By Doug Young

If you have made the decision to invest in gold the next step is to explore the different options that are available.

Investing in gold in its physical form is the safest and least risky way. I have explained why Here.

Many people, women in particular, would prefer to opt for gold jewellery. But a word of caution here – this does not constitute the most profitable way to invest in gold. The reason is that the cost of making and crafting the piece of jewellery is built into the price and this will not necessarily be recovered should you decide to sell it. Plus the price of and demand for a piece of gold jewellery is subjective. It is based on more than just the prevailing gold price.

The remaining option available is to buy gold bullion. This can be divided into two categories, gold bullion bars and gold bullion coins.

Of the two, my recommendation is that gold coins are better suited to the individual investor. Gold bullion bars vary in size but in the main are considerably bigger than gold coins and this makes them less liquid. It is more difficult to sell one bar or ingot worth say $25,000 than a number of gold coins making up the same value. That’s because the individual coins could be sold to a number of different buyers whereas the bar could only be sold to one.

The Benefits of Buying Gold Coins

So let me explain some of the benefits of choosing gold coins for your gold investments:

  • Gold coins have intrinsic value.
  • Gold coins are easily available and can be purchased in different denominations.
  • You can also choose them from the different weight options that match your budget.
  • You will always be in possession of physical gold which is both portable and easy to store.
  • Gold coins have maximum purity. Jewellery tends to be 18 carat or less but most gold coins are 24 carat pure.
  • Gold coins are known for their liquidity and have better liquidity than gold bars. Thus they can be traded or exchanged in any part of the world at the going rate.
  • Stocks that are related to gold can possess a risk factor, but gold coins are a safer bet as their value is determined by just one factor – the current gold price.
  • Gold coins are a valuable asset and can be kept for years to yield excellent returns.

Different Types of Gold Coins

Before buying gold coins, it is also important to know the various types that are available. The ones which most investors tend to buy are the standard bullion coins such as the American Gold Eagle or the South African Krugerrand. You can sell these at their base value relative to the current market rates of gold.

The other types are the rare collectible gold coins which are also known as numismatic coins. Examples of these are the British Sovereign and the Saint-Gaudens. These tend to be traded at a premium over and above the market rate of gold. Buying gold coins from this category is more expensive and you need to be experienced in buying them since there are a number of fraud or duplicate numismatic coins in existence.

Hence my view, which comes with considerable experience in the gold market, is that for a regular investor, buying standard gold coins is advisable and not so risky. My recommendation is that it’s safer to leave the rare coins to specialists or to those investors who have access to the opinions and advice of specialists.

Another thing I wish to make you aware of is that the regular weight of a gold coin is one troy ounce. There are coins available in the markets that weigh less than this however and these too are more risky investments. Unless you really know what you are doing you could end up buying these for the regular price then only being able to sell them later based on their actual weight.

Where To Buy Gold Coins

It is much easier to buy gold coins since the advent of the internet as this can be used both as a research tool to find gold dealers and as a vehicle for making your purchase.

You can use the internet to compare the rates of different sellers and then to do more in-depth research about the sellers themselves. It is important to check a seller out thoroughly before making a purchase from them.

I certainly recommend that you opt for an organization that has been in business for several years and which is accredited by a reputable trade organization such as the BBB (Better Business Bureau), as this means that they will have been independently vetted.

It is worth knowing that governments of many countries sell gold coins online and these are reliable sources too.

You could also consider online shopping sites and auction sites such as eBay.

My final tip is to make sure that the seller gives you a certificate of purity and weight for your gold coins. You will need this when you come to selling at a later stage. I recommend that you avoid any sellers who do not offer the necessary certification.

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Most financial experts agree that now is the time to be adding gold and other precious metals to your investment portfolio. You can do this by buying ETFs (Exchange Traded Funds), by buying stocks and shares in gold mining companies, by trading gold futures and by buying physical gold. The less risky option is to buy physical gold.

When buying physical gold you can choose between gold jewellery and gold bullion and if your aim is to maximize your return you should choose gold bullion.

When purchasing gold bullion you can choose between gold bars and gold coins. Gold coins are more practical for the individual investor as they are more liquid than bars, plus easier to store and carry around.

You can choose between standard gold bullion coins or rare numismatic gold bullion coins. The standard ones are less speculative, potentially less profitable but overall less risky.

Buying gold coins is much easier nowadays as you can take advantage of the internet to do your research and even to make your purchases.


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About the Author: Doug Young
Doug YoungDoug is a highly experienced professional and widely trusted authority in financial investing, commodity trading, and precious metals. With over 20 years of expertise, he helps others make informed decisions by sharing a combination of personal experience, extensive knowledge and meticulously researched information on gold IRAs, precious metals investing and retirement planning. He regularly writes news items on these topics. He has considerable experience of evaluating Gold IRA and Precious Metals Companies, gained over a period spanning more than a decade.

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