Paper Gold vs. the Gold Coin Market

The gold coin market has often taken criticism from some who say that buying gold coins is a waste of money, and sometimes that accusation is true. Lots of companies push coins that have little or no investment value, and the individuals who buy those coins have almost no chance of ever seeing a profitable return.

Coins like Swiss Francs, French Roosters and British Sovereigns usually require a lot of time or a massive jump in the value of gold before they can be sold for profit because the companies that sell such obscure, fractional-weight, hard to price-check coins usually do so with a hefty premium and/or commission attached.

Horror stories told by owners of such gold coins have motivated some investors to stick with paper gold investments. Some individuals may benefit from buying paper gold as opposed to gold coins, especially if the goal is a fast turnaround, not long-term security or ownership of an asset that tracks the gold spot price.

Paper gold investments often go astray from gold’s true value, either because of revealing audits on ETF holdings, strikes by mining companies’ workers, and so on. Gold bullion coins may cost a little more than spot (usually 2-5 percent) but they offer the investor ownership of a hard asset that can be used to get out of very, very tight spots, such as national financial emergencies or dire personal situations.

Certified gold coins often outperform the gold spot price over long periods of time, and many certified coins are completely hidden from the government’s prying eyes and greedy hands. One would be hard-pressed to find a paper gold investment that can meet any of these requisites.

The bottom line is this: not all gold coins are created equal, and neither are all “gold” investments. Do a little research (a good place to start is with the official tutorial available below) and find a reputable company that will give you the facts without thinking about its own bottom line.

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