Saturday, April 29, 2006

Gold Plated Coins

There are many gold plated coins available to collect, some from Mints such as the Perth Mint and Royal Australian Mint, the British Royal Mint and other lesser known mints.

To a purist collector of gold coins, gold plated coins might seem a cheaper alternative but in fact some of the gold plated coins are very nice and do attract much interest around the world.

Gold Plated coins can be expensive still as the same care and attention is given to their manufacture as sold gold. Gold plated coins are usually struck in silver and have a 24 carat plating although other cheaper metals may be used. The mints generally, though, produce excellent quality coins with precious metals as the base.

A good example is the Gold-Plated Silver Coin Pendant produced by the Perth Mint, Australia. This is 24 carat gold plated 99.9 percent pure silver. As you can see by the picture there are three free moving garnet stones also captured in a recess in the center of the coin. The obverse bears the Raphael Maklouf effigy of Her Majesty Queen Elizabeth II. There are 12 of these, each representing a different sign of the Zodiac

This is almost like gold jewelry but is actually classified as a coin and is issued as legal tender under the authority of the Government of the Cook Islands.

When buying gold plated coins always ensure that you purchase from a mint or reputable dealer. Check the construction of the coin. What is the base metal used? What carat is the gold plating? If the base metal is silver, how much and what quality is it?

The coin should really be proof, as it is not a coin meant for circulation, and come sealed in it’s own transparent container. The coin should never ever be taken out of its sealed container either. Handling the coin can cause irreparable damage to the surface, even with the most delicate of touches. There should be a certificate of authenticity that describes the coin and has a number on it to indicate which coin of the series or mintage it is.

Gold plated coins can be fun to collect and can even improve in value over the years.

Wednesday, April 12, 2006

Gold and Silver Coin Prices

Gold and silver coin prices will gradually increase as the value of gold and silver increases. This has been noted already over the past few months and, provided the increases continue, then the value of gold and silver coin collections will increase in value also.

Gold and Silver Coin Sets are a good way to increase your gold and silver coin prices. Coins that form sets tend to be worth more than individual coins. If you have one Chinese panda coin it has a specific value. But if you have a set of Chinese Panda coins such as China 2005 Panda 5-coin gold Premier Set, for example, then each coin would be worth proportionately more by virtue of being in a set.

The China 2005 Panda 5-coin gold Premier Set is issued in five denominations from one twentieth of an ounce through to one ounce and there were only 2000 sets of these coins issued.

Other sets of gold and silver coins have been issued in the US, UK and Canada among other countries and these, although the price tends to be high, are an excellent value for coin collectors.

Collecting the same coin but different issues each year is another way of improving one's coin collection.

Canadian Maples and the Australian Lunar Series come to mind as typical examples. A new coin is issued each year and some collectors studiously collect each coin and add it to their collection. This provides a steady improvement in the value of the entire set and, with the steady increase in the value of gold and silver, the value of the set takes on a new meaning.

With the time, effort and expense of building up such a set some collectors rarely sell their coin sets and this tends to add to the value also. many collectors have several sets of different coins.

As it looks quite likely that gold and silver coin prices are going to continue their gradual rise in value, it would probably pay to hang on to any sets of coins one has and perhaps even enhance their value with additional coins where one can!

Tuesday, April 11, 2006

How Much is Gold

How much is gold theses days?

In fact the value of gold actually does not change much. What does change is the amount of money needed to buy gold.

Apart from some isolated peaks, gold’s purchasing power has not essentially changed very much over the past 200 years.

What has changed however, is the value of the dollar. This has steadily decreased over the years and with an accelerated inflation since the US government ceased using gold to back the currency and just started printing money to handle shortfalls and boost the economy.

In fact if they were to return to a gold backed currency then it would take over 52 thousand dollars to buy one ounce of gold, since the printed paper we call the dollar has decreased in value so much.

So the question is not so much, how much is gold, but more, what is the value of gold these days?

An ounce of pure gold will purchase pretty much what it purchased twenty years ago, or one hundred years ago or even two hundred years ago. In times of economic crisis or inflation and depression (sorry, now called recession) gold always stands out as a stable value so that, even when you might need wheel barrows of dollars to buy a loaf of bread, a tiny gold coin would be enough for you to buy a wheel barrow full of bread.

So when you ask how much is gold you are really asking what can I buy for this gold and the answer is, just as much as you ever could.

Monday, April 10, 2006

How Much are Gold Coins

How much are gold coins is a question that is asked everyday as the value of gold moves fluctuates.

When you buy gold coins you also pay for the dealers mark up or premium as well as shipping and sometimes insurance costs. Because of this additional cost it can take a while before you recoup the value of what you have spent.

