Gold is one of the most traded commodities, and for centuries has been used as a means of exchange. In the modern technological era, investing in gold has been made easier, faster, and more secure since the introduction of online trading platforms. Gold is one of the commodities with decent returns on investment.
Gold coins are an example of physical forms of gold traded in the financial markets. One might wonder; are all gold coins similar? What determines the market value of a gold coin?
This article sheds light on the different types of gold coins, their distinct characteristics, and the overall benefit of trading the gold coins in the market as an investment option.
The Variety of Gold Coins Traded as Investment Options
There are many different ways of classifying gold coins, and each classification is valued differently in the market. The most common classes of gold coins are bullion, numismatic, proof, commemorative, and world gold coins. Each type of gold coins has unique characteristics as discussed below.
Bullion Gold Coins
Most people understand bullion trading as the buying and selling of gold bars. Gold coins of the same purity and gold content composition as the gold bars are called bullion coins.
The production of bullion coins is done to facilitate trading of gold bullion in smaller quantities. To buy and sell gold bars in Rochester MI requires a significant monetary investment, which may not be readily available to lighter investors.
Bullion coins are produced with the same gold quality as the gold bars. Thus, they offer the investor a chance to trade high quality gold in smaller quantities. The bullion coins are characterized by purity of the gold used in their manufacture. Bullion coins do not have any other additional value apart from that of the metal itself.
Numismatic Gold Coins
A numismatic gold coin is a rare collectible coin, valued for its scarcity. Most of the numismatic gold coins may have lower gold content, but still maintain a value higher than the spot market price for gold.
Collectors travel around the world looking for the numismatic coins, then stack them up for future trading. Valuation of the numismatic coins is done based on the production period, the gold content of the coin, and the number of such coins circulating in the market. The most uncommon coin is assigned the highest value.
Commemorative Gold Coins
A commemorative gold coin is produced to mark a special occasion or phenomena. Such coins are very rare to find, as only few of them are made to meet the event requirements. Commemorative coins have denominations similar to those of legal tenders.
The value of a commemorative gold coin is assigned based on the amount of gold in it, the age, and scarcity of the coin.
Golden World Coins
Gold world coins are some of the most highly valued types of coins. World coins are similar to trading indices in their physical forms. A gold coin is valued according to the denomination and the currency they are minted in.
The gold world coins have a high purity level that add on to their perceived value in the market. There are very few ancient world coins in circulation today, making them some of the most highly valued forms of gold in the market.
Proof Gold Coins
Proof coins are improved versions of existing gold coins. The coins are stroked and polished several times to enhance their appearance. The proof coins are not circulated for mass usage but are still tradable forms of gold. Just like bullion gold coins, proof gold coins are highly valued.
Benefits of Trading Gold Coins
Gold coins are preferred as investment options due to their holding and storage flexibility. The gold coins are important wealth storage tools and help to hedge against inflation and market crashes.
Conclusion
It is important to identify the type of investor you are before trading gold coins. Availability of gold in various forms and nature provide investors with a good number of investment options to choose from. A gold coin portfolio will help you make money and preserve its value.
