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Buy Gold Bullion Coins – But Which Ones?

Wednesday, June 20, 2018

If you pay attention to our blog regularly, you’ll probably hear us waxing lyrical at some length about the many benefits when you buy gold bullion coins. And rightfully so - many people in investment communities consider gold a reliable hedge against inflation and economic uncertainty. That being said, there’s a whole load of reasons why people choose to buy gold bullion coins – and it’s not always immediately clear where to buy gold or which coins are best for your interests and requirements.

So here are a few ideas to get you started.

Coin collectors

If you’ve got no interest in gold’s investment potential whatsoever, and you just want to build a gold coin collection you can admire – then the changing fortunes of the gold price probably aren’t going to affect you all that much other than to help you determine when is the best time to buy gold. So really, you should just buy whatever gold coins you want within your budget.

That being said, there’s a whole bunch of different gold coins out there, so it is worth narrowing things down a bit. If you’re interested in the evolution of our currency, you might want to look at historical gold coins and focus on what’s on offer here rather than among the more recent commemorative releases.

If you’re interested in celebrating aspects of British culture, like the Royal Family for instance, then more recent variants like the Queen’s Beast series of commemorative gold coins could be exactly what you’re looking for.

The Queen’s Beast series are actually one range of coins that we’ve seen huge levels of demand for. The original first sales of the older releases from this commemorative range are already gone and demand has started to push the price up. Will we see the same thing play out with the most recent release, the Black Bull of Clarence? Watch this space.

Investors

What if you’re just not that interested in the historic or commemorative value of a gold coin and, truth be told, you just want to make returns on your investment?

Many people will think that historical coinage is the best way to do this – we often hear stories about old coins that used to be next to worthless being cashed in for a profit many years later. But in actual fact, this is quite a rare occurrence.

Sure, some historical coins rise significantly in value – but that’s generally more due to scarcity and somewhat unpredictable demand rather than their age. But it takes decades for a historical premium to rise enough to justify the initial purchase, and the added factor of rarity is highly unpredictable.

You can buy a gold coin and sit on it with the hope that you’ll be holding one of the few remaining coins of that series in 50 years’ time and suddenly collectors everywhere will be desperate to get their hands on your coin. But it’s something of a hit or miss strategy.

Here’s an alternative that’s more likely to offer reliable returns on your investment. Look for a gold coin with the smallest possible premiums over the gold spot price.

By buying gold coins for the direct value of their gold content, measured by the live gold price, you’ll be looking at a more sensible and reliable investment strategy. To coin a phrase - a gold coin will always be worth its weight in gold, while its historical and rarity values are far less dependable and quantifiable.

Gold coin investors will do well to look to world-renowned gold coins like the gold Britannia, or gold Sovereign (the value and purity of which can never be in doubt). In fact, the secondary gold market, where premiums are smallest, could well be the right purchase for you to get hold of gold coins at a great price.

A bit of both

Let’s be honest, most people buy gold coins for a bit of both: the thrill of holding a piece of history and the financial reassurance that only solid gold can bring. Perhaps you’re a collector with an interest in coins for their historical and commemorative value, but chances are you’d be pretty happy to see your collection fetch a nice addition to your pension in 30 years or so.

If you’re a particular history buff, then old gold coins will certainly have their appeal to complete your collections. But generally, building up a recent collection of gold coins, be it the Queen’s Beast coin series, or commemorative gold Sovereigns, will be an easier way of combining the benefits of both styles of gold coin ownership.

Best UK gold companies

If you’re looking to buy bullion by post, whether it’s gold coins or gold bars, there are certainly a wide range of places you can look. For the best price for your gold, however, you’re going to want to find a company that charges the lowest premiums above the spot gold price.

Luckily, the prices on the Gold Bullion Company website, whether for gold bars or gold coins, are automatically updated based on the gold price. So whether you’re building up a Victorian gold Sovereign collection, or planning a retirement fund – you’ll know where to go next time you want to buy gold coins.