But gold has been rising and has jumped from around 250 US dollars per ounce five years ago to over 600 USD an ounce. If you bought a one ounce gold coin 2 years ago you would have paid the value of one ounce of gold plus some extra to the dealer, maybe an additional 20 percent as well as shipping, another 5-10 dollars maybe. However, since gold has risen so dramatically, you will have doubled the value of your gold coin to cover the dealer's profit and the shipping and made a profit yourself, if you were to sell of course.

According to the U.S. Geological Survey, "Of the 193,000 metric tons of gold discovered to date, 62% is found in just four countries on earth. All the gold discovered thus far would fit in a cube 22 meters on a side." 20 to 30 percent of this is held in bank vaults and the balance, 70 to 80 percent, is mostly held privately in the form of jewelry, coins and bullion.

Gold coins are a significant part of the total gold in the world.

It is quite likely that gold will continue to rise and that, even though buying gold coins now while gold seems 'high' may not look like a good idea, gold is something that has traditionally held its purchasing value for over 200 years. It seems it is fiat currency (the dollar) that is losing its purchasing value. It makes sense therefore to keep and even add to one's own gold ‘reserves’ in the long term.

'How much are gold coins?' becomes not such an important question then as 'How much gold can I own?'

Saturday, April 08, 2006

Gold vs. Silver

Sometimes, when it comes to what to buy, it is a case of gold vs. silver. Both are equally a good investment but which one could you call the best?

There are two prime factors that will influence whether to buy gold or silver. They are affordability and taste.

For some people it is gold all the way. Even if they cannot afford the one ounce gold coins or gold bars there are smaller coins such as the one tenth gold coins, which are more affordable. Unfortunately they also command a higher price in proportion as the mint's or dealer's mark up has to be added, plus expenses, shipping etc. Usually, the smaller the coin, the higher the additional costs are in relation to it.

The cost of the gold if you are buying 5 ounces or a kilo of gold coins or bars is much less than if you buy a one tenth ounce gold bullion bar.

Economically for some people, silver is the way to go. An ounce of silver is affordable for just about anyone. Silver is currently running at around 12 USD per ounce. A big difference to gold at 550 to 600 USD an ounce. It is possible to buy one kilo silver coins as well as one or two ounce coins. If you are buying silver purely for the silver sake and not interested in it from a coin collector's point of view, then junk silver or bags of old silver coins may be the way to go. Keep in mind that there is usually a higher margin above spot price for buying silver from a mint than for buying gold.

The other option is to strike a balance and buy both gold and silver. Perhaps buy some gold coins to keep for the long term maybe more infrequently and, on a more regular basis, buy silver coins. This can be a happy medium. If the need ever comes to sell but you do not want to sell your gold you can always sell small amounts of silver to tide you over and still retain your most valuable asset.

So when it comes to gold vs. silver, there really is no contest. Each have their place and each have their advantages.

Sell Gold Bullion

Sometimes it can be necessary to sell some gold bullion.

This might be in a financial situation perhaps where funds are quickly needed, or to recoup an investment where the value of the gold bullion has increased sufficiently enough to warrant the sale.

Gold bullion can be in coins or bars. Coins would usually be gold coins such as South African Gold Krugerrands or Canadian Gold Maples or even US Gold Eagles, for example. Bars would be one ounce pure gold bars or perhaps smaller such as half ounce, or one tenth ounce. This sort of bullion is easy to buy, easy to store and transport and quite easy to sell.

How to sell Gold Bullion

All one needs to do is locate a gold or coin dealer in the country in which you are situated and sell the bullion.

You do need to ensure that you get a respectful price for the gold.

Firstly you need to find out the current price of gold (spot gold price) on the open market. You can see charts at the top of this web site that show the current value of gold in US dollars and Euros, the most common ways of displaying the value of gold. These are updated every few minutes so you can get the current price of gold bullion at any time.

You also need to find a reputable dealer who will give you close to the full value of gold. It is unlikely that any dealer will give you the full current market value of gold as they also wish to make something on the deal. They have their expenses and have to resell the gold bullion themselves.

Sometimes you can sell gold bullion online at auction such as eBay for example. This is fine provided you are prepared to take the risk of actually getting less than a satisfactory price for your gold if few people bid for it. It is likely, however, that many will bid as gold always seems to be much in demand. You can always place a reserve on the item to ensure that it does not sell for less than it should.

Selling your gold bullion is probably easier than buying it. If you do not need to sell it I would recommend you keep it. But if the situation warrants it then, yes, sell gold bullion and take your money!

Friday, April 07, 2006

Where To Buy Gold Coins

Where to buy gold coins is a very important question.

There are literally thousands of dealers, auctions, private sellers, coin clubs and others all keen to sell you their gold coins. Most of them are genuine and bona fide.

Most people buy from dealers, mints or from auctions, eBay being easily the most popular.

When buying gold coins it is wise to keep the following in mind.

