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Buying Gold Coins: Is It Still a Good Investment?

Are gold coins a good investmemt and how do I buy gold coins?
Are gold coins a good investment? Read on below to find out if buying gold coins are a good option for investing.

Are you thinking about buying gold coins as an investment? You’re not alone. Many people view gold as a safe haven asset that can protect them from inflation and economic recession. But in today’s financial climate are gold coins a good investment?

Stick around as we tackle this question and let you know what my opinion is regarding investing in gold coins.

And as you know my primary investment and income generating method is day trading. So, if you are interested in learning more about day trading then having a solid foundation first in the fundamentals of day trading principles and market movements is the most important step to take.

And from there you will be in the best position to develop into a consistent and profitable trader over time. But it all starts with knowledge and practice!

But back to the main question we are looking at in this article, ‘Are gold coins a good investment?’.

Gold coins have been around for centuries and remain a popular investment choice today.

While the stock market is bouncing back and forth, gold prices remain steady. So is buying gold coins still a good investment? Let’s take a closer look at this question.

Related Read: How Much Does a Brick of Gold Cost?

What are Gold Coins?

Gold coins have been around for centuries and remain a popular investment choice today.

Gold coins are physical pieces of gold minted by governments and private companies. They come in a variety of weights and sizes, and each one has a different value. Gold coins are typically made of 24-karat gold, which is pure gold and are very expensive, making them a good investment choice.

Note that the current worth of a gold penny varies depending on the gold content and condition of the coin. The more gold a coin contains, the more it’s worth.

When investing in Gold, it is important to remember that you are investing in a physical asset. This means that costs will be associated with storing and insuring your investment. Gold coins can be stored in a safety deposit box at your bank or in a home safe. If you plan on buying a large quantity of gold coins, it is important to insure them against theft and damage.

What are the Different Types of Gold Coins?

There are several different types of gold coins that you can invest in (such as antique coins which we won’t cover below as they are more for collecting rather than for investing purposes in our case). Below we cover some of the more popular ones when it comes to investing in gold.

1. Bullion 

Bullion coins are the most popular type of gold coin. They are made by governments and private companies and come in various weights. The value of these coins is based on the current market price of gold, making them a good investment choice.

Some of the more popular bullion coins include the American Gold Eagle, Canadian Gold Maple Leaf, South African Krugerrand, Australian Gold Kangaroo/Nugget, and Austrian Gold Philharmonic.

These gold coins are usually issued by government mints with a guaranteed weight and purity and are recognized around the world for their gold content.

2. Proof 

Proof coins are specially made for collectors and have a higher gold content than regular bullion coins. These coins are usually more expensive and have a limited mintage.

Proof gold coins are a special type of coin minted with exceptional care and precision to showcase the highest level of craftsmanship and quality.

Gold bullion coins are one of the types of gold coins you can buy for investment purposes.
Gold bullion coins are one of the types of gold coins you can buy for investment purposes.

3. Numismatic 

Numismatic coins are also known as rare or collectible coins. The value of numismatic coins comes from more than their gold content but also from their rarity, historical significance, condition and collector demand. 

Generally these gold coins are the best fit for experienced investors and are valued for their artistic design, limited supply and historical context and not just gold content.

4. Semi-Numismatic Coins

These coins can be either billions or numismatic, depending on their rarity. They are a good investment for those looking for both stability and potential growth.

These coins may command a higher premium over standard bullion coins but still offer a level of liquidity and investment potential alongside their collectible appeal.

Related Read: What are Investment Mandates and Why Do You Need them?

Why Invest in Gold?

Are gold coins a good investment? 

Well a great way to answer this question is to look back at the historical price of gold and see how it stacks up against other investments like stocks and bonds.

One of the remarkable aspects of gold is its ability to maintain value over long periods. Historical data shows that gold prices have experienced significant fluctuations, yet they have generally trended upward over decades. 

Gold is often considered a hedge against inflation. This means that during periods of rising inflation, the value of gold tends to increase as well. Investors turn to gold as a way to preserve their purchasing power when currency values are eroded by inflationary pressures.

Gold also acts as a hedge against economic uncertainty and market volatility. During times of geopolitical tensions, economic crises, or stock market downturns, investors often flock to gold as a safe asset.

Basically, gold’s historical performance showcases its resilience as an investment and its role as a hedge against inflation and economic uncertainty.

are gold coins a good investment option?
The best type of gold coin to invest in depends on your goals and preferences. Bullion coins are a good choice if you’re looking for a safe investment that will hold its value.

