Investing in Gold, go for Gold Coins

Wikipedia defines a gold coin as a coin made mostly or entirely of gold. Gold has been used for coins practically since the invention of coinage, originally because of gold’s intrinsic value. In modern times, most gold coins are intended either to be sold to collectors, or to be used as bullion coins — coins whose nominal value is irrelevant and which serve primarily as a method of investing in gold.

Global Gold Demand : Current Scenario

International Monetary Fund (IMF) announced on its website that India has bought 200 tonnes of gold from a total of 403.3 tonnes that they had planned to sell. This transaction was completed during the period of October 19th – 30th 2009 with daily purchases at the prevailing market prices.

This potential sale of gold by the IMF was one of the lingering threats for gold prices. Now we have real takers for the IMF gold. India moved swiftly and bought 50% of the gold while China and Russia are considered more likely to grab the remaining IMF gold which is up for sale.

The point to note is that not only has the Reserve Bank of India (RBI) purchased gold – but it has done so at a price that was not at a discount to the spot prices. The message: the RBI is diversifying – it is moving some of its money from US dollar paper notes to gold.

Impact on Gold Prices

This will certainly lift the sentiments amongst those that believe in gold as the ultimate form of currency. The good news is that you don’t need to be a central banker to buy gold bullion. Essentially, there are three broad categories of gold investors:

  1. Those who wish to hedge uncertainty and possible financial disaster
  2. Those who wish to simply make a profit.
  3. Those who wish to gift/consume gold in form of jewelries
  4. Those who wish to combine more than one of the above

Your objectives will determine what you include in your portfolio. Once you have a handle on why you are buying gold, deciding what to buy becomes a relatively easy process.

Indian Gold Investor

Traditionally, Indians are more skewed towards consumption of Gold in form of jewelries. If you too belong to this category of retail gold investors,  it may be a good idea as you can wear these jewelery on festive occasions, but purely from investment point of view it is not! Why?

Well the reason is pretty simple, when you liquidate your gold jewelries you loose out on the making charges and also on the wastage due to remolding. The buyer will be interested only in the net amount and purity of the Gold, ignoring the aesthetics of your jewelries.

If you are looking to purchase gold bullion to diversify your portfolio, it makes more sense to buy gold coin instead.

How to go about buying Gold Coins?

Internationally, many specialist precious metal asset managers, such as Aurum Advisors (through their site, help individuals, families, and institutional investors interested in preserving wealth and adding growth to their existing portfolio. They assist investors that have made the decision to buy bullion in the most appropriate manner possible :

  • From getting you into precious metals at the right time,
  • To getting you into the right coins or bars,
  • To keeping you updated on the market conditions that may impact your precious metal’s portfolios overall value,
  • To assisting you with your exit strategy

10 thoughts on “Investing in Gold, go for Gold Coins”

  1. yeah, Gold is still have trust of investor to invest. The gold maket has mostly been high as compared to others and even if fluctuations occur I don’t think it ll be very significant.Thanks for the great reading, we buy gold in a recession. I will pass this on to our ira clients to read

  2. Thanks for the information, we will add this story to our blog, as we have a audience in the

    gold sectors that loves reading like this Gold

    • Thanks Karan!

      Yes, Gold ETFs are good investment avenues for people who like to invest in gold but do not want physical possession of Gold. We will do a detailed article on pros and cons of investing in Gold ETFs. Thanks for the suggestion!

  3. One of the best ways to invest in gold is through funding your IRA account with it ,or better yet rolling over part of your 401k to gold and precious metals,these assets when put together in a retirement account are held under a tax deferred status and benefit the owner over the long term.But investors should make sure to find the best gold ira companies if they want to trust their money.

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