How to Buy Gold Bullion

Gold bullion generally consists of gold bullion bars and gold coins. Gold bullion is generally gold that is priced exclusively for it’s gold content.

Rare Gold Coins for Collectors

Rare Gold Doubloon

Coins that are rare and are sought by collectors because of their age or rarity are not considered gold bullion even though they are made of gold. Such coins are often priced based primarily on their value to collectors. For example, a recent gold coin being sold on eBay was a 1792 Spanish Colonial 1 Escudo Doubloon. This coin is 0.875 fine gold with a weight of 0.0951 ounces. It’s gold value is about $136, but the current bid was just over $310.

If you are a coin collector you probably know something about the rarity of coins and coin grading. You’ll also need to establish a relationship with a reputable coin dealer.

Trading in rare gold coins, such as pre-1933 gold coins, has some advantages. Of importance to some people is that as long as transactions are under $10,000,  purchase of these gold coins is not reported to the IRS or other government agency. Other reporting limitations apply to gold and silver bars and common coins like Krugerrands and Maple Leafs. See your financial adviser or attorney for details.

Rare gold coins are an investment many people favor in good economic times. But, in times of economic turmoil the coins may need to be traded for goods and services. There is no guarantee that their numismatic value (the premium over the value of the base metals) will be recognized when liquidation of a collection is necessary. Perhaps only the gold bullion value will be considered.

In term of coins and even some old bars, you need to decide if you are a collector or an investor. Collectors deal in rare coins while investors deal in gold valued by weight.

Investing in Gold Bullion

Investors are concerned only with the amount of gold bullion they hold. As an investor you may buy gold and periodically add to your holdings. Some investors buy and sell gold bullion depending on the market conditions. When gold seems to reach a temporary peak they sell. When gold dips to a temporary low they buy.

One of the reasons for holding gold (or silver for that matter) is it’s easy convertibility into local currency, like the US dollar. As the dollar (and other fiat currencies) lose value, gold prices will increase.

Some people anticipate a time when the fiat currencies will be almost worthless (some call them toilet paper currencies). At that time, only real money will be of any use. This real money can be gold or silver which have always been recognized as a standard of value.

Many people keep a portion of their investments in gold and silver at home or nearby for just such an economic collapse. This availability of real money gives them some assurance of a continued lifestyle to which they are accustomed.

Gold Bullion Coins

Gold bullion coins are simply standard sized coins that have been recently minted. This makes them familiar and easily traded for local currency.

Gold Bullion: Gold Eagle

Most popular gold bullion coins in the United States are Gold Eagles minted by the US Mint. Gold Eagles are minted with four weights (measured in troy ounces) of pure gold: 1 ounce, half ounce, quarter ounce and 1/10 ounce. These gold bullion coins are 22-karat and contain 91.6% pure gold with 8.4% copper and silver. The coins actually weight more than the stated weight so as to include the additional copper-silver alloy.

There are a number of popular national gold bullion coins other than the Gold Eagles. Perhaps the most popular coins are the Krugerrands from South Africa. National gold bullion coins are minted in Canada, Mexico, China, Australia, Hungary and other countries. And, in addition, commemorative gold coins are produced by a variety of manufacturers worldwide.

The important concept behind gold bullion coins is that they are easily convertible into local currencies. This allows their easy use in daily living. So, when the economy collapses (as all fiat currencies do) gold bullion can become a useful and necessary medium of exchange.

Gold Bullion Bars Stored in Vaults

Most moderate sized to large gold bars are stored in vaults and never leave the vault. They are bought and sold, but remain in a safe, insured vault maintained by international bullion dealers.

There are several reasons why large gold bars never leave a secure vault.

The most obvious reason is that large gold bars, like the 100 ounce bars, are extremely valuable. With gold now about $1639 and ounce, a 100 ounce gold bar would be worth $163,900. This is a tempting target for any professional thief. Unless you had an extremely secure safe that is guarded and insured you would be foolish to keep that much gold at home.

Another reason why gold bars are kept in large industrial vaults is that the integrity of the bars is maintained. Unscrupulous people could try to remove some gold and substitute less valuable metals. The bars would need to be assayed each time they were transferred from one owner to another. This is a costly process and a level of trust would need to be developed between all parties involved.

Reputable international gold bullion dealers maintain industrial sized vaults designed for the storage of precious metals. They protect and insure the contents of their vault so each owner can be assured of the integrity of their holdings.

Are You An Investor or a Collector?

If you are expecting the dollar to continue to decline in value, and with it the value of your savings, you need to accumulate some gold and silver. These standards of value can help you maintain your wealth.

If you believe the economy will continue must has it has for your lifetime you may want a portion of your portfolio to be in rare gold coins. If you anticipate economic turmoil during your lifetime, you probably should be an investor who accumulates gold bullion.

In any case, gold bullion is a wise choice for a portion of your investment portfolio.

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