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Why Buy Gold Coins?

For many people looking to invest in the gold market, gold bullion bars are considered the go-to destination. But did you know that commemorative and bullion gold coins produced by the likes of The Royal Mint, The US Mint, and The South African Rand Refinery can also be a smart investment?

There are many reasons why investors and coin collectors decide to buy gold coins rather than – or in addition to – gold bars. To help you make your mind up on which is the best for you, we’ve bought together a few of the main reasons why it’s worth buying gold coins, and which the best ones to go for are.

Gold coins vs gold bars

The benefit of gold bars is that their contemporary value can be fairly easily quantified by the live spot price. While most gold merchants charge a small premium over the spot prices, you can be sure that, with reputable dealers at least, the value of bars will be closely related to the price that gold is being bought and sold at all over the world.

Gold coins are a little different to this. They’re valuable both because of their inherent gold content, and because many are collectors’ items. Items such as the British Gold Sovereign are valuable because they are minted each year by the official proprietor of the British currency – the Royal Mint, and have been so for many years. In the case of the Sovereign, the first examples of its minting can be traced back to the early 1800s, with earlier versions even dating from the 1500s. 

A coin’s status in a continuous annual series adds to its historical and traditional value, meaning that over time, its price often grows far in advance of its raw gold content. This is particularly the case when selling to coin collectors who are looking to complete a collection or get hold of a certain meaningful year.

Take this historic Victorian Gold Sovereign, for instance, which commands a premium of about 35 per cent above the contemporary trading price of its 7.98 grams of 22 carat gold. While the chances of you wanting to wait 150 years for your coin to appreciate in value are slim, it’s clear that these coins have vast potential to offer returns above and beyond those of the gold price increase.

So why do people buy gold coins?

There are of course many other reasons why people decide to buy gold coins rather than gold bars. While gold bars are convenient and practical, they can’t rival coins for beauty and interest. For many people it’s about an interest in holding something for more than its simple value as an investment commodity.

Gold bullion bars simply cannot rival the pleasure of holding a piece of history in your hands. Even contemporary gold coins come with the knowledge that they will be viewed as a valuable piece of history in times to come. This value increases with each coin you buy – holding a complete set of gold Sovereigns or Krugerrands dating back however far, is going to feel a lot more special than simply having a quantity of gold bars decorating the mantelpiece.

For this reason, the decision of whether to buy gold bars or gold coins is down largely to your tastes rather than the inherent benefits of either option. Investors who choose gold bars are often less interested in the commemorative or historical value of gold coins, and want a simple investment strategy that they can easily quantify.

Which are the best gold coins to buy?

If the value of gold coins does appeal to you, then your next decision is to look at which are the best options for your investment. For both commemorative and economic value, the best coins are the ones with international recognition. After all, it’s not much use trying to talk about the amazing historical value of something that nobody’s ever heard of.

These widely recognised coins usually take the form of gold bullion coins, minted by the national mint of a country. These coins come with an internationally-renowned seal of approval, and should be easy to differentiate from fake versions. They have the added benefit of being considered ‘legal tender’ in their respective currencies, further strengthening the authority and recognition of these coins.

British Gold Sovereigns

The Gold Sovereign is one of the most popular gold coins that we sell. It has been minted to current specifications since 1816. It is one of the smallest, making it a popular option for first time investors who don’t want to spend a large amount of money on a new investment strategy.

The South African Gold Krugerrand

The Krugerrand is released annually by the South African Rand Refinery, and is one of the most widely-traded gold coins in the world. It was one of the first gold bullion coins to be released by a national mint and feature a troy ounce of 24-carat fine gold.

American Gold Eagle

Much like the British Sovereign, the American Gold Eagle is based on an earlier circulated gold coin – the Eagle, though it is no longer minted to the same specifications. It consists of 33.93 g of 22-carat, (916.7 parts in a thousand) gold which equates to a full Troy Ounce (31.1 g) of fine (999.9 parts in a thousand) gold, and is the flagship annual bullion product of the United States Mint.

Where is the best place to buy gold coins?

There are many different gold merchants out there, from local dealers, to online dealers, and buying directly from the mints themselves is an option too. Each of these will command competing premiums over the gold price so the challenge for an investor is to find the merchant that most closely tracks the gold price itself.

Online merchants such as The Gold Bullion Company offer some of the most competitive prices available, as our prices are automatically updated every day in line with the market price of gold.  

Start your gold coin collection today.