The Coolest Gold Coins For Investment
Maybe you already hold a strong position in gold. Maybe you’re looking for more information before taking the plunge. Either way, you’ve come to the right place. I
We’re strong advocates for the value of investing in gold.
I’ll bet that you’ve spent years listening to your broker telling you not to invest in gold. I’m sure your broker has already told you that gold is too risky. Brokers often say that gold delivers poor returns. Maybe your broker even said that you can’t legally hold gold in an IRA. Or you shouldn’t invest in gold because it’s not liquid.
Brokers give out a lot of wrong information when it comes to investing in gold.
They just don’t know much about gold.
Well, if you didn’t know all this before, I bet you’re happy and excited that your broker was wrong. At least this time.
- Gold is a great investment.
- Gold earns excellent returns.
- Gold is a safe investment.
- Gold more than holds its own against inflation.
- Gold is fun to invest in.
- If you want, you can combine learning interesting facts about gold with investing in gold. That alone is pretty cool.
- You can hold a position in gold in many different types of accounts.
- You can put investment grade gold in an IRA.
- Gold is quite simply a terrific investment. It’s an important part of any portfolio.
Since you know you want to invest in gold, it’s time to decide how you want to hold your precious metal. If you already hold gold, you may want to diversify your ownership while staying in gold. Here are a few ideas.
You can buy an ETF, of course. ETFs (exchange-traded funds) are bought and sold over the counter. ETFs invest in gold, gold futures, derivatives, shorts and longs. The plan is that the ETF will outperform the gold index using these techniques. Some do.
ETFs rarely take physical possession of the gold. When you own shares of a gold ETF, you usually own certificates rather than physical gold. That’s OK.
It’s still a good hedge against inflation. It’s still pretty safe. It may even be more liquid than physical gold because you can sell your shares over the counter. But an ETF is not much more fun than any other asset in your portfolio.
We think an ETF is an OK choice if you want to take a position in gold. But it’s missing something that you only get with physical gold.
With physical gold, you get to own the beauty of the gold itself. You get the weight and heft of owning something real. You get a peek into the mystique surrounding gold. You get the aura that has enthralled people for centuries. You get all the history, all the glamour and all the allure of gold. You get the whole package when you own physical gold.
As you think about allocating your funds to gold, here are some interesting gold bars and coins to consider.
The U.S. Mint began producing American Eagle coins in 1986. The American Eagle is available in gold, silver and platinum in various weights. Each weight coin carries a different denomination.
- 1/10 ounce = $5 face value
- ¼ ounce = $10 face value
- ½ ounce = $25 face value
- 1 ounce = $50 face value
Be careful not to take these to a bank or store by mistake. By law they can only treat the coins as though they were worth the amount of their face value. This is MUCH less than the value of the precious metal in the coins.
American Eagles are available as proof and uncirculated coins for collectors.
American Eagle coins have the “Walking Liberty” on the front side. This is a depiction of a famous design created by Augustus Saint-Gaudens. It shows Liberty with flowing hair holding a torch in her right hand and an olive branch in her left hand.
American Eagle coins have a reverse side design by Miley Busiek. The design shows an eagle carrying an olive branch flying above a nest with another eagle and two baby eagles.
American Eagle gold coins are not the usual 99.99 percent fine gold that is the usual for investment grade gold. These coins are 91.67 percent gold, 3 percent silver and the balance is copper. Even so, the IRS allows investors to include these coins in an IRA.
The U.S. Mint brought out the American Buffalo coin in 2006 to meet demand for an American collectible coin made of 99.99 percent fine gold. They include an entire ounce of this investor grade of gold. The design of the American Buffalo is very similar to the U.S. nickel.
The heads or obverse side has a profile of an American Indian. The artist, James Earl Fraser, modeled the design on a composite of several different Indians from various tribes so that the design’s features would be more universal.
The reverse side includes an American Bison, which most people call a buffalo.
Until recently, the American Buffalo coin had a strict mint limit of 300,000 coins per year. There was also a “per household” limit of 10. There are no such limits on the 2014 coins.
The American Buffalo carries a face value of $50.
Collectors should beware of cheap imitation coins. Because collectors and experts think that the design of the American Buffalo is one of the most beautiful U.S. coins ever minted, a few companies have copied the design in baser metals.
The best way to tell if an American Buffalo coin is a knock off is to look for the currency denomination on it. If there isn’t a denomination, it is not a U.S. Mint coin.
If there is a denomination, check the coin carefully for the word “copy” embedded somewhere in the design. By law, the word must be on any coins with a face value if the mint did not create them. If course, such coins are not usable as legal tender despite the face value.
You should also look for the word “cladding” in the description or specifications. Cladding is another word for plated. Real American Buffalo coins are solid gold, not plated. The specification should say 99.99 pure gold if it’s a real American Buffalo coin.
The best way to avoid buying a fake is to buy from a reputable dealer. Reputable dealers will provide a certificate of authenticity for real coins.