Ensure you buy from a reputable dealer. Ask questions such as 'How long has the dealer been in business?', 'What is their fixed address?', 'Do they take credit card?', 'Will they accept a return if the coin is not as described?' and 'What are their terms and conditions?'. Questions like that.

If buying from an auction you need to ensure the auction seller is bona fide. On eBay you can establish this by checking the feedback of the seller. Is the seller a power seller or at least someone who has a history of selling? If so, they are likely to be keen on repeat business and so will offer good service. Check their feedback rating including the percentage of positive to negative and read what other buyers had to say about their service. Anyone with a feedback percentage of 90% or less one should be wary of.

Other auctions may have similar systems to ensure that the seller is bona fide, such as seller registration requiring sellers to show some credentials to demonstrate who they are. If you are a serious buyer of rare gold coins then auction houses such as Sotherbys is a good start. One can get the nearest from the yellow pages and ring to see if there are any auctions pending with gold coins being offered.

Sometimes you might buy from a private individual. Here it is a matter of faith and trust. Do you know the person? Often friends and relations can be good because, at least, you know who they are. Perhaps you might like to work through an escrow company? Here the escrow company accepts the funds from you the buyer and the goods from the seller or some variation of that and ensures that all parties are satisfied before completing the exchange. They usually charge a fee for this service. Don't pick an escrow company the seller suggests. It might be their own!

Mostly, when you are buying gold coins it is a matter of due diligence and common sense to ensure that you know your buyer and even, for the buyer, to know the seller.

Where to buy gold coins then becomes a matter of being able to select the best price for the coins you want.

Thursday, April 06, 2006

Gold Price

The gold price continues to be in the news a lot due to the steady rise of the value of gold as measured against the dollar.

But what does the gold price mean?

The value of gold actually does not change much. What does change is the amount of paper or electronic money needed to purchase an amount of gold, most universally measured as US Dollars (USD) per Ounce.

The gold price is also measured in 'price per kilogram' and 'price per gram'. For example the jewelry industry usually is concerned with the price of gold in grams whereas investors usually watch the price per ounce.

For over one hundred years from 1800 through to 1970, the cost of gold remained fairly stable with a very gradual rise from 19 US dollars an ounce to 38 US dollars an ounce.

Then in 1975 there is recorded a jump to 175 US dollars per ounce! This is a massive jump in just a few years. Not only that but in 1980 there was an even more massive jump to 641 US dollars an ounce.

In 1985, however, it plummeted by almost half and was steady in the 270 to 425 range until recently when it started it's march upward again.

However, whereas in the 1980s there was a dramatic rise, this time, so far, it appears more steady.

What does the rise in the gold price mean? Does this mean that there is less faith in the US dollar? Or is it just that people prefer to own something more solid than paper currency?

It was pointed out recently that if the US reverted back to a gold backed currency then, with the vast quantity of paper money (dollars) currently printed and in circulation, then it would take $52,000 USD to purchase one ounce of gold.

That gives new meaning to the word inflation!

It seems evident that the gold price demonstrates people's confidence in gold much more than in the dollar and, for gold owners, that can only be a good thing.

It is likely that in these economic and troubling times people will seek something that remains stable. And gold has a tradition of being stable come what may and, what ever the gold price, people will certainly be willing to pay it.

Tuesday, April 04, 2006

New Gold Coins

As well as existing gold coins there are also the regular issues of new gold coins. Various mints such as the US Mint, the Royal Canadian Mint, The British Mint and many others issue BU (Brilliant Uncirculated), proof and commemorative coins yearly.

Canadian Maple Leaf gold coins from Canada, Britannia gold coins from the UK, US Gold eagles, South African Krugerrands. Pandas from China and Kangaroos from Australia. All are produced on a regular basis.

One can buy single coins but, if you can afford it, it is better to buy about 5 ounces at a time in gold coins as the mark up, handling and shipping charges by the dealer is going to be a lot less. Sets and presentations of gold coins are a good buy also.

If possible find coins that have a limited mintage as these will increase in value over the years since there are only a limited number made.

When buying gold coins always ensure that you deal with a reputable dealer and ensure the coins are what were described, when you receive them, especially when it comes to the condition. If you buy proof coins they should be proof and not BU. If you buy BU they should be BU and not simply uncirculated.

Check that the coins are properly sealed and have not been opened and resealed again. They should be sealed in a plastic transparent container especially for proof coins. Proof coins usually come in a presentation case or box. That presentation case should be the original, not a later made up one. You can check this by going to the mint and checking how the coin was originally sold.

Some mints will sell coins direct to the public and this is a good guarantee that you are getting what you asked for.

Buying new gold coins can be fun as well as a good investment for the future so it pays to ensure that you are getting what you paid for.

Old Gold Coins

Long before the Krugerrand was issued there were not very many old gold coins with real pure gold.

