Are you interested in investing in gold coins? These assets are tangible, free of counterparty risk, highly liquid, portable, confidential, and an excellent store of value.
Although there are two categories of gold coins to consider, bullion and numismatic, the former is considered a better fit for investors. Prior to making such a valuable investment, there are different factors for buyers to take into account, such as purity, hallmarking, making charges, and packaging.
There are numerous precious metal dealers, like Gold Alliance Capital, helping people invest in gold IRAs.
Follow the tips below to purchase the best bullion.
Consider their purity
The starting point of your shopping journey for the best gold coins is checking their purity. It’s measured in two ways, karat (KT) and fineness, the former of which is more frequently used. 24 Karat is known to be the purest form of this yellow metal, which contains 24 parts of it. For comparison, 22 Karat gold is made of twenty-two parts of this precious metal and two parts of other less noble metals like silver or zinc to improve its durability.
Another important parameter used to measure the purity of the precious yellow metal is fineness. Even the purest form is likely to contain an insignificant amount of impurities. The fineness of gold coins is basically the weight of this metal in relation to the total weight of the coins, not excluding the impurities. Consequently, 24 Karat has a purity of 99%, while 22 Karat has a purity of 99.6%.
Gold coins can be purchased in different purities, such as 24 Karat, 23 Karat, 21 KT, 20 KT, or 18 KT. As far as investment purposes are concerned, investors should opt for 22 or 24 Karats. Regarding weight, such coins range from a little as 0.5 to a hundred grams. Nevertheless, most people prefer weights of ten grams or less. Find out what a carat is and how it relates to a karat.
Look for hallmarking
Another factor to consider when choosing the best gold coins is hallmarking. Besides checking purity, buyers are always advised to pay special attention to hallmarks. Hallmarking serves as proof of the credibility and validity of purity claims. For instance, the Indian government has created the BIS (Bureau of Indian Standards) as a regulatory body to ensure purity standards are maintained. Gold items that meet the strict requirements are stamped to certify their purity levels.
In addition, the Indian government has required four components to be hallmarked on gold items since the first of January 2017. These components include the BIS logo, the logo of the hallmarking center, fineness and purity in karats, as well as the identification number and mark of the jeweler. These hallmarks are believed to save buyers plenty of time and effort, which is otherwise wasted on authenticating coins.
Consider making charges
Another factor to have in mind during your shopping journey is making charges. The manufacturing process has an impact on the making charges applied by jewelers on coins and other ornaments. The making charges imposed on gold coins are usually between eight and sixteen percent of the actual value of the metal, which is lower compared to charges for jewelry like earrings, rings, necklaces, etc. Furthermore, the making charges for jewelry start from eight percent but tend to go much higher, based on craftsmanship.
Pay attention to the packaging
Another crucial aspect to factor in is the packaging, which should be tamper-proof. Such packaging provides protection against fraud, damage, and counterfeiting. It has to be tamper-proof to make sure fineness and purity stay intact. It should be neither torn nor opened until it arrives in your hands.
Consider the most popular coins for investment
Investors are advised to purchase sovereign gold coins, which are the most popular on a global level and the most convenient to sell. Some of them are 22-karat, while most of them are 24 karats. An aspect they all share is having an ounce of gold and purity guaranteed by the government. The American Gold Eagle is 22-karat with a purity of .9167 and a face value of $50. It’s backed by the US government and can be purchased in half, quarter, and tenth-ounce denominations.
The Canadian Maple Leaf of one ounce has a purity of .9999 and a face value of $50. Investors can buy it in half, quarter, tenth, and twentieth-ounce denominations. It’s backed by the Commonwealth of Canada and considered the most secure coin in the world owing to the advanced security measures taken by the Royal Canadian Mint. The following link, https://en.wikipedia.org/wiki/Royal_Canadian_Mint, explains the most important information about the history, organizational structure, and security of the Royal Canadian Mint.
The Austrian Philharmonic of one ounce is backed by the Republic of Austria and has a purity of .9999. It can be bought in half, quarter, tenth, and twentieth-fifth-ounce denominations. It’s unquestionably the widest coin currently minted, and it was the top-selling one until 2001. The Australian Kangaroo of one ounce also has a purity of .9999 but a face value of 100 Australian dollars. Investors can purchase it in half, quarter, and tenth-ounce denominations.
Additionally, the Australian Kangaroo is backed by the Australian government. Another thing you should know about it is an interesting fact saying that the Perth Mint produces a brand new Kangaroo depiction every year. Conversely, the South African Gold Krugerrand is 22-karat with a purity of .9167 and no face value. It’s backed by the government of South Africa, and it’s the oldest circulating coin in modern history.
Last but not least, the American Gold Buffalo is the newest sovereign coin, manufactured in 2006 for the first time. Its purity is greater than the purity of the Eagle. It’s backed by the US government and has a face value of $50.
The bottom line
Any investment in the precious yellow metal is worth it.
If possible, invest in one-ounce denominations to avoid the high premiums on fractional coins!
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