Commemorative U.S. Coins
The U.S. Mint releases several series of medals and commemorative coins each year.
First Spouse Series
One current series is the “First Spouses”. These coins are one half ounce 99.99 pure investment grade gold and carry a $10 face value. They are minted at West Point. There is a 10,000-piece mint run limit per coin.
First Spouse coins are released each year in conjunction with the spouse’s president $1 silver coin. The mint releases at least four of these coins per year. They are released in the order of the spouse’s service.
The front of the coin features a portrait of the First Lady and the reverse has symbols that represent the special interests of the woman shown on the face of the coin.
The series has been in production since 2006. Commemorative coins are minted in proof and uncirculated versions.
Don’t be fooled by the bronze replicas. Those are lovely commemorative pieces, but not investment quality items. They are made from 90 percent copper and 10 percent zinc.
They medals come with certificates of authenticity from the U.S. Mint, but it merely shows that the government minted them.
John F. Kennedy
The U.S. Mint also issues a 50th anniversary gold coin in honor of President John F. Kennedy. The Kennedy coin weighs about three-quarters of an ounce and is pure 24K (99.99 percent pure) gold. It carries a face value of one half dollar.
Frank Gasparrohe of the U.S. Mint designed the Kennedy coin. It features the same reverse side design as the original Kennedy half-dollar. The design features more stars than any other U.S. coin designed for circulation. This coin sells at a substantial premium over the price of the gold, indicating its value as a collector’s item as well as an investment in gold. The mintage limit is 75,000.
The South African Krugerrand
The Krugerrand is the gold coin most often credited as the first government issued coin whose value on the market exceeded its face value. It was introduced in 1967. It served as the inspiration for other governments to introduce investment grade gold coins of their own, including Canada’s Gold Maple Leaf, the British Brittania and of course, the U.S. American Eagle.
It contains one troy ounce of gold. It carries no face value, just its gold weight.
The South African government decided to issue the coin as part of its strategy to increase market uptake of South African gold. The South African government always intended the coin to be used as an investment vehicle for the individual rather than as actual currency.
The strategy was quite successful. Within a little over ten years, this coin alone made up about 90 percent of the global gold coin market.
The name of the coin is a combined version of the South African official money – the Rand – and the name of person depicted on the coin, Stephanus Johannes Paulus Kruger. Kruger was one of the first presidents of South Africa.
The Krugerrand includes text in both English and Afrikaans, the language of South Africa.
Since 1980, Krugerrands have been minted in several denominations, including one ounce, one half ounce, one quarter ounce and one tenth of an ounce.
Estimates are that more than 47 million Krugerrands are in circulation. Several countries banned trading in Krugerrands during the 1970s and 1980s because of concerns about the South African policy of Apartheid. All of these bans have since been lifted, and the Krugerrand now trades freely everywhere in the world.
The number of Krugerrands produced each year varies a great deal. The most ever minted in a year was 6 million in 1978. The lowest yearly total was slightly over 23,000 in 1998.
Interestingly enough, the Krugerrand weighs more than an ounce. Its actual weight is 1.0909 troy ounces. However, it is made from 91.67 percent pure gold, which is 22 karat gold, not 24 karat. The result of the overage in weight is that the Krugerrand includes exactly one ounce of gold. The balance of the coin is copper.
This alloy of copper and gold is known as crown gold. Crown gold is the grade of gold historically used in British gold sovereigns.
The South African mint creates proof sets of Krugerrands that typically sell at a premium above the value of the gold. Circulated Krugerrands also carry a premium. This indicates that collectors place a value on these coins even above and beyond the value of the gold.
Of course, there are dozens of other investment quality gold coins around. These few covered here in this issue of the newsletter are just some of the more common yet fascinating coins. The truth is that all gold coins have interesting stories and a fabled history that enhances the pure value of the gold.
Platinum and silver coins have their own intriguing tales to tell. It’s fun to hear the stories. It’s almost as rewarding as the payoff you get as the price of their primary metal rises with market changes.
Investing in hard assets such as precious metal is a pleasant way to earn superior returns on your investment. Over time, the price of gold always beats inflation. That makes it safe way to invest. Gold is an excellent hedge investment to protect the value of your capital from the ravages of runaway inflation.
Gold is also a fun item to invest in. It is fun to store your gold at your home or in a bank deposit box where you can see and admire it at any time. You should only store your gold at home if you have the right security in place though.
You can store gold in a secure vault. You may choose to own gold with paper certificates naming you as the owner of the gold. No matter how you choose to hold your stores of gold, there is always a story behind the gold.
In our next issue, we’ll talk about some other interesting coins that may persuade you to invest in gold or another precious metal. Gold is one of the most safe, secure and high return investments you can make. It is also the one of the most interesting.
By the way, relax. There won’t be a test on this history lesson. This is all for the fun and pure joy of learning more about the stories behind your gold.