1/4 oz, 1/10 oz and 1/20 oz. Each coin is issued with a legal tender value of 500, 200, 100, 50 and 25.

Bina Brown, a writer for CNN, explains that bullion coins produced by various countries around the world are often a sound investment. She says that these coins are “immediately recognized worldwide and any coin dealer should be happy to buy them on the spot at the current price.”

Where to Buy Gold Coins

Barry Stuppler, president of metals dealer Stuppler & Co., suggests exercising extreme caution when looking for any gold dealer. He explains that it is best to look for someone that is a member of the Professional Numismatists Guild. The Professional Numismatists Guild (PNG) is a nonprofit organization that many of the world’s top metal experts belong to.