The Difference between Gold Bullion Coins and Numismatic Gold Coins
As a gold investor, you might be interested in including some gold coins in your portfolio. However, SOME gold coins are a better investment than OTHERS. That is why I’m going to explain the difference between gold bullion coins and numismatic gold coins.
What Are Gold Bullion Coins?
A bullion coin is struck from gold, silver, platinum, or palladium. We will be focusing on gold bullion coins in this post. Although some carry a face value of legal tender (currency), they are now usually minted as an investment or for collectors rather than to be used in day-to-day commerce as they were up until the early 20th century.
Its real value, however, is its troy weight and what the current gold market value is, which has nothing to do with its face value. Gold bullion coins come in several sizes and weights. We’ll discuss this in detail in the next post, where I will list the most popular gold bullion coins worldwide.
The advantage of owning gold bullion coins is that you can see them, hold them, store them, and they are easy to sell. The price that gold bullion coins are bought and sold for changes from hour-to-hour and day-to-day based on the gold spot price fluctuations. It’s like dealing with a moving target!
What Are Numismatic Gold Coins?
According to the Merriam-Webster Online Dictionary, numismatics is “the study or collection of coins, tokens, and paper money, and sometimes related objects such as medals.” Therefore many people assume that numismatic gold coins simply refers to ALL gold coins. Not so!
Numismatic coins are usually rare and are no longer being minted. They are collected for their age, scarcity, individual beauty, uniqueness, or historical significance. Their value is not based on the amount of gold or silver they contain.
A bullion coin can eventually build in numismatic value over time if a mint stops producing it and it becomes difficult to find, or if it becomes a part of an historic event.
Numismatic gold coins are often very expensive in relation to their intrinsic gold value. Also, the market for numismatic coins is not nearly as liquid as for regular bullion coins.
If you enjoy the historical or artistic value of numismatic coins, collecting them might make you some money if you do your research and aren’t in a hurry to turn a profit. But if you’re looking for an investment hedge against inflation or a declining economy, buying bullion gold coins is the better choice.
Having said that, in July 2002, a very rare Twenty Dollar ($20) 1933 Double Eagle gold coin sold for a record $7,590,020 at Sotheby’s, making it the most valuable coin ever sold to date. So you never can tell!
In the next post, I’m going to introduce you to the major gold bullion coins worldwide.