Tremissis Justin I
Any investor in gold has a few options to consider. You might think of buying stock in a company that has a business model heavily dependent on gold. This type of stock will usually mirror the gold market in terms of growth or decline. However, if you want to invest in gold at the most basic level, one of the options is to buy gold coins. There are several reasons that make them a desirable investment.
Goldeagle
One reason some people prefer to invest in coins is that they are mostly dependent on the spot price of gold for their value. The spot price of gold is the price per ounce gold is selling for on the open market. This eliminates the management factor that comes with investing in a company that is closely associated with gold. A company can lose its value due to poor management, gold coins cannot.
Another primary reason coins are such a popular investment medium is that they are easy to obtain and easy to sell. In order to purchase coins, you can simply visit a jewelry store or specialty coin store. They usually have a variety of gold coins to choose from at various price points. You can buy a gold coin worth $50, or you can buy a coin worth $5,000. Likewise, you can also sell coins at a variety of price points.
A compelling reason to invest in gold coins is the low premium you can pay. A “premium” is an amount above the spot price per ounce of gold that you pay per ounce of gold. An example of this is if gold is selling at $1,000 and you pay $1,100 for a one-ounce piece of gold, you are paying a premium of $100.
Not all gold coins prefer the mentioned premium protection. In some cases, you could find yourself paying a very high premium. This is because some very rare coins have a scarcity value in addition to their per ounce value. Some of the best coins for investment are the Krugerrands. These gold coins do not carry a high premium and are available in numerous fractions of an ounce.