Smart Investors Choose Silver and Gold Coins
The precious metals market has gotten a lot of attention over the last few decades. Record increases in the value of both silver and gold have made precious metals an important part of any investment portfolio. However, when buying silver and gold coins it is important to remember that there are two different ways to value coins: numismatic or bullion.
Types of Investment
The two different ways of valuing coins impacts the type of investment.
- Bullion – The value of the raw materials used to mint gold and silver coins is the bullion value. The price is figured solely by the currently traded value of a like amount of the metal.
- Numismatic Value – Coins, even those made from precious metals, can have collectible value significantly in excess of their value in raw material. Rare coins or coins in particularly good condition may be worth much more than their metal content would indicate.
Both types of investment are well regarded in the current economy. Gold and silver prices are increasing fairly steadily with only occasional drops in the price. Gold recently reached an all time high of over $1,000 per ounce. Silver is currently trading at approximately $30 per ounce. The United States minted coins with 90% silver content up until 1964. These coins are in general circulation; although, collectors and prospectors have thinned out the numbers considerably.
Rare coins and coins in unusually good condition also have value as collector’s pieces. The numismatic value can range from as little as 10% over bullion value to many times the value of the raw metal. American coins are not the only currency that has minted coins in precious metals. Historically, gold and silver were the basis for currencies world wide.
Antique and Sunken Treasure Coins
While the romance of a sunken treasure may encourage you to spend more on a group of irregularly shaped gold coins, this market is truly for the experts. It is all too easy to wind up vastly over-paying for supposedly “antique” coins. Sure, the coins may meet the definition of antique, over 100 years old, but that may or may not significantly affect the value of the coin.
Best Bets for Gold and Silver Coin Investments
Always buy Professional Coin Grading Service (PCGS) or Numismatic Guaranty Corporation (NGC) slabbed coins for best resale value. Some solid investment options are the St. Gaudens or the Liberty for gold coins, and the two different types of silver coins are: Morgan and Peace dollars. The grading system runs up to MS 70, but that is almost unheard of for these coins. Purchasing common date coins graded MS 64 is a solid investment for the future. Of course, you should always buy the best coin that you can afford when investing for numismatic value, but either way gold and silver coins are a solid long-term investment.