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What Are The Pros and Cons of Using Gold Coins As An Investment?

What are the pros and cons of using gold coins as an investment? Gold is a trending investment choice, and with their ever-increasing demand in the market, it is safe to say that they are here to stay. For centuries, having gold has been considered a sign of wealth, and gold in every form, whether coins or bullion, has benefited humans financially. If you are new to hopping on the ever-green trend, it is never too late, but before you decide on investing, it is essential to have all your facts clear because you know no research regarding investing money enough. In this article, we will discuss gold coins and the pros and cons of investing in them.

An Introduction Of Gold Coins 

Gold coins are a form of gold investment that is different from gold bars regarding the type of investment. Gold coins usually have higher premiums, and they are insured and stored in another way. Before you invest in gold, it is essential to understand the difference between the two to make informed decisions regarding your money. 

People produce gold coins in different parts of the world, and each country has a specific type of gold coin with varying values. For example, in the US and Canada, you will find Maple Leaf coins and Eagles, while in South Africa, you will get Krugerrand coins. Similarly, in the UK, they have the gold sovereign, half-sovereign, and gold Britannia.

What Are The Pros and Cons of Using Gold Coins As An Investment 1

These gold coins could be of varying qualities, ranging from 22 carats to 24-carat gold. If we talk about investing, it is also essential to be clear about rare collectibles and bullion coins. 

Rare collectibles or rare coins are technically called numismatic, and they are valued based on the year they were minted in, their location, and their rarity. They are more like art collectibles that we can sell at a much higher rate than purchased.

Bullion gold coins, on the other hand, are sold at their current market price. They are generally used for investment purposes.

Now that you are clear on the fundamentals, let’s look at the pros and cons of using gold coins for investment:


#1. No Capital Gains Tax

However, this pro is only limited to British gold coins. If you are going with British gold coins that fall under “British legal currency,” you can make unlimited profits from the gold coins. Investors looking for large quantities of gold can benefit highly from this.

#2. Flexibility

Gold coins are sold at much smaller units that can be as less as 1 ounce, whereas gold bars are only sold in larger quantities such as 10 grams, 100 grams, 1 kg, and so on. Doing this lets you store smaller quantities of gold, and you can also start investing much sooner with a lesser amount.


#1. Liquidity

Gold coins do not offer any liquidity to the investors. If you want to buy something, you can not use gold coins as your mode of payment. If you need cash, you will have to find a buyer and sell your gold coins to access your money. And even in that case, you are likely to get less money because of the higher premium.

#2. Higher Premiums

Higher premiums are the main disadvantage of investing in gold coins. Premiums are the add-on fees of gold coins that are usually higher than its other forms. Why? Because gold coins require more resources and time to be stored and manufactured than gold bars. As people make them in smaller quantities, they need more help, so the smaller you go in gold investment, the higher the premium you are likely to pay.

#3. More Complex

Gold coins are much more complicated to store and insure. When you buy gold with Canadian, you’ll find that it offers great deals and ensure the gold coins on your behalf. And storing them at home is just not safe anymore. 

Read more: Ways to Save Money – Tools to Help You Budget and be Organized!

Final Words

Thank you for staying this length of the article! I hope that my writing has introduced you to gold coins. However, this post should not be considered as investment advice. I am writing to inform finance knowledge to my beloved readers. Please leave a comment below if you have any questions! I hope to see you around soon!

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