What is the Best Type of Gold Coin to Invest in?

The best type of gold coin to invest in depends on your goals and preferences. Bullion coins are a good choice if you’re looking for a safe investment that will hold its value. If you’re looking for an investment that has the potential to appreciate in value, then numismatic or semi-numismatic coins are a better option.

However, as a first-time investor, it is essential to do some research before investing in gold coins. Make sure you understand the different types of coins and their worth. It is also crucial to know where to buy gold coins from a reputable dealer. When done correctly, investing in gold coins can be a wise decision that will help you reach your financial goals.

Related Read: Dos and don’ts of Gold Investment

What are the Benefits of Investing in Gold Coins?

There are many reasons why people invest in gold coins. Let’s look at some of these reasons.

i) Gold coins are tangible assets that you can hold in your hand. You can also store them in a safety deposit box or a home safe. This makes gold coins a good investment choice for those who like physical assets.

ii) Gold is a valuable commodity not affected by inflation. This means that the purchasing power of gold will remain the same, no matter what happens to the economy.

iii) Gold is an asset that holds its value, even during economic downturns. This makes gold coins a good investment for those looking for a safe haven during tough times.

iv) Gold coins offer diversification for your portfolio. Investing in gold can protect your assets and reduce your risk. For instance, if the stock market crashes, gold will likely increase in value. This makes gold a good investment for those looking to diversify their portfolio.

v) Gold coins are easy to buy and sell. You can buy them from various dealers, both online and offline. You can also sell your gold coins when you need to. This makes gold a good investment for those who want to liquidate their assets quickly.

vi) Gold coins are easily transferable, unlike other assets, such as real estate. This makes them a good investment for those who may need to move their assets quickly.

What Are the Risks of Investing in Gold Coins?

Even though there are many benefits to investing in gold coins, there are also some risks. It is important to be aware of these risks before investing. Below are some of the most common risks:

1. Volatility: The price of gold can be volatile, meaning it can go up and down in value quickly. This makes gold a risky investment for those who need to liquidate their assets quickly.

    2. Storage: Gold coins must be stored in a safe place, such as a safety deposit box or a home safe. If they are not stored properly, they could be lost or stolen.

    3. Fraud: There is always the risk of fraud when buying gold coins. Make sure you buy from a reputable dealer to avoid getting scammed.

    Long Term vs Short Term Investing in Gold

    Investing in gold coins can be approached from both short-term speculative trading and long-term wealth preservation perspectives. 

    Short-Term Speculative Gold Trading

    Short-term trading in gold coins typically involves buying and selling based on short-term price movements and market trends. Traders may use technical analysis, market news, and sentiment indicators to make rapid buy or sell decisions in the hopes of capturing quick profits. This approach is often associated with higher risk and requires active monitoring of market conditions.

    Short-term traders in gold coins may engage in activities such as day trading, swing trading, or speculating on short-term price fluctuations.

    And my approach to day trading, whether stocks, crypto, Forex or even gold is to simplify day trading technical analysis and indicators in order to become a consistent trader which will lead to profitably over time and with a lot of practice and testing out strategies.

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    Long-Term Gold Investment Strategies

    On the other hand, long-term investment strategies in gold coins focus on wealth preservation, portfolio diversification, and capital appreciation over extended periods. Long-term investors typically hold onto their gold coins for years or even decades, leveraging gold’s historical role as a store of value and hedge against economic uncertainties.

    Long-term investors in gold coins often prioritize stability, asset allocation, and risk management within their overall investment portfolio. They view gold as a strategic asset that can provide protection against inflation, currency devaluation, geopolitical risks, and market downturns.

    Tips to Consider When Buying Gold Coins

    Now that you know some of the risks and benefits of investing in gold coins, here are a few tips to consider when buying them:

    • Do your research: Before buying gold coins, it is important to do your research. Make sure you understand the different types of coins and their worth. You should also know where to buy gold coins from a reputable dealer.
    • Create a budget: It is important to create a budget before buying gold coins. Determine how much you can afford to spend and stick to your budget.
    • Consider your goals: When buying gold coins, it is important to consider your financial goals. Gold coins can be a good investment for those looking to diversify their portfolio or protect their assets from inflation.

    Are you looking for an investment that will hold its value or one that has the potential to grow in value? Investing in gold coins can be a wise decision, but there are also some risks to consider.

    If you research and invest wisely, gold coins can help you reach your financial goals. Ensure you understand all the risks and benefits before investing your hard-earned cash.

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