Saturday, September 16, 2006

How to Buy Gold Coins

The very first gold coins were struck in Lydia by King Croesus around 560 to 547 BC. Gold coins have been a favorite for exchange and legal tender since that time.

As well as legal tender gold coins are a great way for coin collectors and investors to accumulate gold in small gradual amounts. Gold coins are generally not subject to tax, being legal tender.

American Eagle Gold Bullion coins, for example, are an excellent investment and they are perfect for first-time gold buyers. Canadian Gold Maples as well as Krugerrands and many other gold coins also come in the same category.

The Krugerrand was the first bullion coin, in fact, to be marketed as an investment product and the first gold coin Americans were allowed to own, not because it was gold but because it was a legal tender coin which US citizens were allowed to own at the time of its introduction. Indeed it has been said that the origin of Krugerrands was prompted by this very fact. Of course US citizens are allowed to own gold these days and it is unlikely this will change in the future.

Today, however, investors can choose from a wide range of bullion and commemorative or numismatic coins issued by various governments throughout the world. All these coins, mint, proof and uncirculated included, are legal tender in their country of issue, although this would be for their face value rather than for their gold content. The face value is usually much less than the gold content but does conform to the legal requirement of being legal tender.

Gold bullion coins invariably range in size from 1/20 ounce through to the 1000 gram. The most common weights in troy ounces usually are 1/20, 1/10, 1/4, 1/2, and 1 ounce. The value of gold coins is determined by the value of their fine gold content as well as the condition and rarity of the coins, particularly the older coins. The dealers that sell the coins have their mark up or premium of course and this should be added to any value plus a premium or mark-up that varies between coins and dealers and this will be higher for the smaller denominations of course.

So whether you are buying for investment or just because you like collecting gold coins, buying gold coins are a lot of fun and can give great enjoyment for any coin enthusiast.

No comments: