A common question from novice investors of gold and silver is what in the heck is the difference between a bullion and a numismatic coin?
Unfortunately, unscrupulous precious metals dealers may exploit this “ignorance” to steer customers in the wrong direction – forcing them to spend more money for lower quantity. (We’ll revisit this fact in a bit).
First, let’s address the fundamental difference between bullion and numismatic coins.
Let’s begin with bullion coins. Well, they are gold and silver coins purchased for one of three reasons: investment, inflation hedge or survival.
Much of the time, all three purposes factor into the decision to invest in bullion coins.
A bullion coin’s weight is expressed as an even amount, such as 1-ounce, 1/2-ounce or even grams (for gold and silver bars).
With only a few exceptions, bullion coins are manufactured year-to-year and are purchased primarily as an investment.
Examples of bullion coins include:
- U.S. Gold Eagles
- Canadian Gold Maples
- U.S. Silver Eagles
- Canadian Silver Maples
- South African Krugerrands
- 90% Junk Silver (pre-1965 half-dollars, quarters, dimes, etc…)
(Although 90% junk silver quarters are no longer produced, their value is strictly based on the coin’s silver content and not its condition.)
On the flip side, Numismatic coins are considered collectible and are not produced in modern times. These coins are are primarily valued for their rarity and not as much for their actual metal content.
In fact, Numismatic coins are generally worth more than their metal content. Incredibly rare and purchased mainly by collectors, they’re not an investment in the typical sense.
Examples of numismatic coins include:
- Pre-1933 $20, $10 Eagle coins
- Peace Silver Dollars
- Swiss 20 Francs
- British Sovereigns
When evaluating options for buying gold or silver, it is important to consider your primary objectives and ask yourself a few key questions:
- Are you interested in coins from a historical /collecting perspective? Perhaps you’re interested in owning a piece of history.
- On the other hand, are you searching for a way to invest for your future?
- Or has the prospect of inflation and currency depreciation drawn you in?
Precious metals broker, Don Stott, draws a poignant comparison:
Let’s say you need to drive from Florida to California – at least a 2000 mile trek – and you have the choice of a Model-T Ford or a brand new Cadillac.
While the Model-T is an impressive, beautiful car, it also hails from a bygone era. Indeed, there are only two forward gears and it doesn’t go all that fast. While it would make a great show-car in a parade, it isn’t prepared for your arduous journey.
The “thousand-mile trip” is a great metaphor to use when considering bullion versus numismatic coins. While numismatic coins are exciting from a historical/collecting perspective (like the Model-T Ford), they aren’t an investment meant to make the distance to a safe, secure future.
“Even though there are those who use numismatic coins as a store of wealth, their value is not always associated with the bullion spot price. Only the most experienced collectors are successful at employing this tactic.”
Another crucial point (which we hinted at above) is, if you’re thinking of purchasing gold or silver as an investment, DO NOT allow anyone to convince you to buy numismatic coins because “they can’t be confiscated.” Indeed, that is a myth perpetuated by many an unscrupulous dealer.
For a wide selection of bullion and numismatic coins, we invite you to browse Provident Metals’ online gold bullion store for current prices and a complete inventory. If you’d prefer to place your order by phone, please call us weekdays, toll-free, at (800) 313-3315.
Disclaimer: Information contained in this article is NOT to be considered investment advice. Do your own research and evaluate your individual situation before making investment decisions.