Gold Coin Investing

Gold Coin Investing

Krugerrand gold coing

Gold has been a precious metal since the beginning of civilization when it was used as a means of exchange. As human beings we always have to have a plan to cater for our expenses when we no longer have the ability to. Such a plan should include a retirement plan. Gold coin investing for retirement is a plan that will enable you to take care of the bills when you retire. As with any investment there are risks associated with gold investing.

Basically, there are three types of gold coins, minted coins, collectibles and coins issued by private companies. Minted coins are issued by the government of a country. They carry a high degree of authenticity. You can get the market value of gold by selling these coins. In many cases, you could get even much higher prices, especially if the minted coins are really old. For instance, if you own gold coins minted in fifties or sixties, you can earn much better price on those coins even more that its present face value.

On the other hand, coins issued by privately owned companies do not fare better. You can, at the most, get the market value of the gold if the coins are truly authentic. Then there are collectible or rare coins. Investing in these coins will fetch you much better returns than any other coins. You could get more than ten times the present face value of the coin, especially if the coin is rare. However, you run the risk of getting less than the market value of the gold coin in case the coin is no longer preferred by buyers.

Krugerrand gold coin prices

If you are investing in gold coins, there are risks associated with liquidation. The ease of liquidation is relatively low. It is also risky to keep gold in any form in the house. Theft or misplacement by the young ones may lead to huge losses. Depending on the company you invest with, there are risks associated with the storage of this valuable commodity. The level of risk depends on the storage facilities used. Some institutions will insure the gold while others will not therefore increasing the risk of investing. Make sure you choose the right custodian for your investment in gold coins.

Nationalization risk, risk of unfavorable movement in prices of gold and risk of under-utilization of the trading capacity of the gold by the custodians may also lead to lower than expected returns. There are other risks associated with specific types of gold coins. One great advantage of gold coin investing for retirement is that you will get several tax advantages. However, there is a major disadvantage when it comes to withdrawals before the attainment of the retirement age. It will attract huge penalties that may greatly reduce the amount you receive on withdrawal. There will also be huge tax charges upon such withdrawal. Therefore there is a risk of losing a huge part of the investment in cases of immature withdrawals.

Types of Gold Coins

  • Australian Kangaroo Gold Coin initially had different designs corresponding to different sizes. This changed in 1990 when the Kangaroo was officially imprinted on all the coins. This saw its name change from the initial Australian Nugget coin to its current name in 2008. This coin is an attraction to both investors and collectors. The latter do so for the different designs of the kangaroo imprinted on the coin. The coin is available in different sizes.
  • Austrian Philharmonic Gold Coin has a musical design depicting the rich heritage of Vienna with respect to music. Its beauty is evident with the different musical instruments. It has a level of purity of 99.99%.  The coin is readily available in four different sizes which also differ in popularity. This coin was developed in 1989 but has kept up with its peers in the coin sector.
  • Chinese Panda Gold Coins have a greater variety with different sizes in circulation. The uniqueness of this coin was enhanced by the different designs printed on the reverse of the coin. This design was changed each year and this increased the demand for the coin for both collectors and investors. The popularity of the coin is bound to increase with the planned growth of gold production of China. Currently China stands as the largest producer when it comes to gold. Therefore the expansion plans are a move in the right direction.
  • South African Krugerrand Gold Coin has a rich history, a fact has led to the retention of its demand long after the level of gold production by South Africa drastically reduced. It has a well-developed brand encompassing a springbuck on the rare of all coins. This brand is highly recognizable and was the only coin in circulation to have a uniform weight for quite a while. This fact has also helped it remain among the most common gold coins that are currently in circulation.
  •  Turkish Republic Gold Coin is one of the readily available coins in circulation that have a high liquidity level.  These coins are in high demand within Turkey and even from the Middle East. The demand is pushed by the significance of the coin which makes it a worthy gift in any celebration. The availability is enhanced by the presence of the Great Bazaar market where gold is sold in almost all the shops. The acceptance of the commodity as a means of exchange makes it have very low premiums on purchase. This is further enhanced by the lack of tax regimes for the gold coins due to its use as a form of money. The economy has opened up its use with banks even allowing accounts on gold coins and enhancing their use in transactions. Beyond the turkey boarders, the availability of the coin has been flopping. Its weight is also an issue when it comes to other investors. The coins available are classified into 1 Lira, half Lira, Quarter Lira, 5 Lira and 2.5 Lira. These coins are sold in decorative coins and the standard coins categories. The level of gold production in Turkey has been on the increase with the country reporting the highest gold production in the last ten years.
  • Canadian Maple Leaf Gold Coin boast of being the first in the attainment of the 99.9% level of purity. Its origin is associated with the recognition of the Krugerrands from South Africa. The level of circulation is high making it stand out as one of the gold coins that are very popular with investors. The level of purity was been improved to 99.99% and 99.999% in 1982 and 1998 respectively.
  • American Eagle Gold Coin available in 1/2 Oz, 1/10 Oz, 1/4 Oz and 1 Oz. the level of purity is ascertained at 91.7%. This is due to being mixed with different alloys that will enable it endure harsh treatment in the circulation process. The level of popularity and subsequent purchase even in areas outside United States of America is high. The country has the largest gold reserves in the world rivaled only by China but this is not documented.

There are numerous other types of gold coins. The American Buffalo coin, with a purity level of 99.9% is an example. This was first minted in 2006 and its purpose was to serve as an alternative to the Eagle coin. The British Sovereign, Mexican Libertad and the British Britannia are also valuable gold coins when it comes to investing. Their level of circulation may be significantly lower than that of the coins mentioned above but they are also a great investment.

When investing, you should ensure that you consider the market trends for the coin in question, its level of liquidity which is as a result of the circulation rate and the premiums you will pay. These premiums should correspond to the level of purity of the coin. If you have a large sum of money to invest in gold coins for retirement, it is wise to form a portfolio instead of purchasing just one type of coin. In addition, you ought to choose wisely the custodian for your coins with respect to the expertise of the employees, whether or not they own any storage facilities and any previous complaints from their clients.

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