Q: I want to buy U.S. gold coins but am not sure which is
better: bullion or rare coins?
A: They both have their pros &
cons which you’ll need to consider in order to determine which are the right
ones for you. Listed below are some of the factors to keep in mind...
Pros:
Least expensive type of U.S. gold coins (e.g., American
Eagle and American Buffalo coins).
Price is closely tied to the daily “spot price” (i.e., melt
price) of gold.
Cons:
While
a good investment instrument for those wishing to invest in gold,
bullion coins are of little interest to the collector.
Their large quantities and perfect strikes give them little room for upward mobility as numismatic (collector) coins.
Rare Coins
Pros:
Increasing demand and scarcity make for increasing values
of these coins as time passes. Since in 1933, collectible gold coins were
exempted from government confiscation, many believe that should such a
confiscation occur again, the same rules would likely apply.
Cons:
Less liquid; not tied as closely to the spot price of
gold.
Numismatic (collector) demand may create premiums may be many times over the spot price of the coin’s actual gold content.
Numismatic (collector) demand may create premiums may be many times over the spot price of the coin’s actual gold content.