Gold has served as a store of wealth and medium of exchange for millennia and has the distinction of the ultimate safe haven investment. Investing in precious metals like gold gives you an effective way to diversify your portfolio. It also provides resilience against economic downturns, geopolitical uncertainty and inflation since gold is a classic hard currency. That’s why it’s so important to understand how to buy gold coins.
Buying gold coins remains one of the most popular and accessible ways to invest in gold. The physical ownership of gold also gives you the satisfaction of being in complete control of your investment, especially if you store your gold coins in a home safe. Keep reading to find out how to buy gold coins and the best places to make your purchase.
How to Buy Gold Coins
- Decide where to buy gold coins.
Make sure you buy your gold coins from reputable dealers that specialize in bullion and avoid dealers that specialize in collectable coins. Such dealers generally sell their coins for a considerable premium over the prevailing physical gold price due to the historical value and scarcity of the coins.
To buy gold coins, you have these viable options:
• Locally: Many cities across the U.S. and in other countries have coin shops that sell gold coins. If you source gold coins from a local coin shop, you may need to file paperwork if you buy more than $10,000 of coins.
• Banks: Some U.S. banks sell gold coins obtained directly from the U.S. Mint. Banks and other coin dealers that sell U.S. Minted gold coins can be found on the bullion dealer locator page of the United States Mint website.
• Online bullion dealers: Gold coins can be purchased online through online bullion dealers.
When selecting a gold coin retailer to buy through, several important factors should be taken into consideration:
• Reputation: The reputation of most major online gold coin dealers can be gleaned from comments about the company on social media and review sites like Trustpilot, as well as by the recognition and awards the company has received from reputable organizations. Be wary of gold dealers with numerous consumer complaints filed by their clients.
• Pricing: You can compare prices for the same gold coins among reputable dealers to get the best price.
• Delivery: If you plan on purchasing in bulk, coin dealers that offer a flat rate for shipping would present an economical option. Also, coin dealers often won’t deliver gold until all funds have been received, so that can increase the time for delivery.
• Customer support: This can make a big difference if you need to clarify details before or after you’ve placed your order. A professional coin dealer that offers order tracking, a toll-free telephone number and/or a live chat option on their website instills greater confidence in a transaction’s success.
- Register with the gold retailer.
Bank requirements differ from bank to bank. While some banks may allow you to purchase coins for cash if they have them on hand, you may need to open some type of account with the bank to purchase gold coins. You should call the bank first and ask them about the specifics of buying and receiving gold coins.
Buying gold coins from a reputable online bullion dealer is much like any other online purchase, you select the coin or coins you wish to buy, put them in your cart, select your payment method, enter your particulars to receive the shipment, pay for your order online and check out.
- Select the gold alloy type.
After selecting a reputable source for buying gold coins, you’ll want to choose the type of gold coin that best suits your budget. The highest quality gold coins are 0.999 pure gold, which means that 999 parts out of 1,000 are pure with 1/1000 being impurities.
Alloys consist of a mixture of metals that either reduce the cost of gold or improve its performance for a particular use. Gold is often alloyed with other metals to increase its strength and malleability.
Gold’s purity is generally expressed in karats (K), with 24K being pure gold, 22K containing 91.67% gold, 18K consisting of 75% gold, 14K containing 58.3% gold and 9K having just 37.5% gold.
Most gold coins sold for bullion have been minted since 1800 and have a purity of no less than 0.9. Recently minted coins from world mints generally consist of 0.999 pure gold, so unless you’re buying older coins minted before 1800, you get almost pure gold in government minted coins.
- Pay for your gold.
If you buy gold coins from an online bullion dealer, you will generally need to pay via credit/debit card, PayPal, bank wire or eCheck, although some dealers now also accept select cryptocurrencies as payment. If you buy gold coins through a local coin shop or through a bank, then you can pay with cash or a credit or debit card.
- Trade your gold.
Trading gold coins can involve shipping, receiving and physically transporting valuable coins, which makes the process significantly more cumbersome than trading gold online on the spot market. You also run the risk of theft of physical gold.
Many online gold coin dealers buy and sell coins. They generally pay close to the market price for the particular gold coin you may want to sell. To sell your gold coins to an online gold bullion vendor, you can ship them through an insured delivery service with tracking and tracing capabilities. If you live in or near a large metropolitan area, you can often sell your gold coins to a local bullion dealer in person.
Other options for selling gold coins include coin and bullion shows, pawn shops and local coin shops. The added costs of shipping and the delay in receiving orders make actively trading coins counterproductive. Buying gold coins makes more sense as a long term investment and store of wealth.
Importance of Gold Size
The weight of a gold coin or bar is usually expressed in troy ounces where 1 troy ounce is 31.1 grams, which is considerably heavier than the traditional ounce of only 28.35 grams. You can generally buy gold coins in 1 troy ounce, ½ ounce, ¼ ounce and 1/10 ounce sizes.
At the current prevailing gold market price of $1,700 per troy ounce, the gold in a 1 ounce coin would be worth roughly $1,700. The gold in a 1/10 ounce coin would be worth $170.
If you plan on selling a portion of your gold investment at any given time, then you might want to buy more of the lower denomination coins instead of the larger 1 ounce size. If you plan on holding your investment for a long period of time, then you might prefer buying larger denomination coins.
If you really want to impress your friends, the Australian Mint issued a solid gold coin weighing 1,012 kilograms in 2012. The melt value of that “One Tonne Gold Kangaroo” at today’s gold prices exceeds $55,700,000.
Gold Authentication and Certification
Since South Africa began minting the 1 ounce Krugerand in 1967, gold bullion coins issued by the world’s government mints have standard highly recognizable features, including the purity of the gold. Most countries stick to one design for coins, while some countries like China vary coin designs.
Standard government minted gold coins generally come with a mint certification when distributed by authorized coin dealers. The numismatic certification of collectable coins identifies the value of a gold coin based on its legitimacy, rarity and condition. The 2 major coin certification companies are the Numismatic Guaranty Corp. (NGC) and the Professional Coin Grading Service (PCGS).
Where to Buy Gold Online
Finding the right broker to make your gold coin purchases through doesn’t have to be difficult. Check out our picks for the best gold coin brokers.
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Is it a Good Time to Buy Gold Coins?
Purchasing coins through a reputable online dealer offers certain advantages. Because they operate without a brick and mortar storefront, online dealers can usually offer more competitive prices than a local coin shop.
In addition to a broader selection of coins to choose from compared to coin shops, most reputable online dealers offer considerable privacy for gold transactions. Buying from a local coin shop would not be as private if you are physically present to make your purchase.
With respect to whether it makes sense to buy gold now, that will depend on your market view. The economic impact of the COVID-19 pandemic has fueled a recent rally in precious metals. If you have yet to diversify your portfolio into precious metals or just want a safe haven for your wealth, then investing in gold coins is definitely worth considering.
Frequently Asked Questions
Can you legally own gold bars?
Yes. As of January 1, 1975, gold in any form can be owned in the U.S. without any restrictions. Gold was illegal to own in the form of bullion between 1933 and 1975 without a special license.
Is there sales tax on gold?
If you live in the United States, then sales tax may be collected on your gold purchase depending on the state you live in. Call your bullion dealer or bank to find out whether you would need to pay sales tax on your gold purchase.
Will the price of gold go up?
Gold is an investment just like any other, and there is no guarantee about whether the price of gold will go up or down. But gold has stood the test of time and continued to hold its value.
*Requires purchase of precious metals. Free metals represent actual metals up to 1% of the purchase price of non-bullion products. Call for details. Subject to change at any time.