Buying gold coins is a big deal. With the spot price for gold at or near historic highs, a gold coin has become a major purchase. So, you should feel as secure and comfortable in your choice of dealer as you possibly can.
Gold coin investors have been trusting Provident Metals as their connection since 2009. Joe Merrick founded the company in response to feedback from investors who wanted a trustworthy and safe place to buy and sell. The name, Provident, alludes to the importance of cultivated wisdom when you make a decision on a gold coin.
Almost all Provident customers report a positive experience. Within the Provident internal rating system, 98% of more than 50,000 reviewers report a 4-star or 5-star transaction. In addition, more than 1,000 Google reviews have yielded a 4.9 out of 5 stars rating to Provident’s level of service. The Better Business Bureau recognizes Provident as a BBB-accredited business and assigns it an A+ rating.
Long story short, Provident Metals is one of the most trusted and respected precious metals dealers in the world. So, let’s discuss the considerations associated with making your first gold coin purchase with Provident.
As long as you choose an authentic coin at a reasonable price, there is no wrong answer. At the end of the day, the answer to this question depends entirely on your investment strategy and goals.
The first thing to determine, however, is your budget for investment. You need to have a specific dollar amount in mind that you can invest freely. The money allotted for gold coins should not be taken from your rent/mortgage, food, utilities, or necessities budgets.
From that budget figure, you can quickly answer the first consideration – affordability. You should immediately calibrate your search to coins that fall within your budget.
As you’ll quickly determine, affordability is largely determined by a single factor – weight. The mass of gold contained within a coin informs its baseline value, as its metal content is valued in direct proportion to the spot price for an ounce of gold.
Another element that can influence the price of a gold coin is its purity. Few gold coins are available with less than 90% gold, but some of them can be almost completely pure. In fact, there are many common options minted in .9999 fine (pure) gold.
For the record, a gold coin is a specific item, not just a block of gold. They are authentic products of sovereign mints and bear the full faith and credit of their respective countries’ governments.
As a result, coins are distinct from other gold purchases, like bars or rounds, in that their aesthetics and reputation are of great importance to the prices they command. Some mints and the gold coins they produce are valued by investors more than others.
It is sometimes possible to find less-pure gold coins priced higher than their purer counterparts. However, you may decide that they are worth the price because of their inherent liquidity, or ease of sale.
If your investment strategy is more short-term and you’re planning to buy and sell with some frequency, it might be worthwhile to choose a more expensive coin with a better reputation, as buyers will be more readily available to you.
For many investors – particularly those based in the United States – gold coins of the US Mint fit the bill for coins sold at a premium due to their cachet. For both of the bullion coins produced domestically, expect to pay a bit more due to the demand for them. As mentioned, however, they are likely to be significantly easier to sell when you decide to realize some profit on your investments.
The American Gold Eagle is the premier bullion coin of the US Mint. It is the more popular of the two by a wide margin despite bearing a lower purity.
However, the Eagle series appeared in 1986 as a direct counter to the South African Krugerrand. As the Krugerrand was minted in 22-karat gold, or with a 91.67% purity level, the Gold Eagle was engineered to have a near-identical composition.
The only significant change that US law required was the addition of silver to the mix. Where the rest of the Krugerrand consists only of copper, Gold Eagles’ composition includes 3% silver as part of its makeup.
The US Mint typically releases new 1 oz Gold Eagles in the month of June every year. In addition, it also produces ½ oz, ¼ oz, and 1/10 oz versions of the coin.
Be aware, however, that premium percentages escalate as you drop down in size. Although the overall price for a ¼ oz Gold Eagle is less than a 1 oz version, you are going to have to pay a proportionally larger amount of premium due to the increased production costs associated with them.
Key takeaway: The Gold Eagle is one of the most popular and recognized gold bullion coins on the planet, and it is extremely liquid and easy to sell. However, expect to pay a bit extra premium in comparison to other countries’ bullion offerings due to the popularity of the Gold Eagle.
Like the Gold Eagle, the genesis of the Gold Buffalo was likely in order to compete with other gold coins on the world stage. Because countries like Canada and Australia were producing their bullion coins at a .9999 purity level, the US government elected to begin production on a similarly-pure coin in 2006, 20 years after the debut of the Gold Eagle.
Other than their purity, Gold Buffalos are distinct from the Eagles in the sense that they are almost all produced in 1 oz denominations. Fractional Gold Buffalos have only been offered during a single production year (2008), and are collector’s items with enormous premiums these days.
Gold Buffalos are quite stable products, and their prices reflect as much. Thus, the price demands of a Gold Buffalo are largely unaffected by the coin’s mintage year. However, despite their purity, Gold Buffalos are simply not as popular as their elder brothers.
Key takeaway: Gold Buffalos offer the highest gold purity level of any American coin, but their relative lack of popularity next to the Gold Eagle means that they are less liquid, and are better suited for long-term investors who don’t wish to trade frequently.
The US Mint is not the only source of fine bullion coins in the world. There are several excellent sovereign mints producing respected gold coins that are worthy of investment.
We already mentioned a couple of those other top producers. Canada’s Gold Maple Leaf was the first mass-produced coin minted at a .9999 purity level. The Royal Canadian Mint introduced the series in 1979, and its products continue to be revered for their purity to this day.
The Perth Mint, which is the official bullion mint of Australia, also produces .9999 purity gold coins. In fact, it has two different .9999 product lines – the Australian Lunar and the Kangaroo. The Lunar offers an additional bit of value in that they come in discrete sets, as each year follows a year of the Chinese Zodiac.
Finally, you can also take a look at Austria’s Philharmonics, the Bavarian Mint’s Somalian Elephants, the Chinese Gold Pandas, the Mexican Libertads, or, of course, the South African Krugerrands if you would like to explore the coinage of different countries.
All of the gold coins described above are current coins that are in active production. They are valuable due to their metal content, their reputations, and their aesthetic charms.
Within these modern bullion offerings, there is a subset that could provide you with a particular sense of adventure and excitement. Specifically, there are sets of bullion coins that are part of a distinct group of designs or releases.
We mentioned one of these above. The Australian Lunar series is in its third iteration of the 12-year Chinese Zodiac, and there is likely significant value to be found if you can assemble full sets of each edition. Similarly, the Bavarian Mint’s African Wildlife series (of which the Somalian Elephant is a member) offers the opportunity for a complete collection.
You could also try to buy an example of every mintage year of a coin series. It may be particularly valuable if you choose a series with production gaps, such as the Mexican Libertads.
Now, gold has been a medium for coins for thousands of years. Now that no sovereign government issues gold-bearing coins as part of its circulating currency, there are numerous opportunities to buy historical coins that bear gold.
These coins bear the added value benefit of bearing historic significance, either as the earliest pieces produced by a well-known institution, or as the coinage of a famous historical era. For instance, the days of the $10 Eagle, the $5 Half-Eagle, and the $2.50 Quarter-Eagle coincided with the California Gold Rush, the Industrial Revolution, and the Wild West.
The notion of the condition of a coin, which is always important, is especially so when it comes to historical pieces. If you can secure a 200-year-old coin in mint condition, it may be worth millions of dollars to you.
Yes, so long as you choose a reputable dealer with a track record for success.
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