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Are Gold Coins a Good Investment?

Are Gold Coins a Good Investment?

For many people investing in gold for the first time, a natural question to ask is “are gold coins a good investment?” There are a number of pros and cons of investing in gold and many of these are echoed across both the gold bar and gold coin marketplaces.

The benefits of gold coins

Gold coins are a superb way of dipping your toe in to the gold market and their usually lower weight per coin increases the opportunity for liquidity.

Whilst this may be a limited concern most of the time for those with large holdings who are looking for security and the likely increase in price of the asset class, for people who require more liquidity, or are looking to use their holding in a similar manner to a high-interest bond, then having the ability to “dip in” to the funding stream without selling larger amounts of the asset might make holding gold coins the way forward.

Gold as an object and commodity

It's also worth remembering that one reason that gold is popular, particularly amongst more skeptical investors, is that it is likely to retain its value even during times of fiscal problems, either globally or within your country of residence.

Holding gold in coins is useful in such situations. This is due to two reasons:

Firstly gold in coin form is likely to have a lower weight (and therefore value) than bars. A good analogy for this would be attempting to use a £50 note in a corner shop. The larger value will be difficult to use for smaller purchases.

Of course, there is always a price to pay for this convenience, and this is usually the source of questions such as “are gold coins a good investment?”

You rarely pay the raw gold price for any gold item. Even large gold bars include a fee for processing and manufacturing the gold into a bar shape.  This is reflected in the retail price of gold.

It is worth considering that the smaller coins, as well as being more elaborately designed are also in effect manufactured separately. This means that the retail price of coins is usually higher.

So, to answer the original question, gold coins are definitely a part of your gold buying strategy, as they offer flexibility to your use of gold. However long-term holder of high-value deposits may be better off considering bullion.

If you are looking for further advice on the types of gold available, why not call the team at The Gold Bullion Company on 01902 623 259.