A typical example of those that were is the Austrian 100 Coronas. This was a large gold coin produced between 1908 and 1914 and later reissued in 1916 as commemorative coins.

The obverse features the head of Emperor Franz Joseph I and the reverse The arms of Austria superimposed upon a crowned double-headed Imperial eagle.

Technical Specifications include:

Diameter 35 mms
Weight 33.8753 Grams
Fineness .900/1.000
Gold Content 30.4878 Grams
Gold Content. 9803 Troy Ounces

These coins can usually be obtained for around 330 to 340 US dollars each, at time of writing, so they are actually quite a bargain. You need to check the price at the time of purchase as it may fluctuate with the price of gold.

There is also an Austrian 20 Corona gold coin which basically contains only 6.0976 grams of gold but is still a good collectors item never the less. This has the same obverse and reverse and were also restruck as commemorative pieces. The price for these run at anywhere from 90 to 125 dollars US depending on issue, number ordered and condition.

There are many other Austrian gold coins such as the franc and florins and it is a good idea, if you are interested in collecting these, to scout around and see what can be found.

Most of these coins had a limited mintage also so they are collectors items and it is quite likely that the value of old gold coins will increase in time for their collection value and not just for the gold content.

Saturday, April 01, 2006

Gold Future

What will be in the gold future we are often asked.

Of course no one knows the future and there are many factors that affect the value or price of gold. But if one judges by the current activity of gold over this past year or so, it looks like the value of gold is going to just continue to rise.

How does that affect the gold coin collector?

Basically it is good news. It means that the gold coins that the collector studiously accumulates only improve in value over the years. Actually it is probably not so much the value of gold increasing as the value of the dollar declining against the value of gold.

A recent article pointed out that there have been so many dollars printed up that for the US to return to the gold standard would mean that every ounce of gold would cost over 52 thousand printed dollars. This means that whereas 100 years ago it only took 20 dollars to buy an ounce of gold. A few years ago 280 dollar bought an ounce, these days it will take 550 to 590 currently to buy an ounce of gold and, if the gold standard was reintroduced, then it would take 52 thousand dollars to buy an ounce of gold. Gold has certainly not changed. But the dollar has!

This demonstrates that the dollar has seriously deteriorated since the gold standard was dropped but that the value of gold continues to remain high.

It is most likely, in my opinion, that gold will continue to improve in value against the dollar provided that more dollars are printed than are needed just to manipulate the economy, and that those people who collect and hold real gold will have a distinct advantage over those who hold dollars only.

This applies to gold coins, gold bars, biscuits, jewellery and any other form of real gold one has.

Even if one paid top dollar for a proof gold coin 2 or 3 years ago the value of that coin will now be over the total cost of purchase and there is no sign that this will decrease.

What about collecting coins and bars in the future? Well with the likelihood of a continual rise in gold (more properly expressed by, "it takes more dollars to buy an ounce than it did before", then the sooner one buys gold the better off one will be.

So the gold future looks bright and there is good sense in continuing to buy as much gold as one can get one's hands on!

Gold Value

We can see that the gold value continues to rise against the dollar but what does that really mean?

An interesting article by Martin Presler shows the true value of gold pointing out that, at the best, if the US reverted to a gold backed dollar then it would be $52,237.96 dollars for a gold backed dollar.

How did he arrive at that extraordinary conclusion you might wonder? Well it is simple enough.

The term for all money in the US is M3. This would include all the currency in circulation, held in various bank accounts, funds, money market funds, deposits, Eurodollar deposits held at all banks and any other loose change. All would make up the M3. However this does leave out the millions of dollars held by foreign banks and euros, or other currencies, held by non US Residents and so forth.

The total of all this money, as at the week ending Feb 13th 2006, adds up to the princely sum of 10,236.3 billion dollars. As he says,

"10,236.3 Billion dollars rolls right off the tongue but it really is... $10,236,300,000,000!"

Now the US government hold a substantial amount of gold in it's vaults. The government claims it is 800 tonnes. Martin Presler claims it is probably closer to 400 tonnes but says lets split the difference and call it 600 tonnes.

He then divides 6000 tonnes of gold by the amount of money, giving 1,706,050,000 dollars per tonne.

With 2240 pounds in a tonne that amounts to 761,629,46 dollars per pound and as there are 14.58 troy ounces of gold in each pound that makes 52,237.96 dollars per ounce of gold!

So, just look at that. If the dollar was 100 percent backed by gold, then gold would have to be 52,237.96 dollars per ounce.

Just how much paper money is out there?

You can look at this two ways. Either gold is worth a lot more than we ever imagined or the paper money we use is worth less than a matchstick on a hot day.

Which ever way you look at it, the value of gold looks set to continue it's rise and it seems fairly safe to buy gold bullion in pretty much any form.