When investing in gold coins, experts recommend that you limit your investment to North American gold coins that are easy to buy and sell. As mentioned, the 24-karat Canadian Maple Leaf, and the 22-karat American Eagle are highly in demand and widely used. In fact, you can even place Eagle coins into your individual retirement account (IRA).
Outside the US, other gold coins bought and sold include the Austrian Vienna Philharmonic and the South African Krugerrand gold coins. These are rarely traded in the US.
Gold bars are more expensive than coins. Typically traded in 10 oz. units, these are more difficult to buy and sell.
If you are a gold coin investor, it is to your advantage to keep your Canadian Maple Leafs or American Eagles in your home safe or in a bank’s safety deposit box. It is not recommended to keep your precious coins with a dealer. This is the best way to avoid scams by dealers.
Having said that, here are some tips to keep in mind when investing in gold coins:
- Compare prices among dealers. – You cannot buy American Eagle coins direct from the US Mint, except maybe for proof versions. But, you can find a dealer location tool at the official website of the US Mint. This offers an easy way for you to compare dealer prices. Coins are often sold at a premium on top of the spot price of gold or the delivery price. You can check out precious metal spot prices at exchanges such as Kitco.com and Monex.com.
When buying, you should go for the lowest price. Paying a premium of over 5% for gold bullion coins is not a good deal. Likewise, refrain from buying on eBay since you may get caught in a vicious bidding war if you do.
- Buy 1 oz. coins. – The American Eagle coins are available in 4 denominations: 1 oz., ½ oz., ¼ oz., and 1/10 oz. It is best to buy 1 oz. coins since the fractional coins bear a higher premium over the spot prices.
- Avoid buying rare coins. – Buying rare coins require expertise and diligence. For a non-expert, two coins may look exactly alike, though they are entirely of different grades. The difference may be worth thousands of dollars. Sure, you can hire a grading service professional, and receive a certificate of authenticity for your rare coin purchase. But, this is only unnecessary hassle for an ordinary investor.
- Determine the dealer’s buyback policies. – You should find out what the dealer charges to sell gold bullion coins. This varies among dealers, and there are dealers who don’t charge a premium. Thus, it is best that you uncover their policies.
There are lots of scams out there. For one, consider it a red flag if the dealer offers delayed delivery or free storage. It is likewise wise not to entertain telemarketers since the commissions they charge are much higher. Keep the tips provided in this post to avoid being a scam victim.