As the U.S. economy continues to drift in the doldrums, it’s no surprise that an increasing number of investors are turning to gold to protect their assets.
Gold has historically performed well, leaping in value during times of recession and depression. Gold’s proven track record in times of economic trouble has convinced many investors that gold is the ultimate safe harbor. Their assumptions have proven to be correct, as the price of gold has tripled in the past four years, while the stock market and real estate markets continue to struggle.
Gold coins are a popular form of gold investing because of they’re tangible, convenient, and easy to exchange. In fact, gold coins have become so popular lately that the U.S. Mint has had to halt production of gold bullion coins to rebuild its supply of bullion blanks.
If you’re wondering about how gold coin prices are set, you need to know a little about gold coins themselves. In general, there are two types of gold coins, bullion and numismatic coins.
Bullion coins value is directly tied to the value of gold and the purity and weight of the coin. For bullion coins, if the coin is 99 percent gold and weighs one ounce, its price will be 99 percent of the current price of gold for one ounce, plus a premium the seller will charge. In general, investors should draw the line at paying a premium of higher than four percent of the metal value of the coin.
Pricing of numismatic coins is a little trickier. In addition to the metal value of the coin, traders in gold coins also take into consideration other factors.
Condition plays a large role in the pricing of gold coins. Coins that have fewer scratches and blemishes are valued higher than more damaged coins. Coins are also often valued on their age and scarcity. And of course the value of the metal of the coins still plays a large role in their pricing.
Pricing numismatic coins can be very complicated, as there are so many factors appraisers must weigh, and factors can cancel each other out. For example a modern gold coin in poor condition may be worth more than an older coin in good condition because its rarer. On the other hand a rare gold coin may loose some of its value if it is substantially damaged.
There are a variety of professionals who can reliably price gold coins. The Professional Coin Grading Service can be of great help when you are trying to determine the value of your gold coins. They have trained professionals who can assign a grade to your coin which will figure into the value of the coin.
Learning about how gold coins are priced is part of the fun of investing in gold coins. As you read more and buy more, you’ll quickly become experienced in evaluating coins, thus enabling you to make better investment choices.
