In the ways to gold investing, gold can be acquired in various forms such as coins, bars, and jewelry. Jewelry generally does not contain enough gold to be worth much as a commodity investment.
For example, the weight and karat of the gold in the jewelry determines its value. Ten-karat gold means that it has 42% gold content and 58% other metals. Fourteen-karat gold is actually 58% pure gold and about 75% of the content of 18-karat jewelry is gold. Therefore, a piece of 14-karat gold jewelry that weighed about an ounce would be worth $716, or 58% of $1,235 — the current market value. From there, a seller could expect an offer of around 60%-80% of that price, or $430 to $570.
When you buy coins or bars you are getting a product that has a fineness of at least 99.5% – in other words, pure gold.
When it comes to coins and bars, one of the big differences between them is that when you sell coins typically you will get a few dollars over melt value, or market value.
It was in 1974 that Americans regained their “right” to own gold bullion. This followed President Roosevelt’s “gold call-in” of 1933, it was during this period Americans could only own numismatic coins whose prices were determined more by collector interest than by the value of the coin’s gold content. Numismatic and collector coins can sell at huge mark-ups, sometimes prices can be many times the value of their gold content. While many gold bullion investment coins may also accumulate a collector’s value, their prices more often sell at only small markups over the value of their gold content.
Today, American Gold Eagles are the best selling gold investment bullion coins in the world. While the South African Krugerrand remains immensely popular, it is now rarely imported into the U.S. for the investment market. Because of its lack of necessary fineness, Krugerrands are not eligible for inclusion in Gold IRAs. Due of their enormous popularity, American Eagles are minted in the millions of units. Chinese Pandas, on the other hand, are minted and in much more limited runs and tend to have greater numismatic value over the years. Pandas meet fineness standards for inclusion in gold retirement accounts.
Also gaining popularity among gold investors are the American Eagle Proofs, the Canadian Maple Leafs, the Austrian Philharmonics.
What leads many investors into trouble is by buying semi-numismatic or numismatic coins, otherwise known as rare coins, which can come with huge premiums that seldom recoup their value.
A good rule of thumb is to leave the rare coin buying to the rare coin dealers. Consumers interested in rare coins should go to professional auctioneers (e.g. Bowers & Mirena, Christie’s, etc.) who have experts on staff and can objectively grade the coins the same way an antique dealer would appraise goods.
If a broker tries to sell you a story with the coin like it’s from the “old world and there are only a few thousand in existence,” experts would advise you to go elsewhere..
To understand gold investing is to not confuse investing in gold with things being sold as “gold investments.” You want something that tracks the price of gold as close dollar to dollar as possible. Many so-called investment coins, especially those offered by television shopping networks, are most often only gold-clad and do not contain the necessary fineness to be true investment coins.
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To learn more about gold and the many reasons why your portfolio could benefit from gold and silver investing, download our mini-course and guide to gold and silver investing. It’s absolutely FREE and is full of tips and information that could save you thousands of dollars. You can also learn more by speaking to one of our experienced investment specialists by calling us 213-465-4835 or visit us at www.RCBullion.com.
