An Introduction to the Gold Coin Market
The gold coin market is comprised of thousands of different coins. Some are highly prized by collectors while others have a stronger investment demand. Below we’ll briefly explore each niche of the gold coin market, and we’ll discuss how you can get in on the action.
Gold Bullion Coins
Gold bullion coins usually have either a 22 or 24-karat purity. A “one ounce” coin of each variety contains the same amount of gold as the other; the difference lies in the amount of filler metals like silver or copper. Gold bullion coins are sold in weights ranging from one ounce to 1/20 of an ounce, and they usually cost slightly more (2-7%) more than the current gold spot price per ounce. Popular gold bullion coins include the American Eagle, the Canadian Maple Leaf, and the South African Krugerrand. Bullion coins are purchased for investment purposes or when a collector sees potential numismatic value (more on that word in a moment).
Rare Gold Coins
Rare gold coins are called numismatics. They might be rare because the surviving population is low or because the coins in question weren’t minted for very long. Shipwreck gold coins and “mint error” gold coins are also common examples of rare gold coins. Collectors and historians are the biggest buyers and sellers of rare gold coins, although some adventurous investors try their luck at this aspect of the gold coin market.
Investment-Grade Gold Coins
While bullion coins are considered “investment-grade,” there are also other gold coins that have some numismatic appeal, but not so much that it affects their ability to trend with the gold spot price. Coins like Mint State, 1908 St. Gaudens gold coins are often considered “investment-grade rarities” because they are rare but they can also function as investments.
How does the gold coin market work?
Gold bullion coin prices fluctuate with the live spot gold price. Prices for rarer coins might rise and fall with the gold spot price to some degree, or they might fluctuate based solely on rarity and demand instead of commodity prices. You can buy gold coins at coin shows, pawn shops, flea markets and other local establishments, although serious investors usually opt to work with one of the many trusted companies in the gold coin market.
The sheer size of the gold coin market make it impossible to explain every aspect of this market while maintaining brevity, and many parts of the gold coin market require dedicated articles (e.g. gold coin grading, counterfeit gold coins, non-confiscatable gold coins, etc.). We hope that this brief tutorial has provided you with some insight into the gold coin market and sparked your interest in learning more about this unique usage category for the yellow metal.