A Closer Look at Investing in Physical Gold and Gold Coins

Investments in gold can take two forms. Physical investment, which is basically purchasing gold in bars, biscuits, coins, or jewelry, or paper investing. Let’s take a closer look at the pros and cons of investing in physical gold, and which forms are the most beneficial to purchase.

Physical gold is gold that you can hold, touch, wear, or even spend. The main concerns when acquiring gold in physical form are what forms to buy it in, and where and how to store it. The physical forms, as previously mentioned, are coins, bars, biscuits, and jewelry. What is the value of investing in physical gold? No matter what happens to your countries, or the world’s, money, gold can always be spent due to it’s intrinsic value, and it’s accepted everywhere around the world. Gold also has huge aesthetic value. Simply put, it’s beautiful. It’s also portable; it’s small, and can be made in to just about any form, such as coins or bars. You are also protected against bank failures. It is generally agreed the best way to invest in physical gold is to purchase gold bullion either as bars or coins.

Gold bars are sometimes recommended because they have lower premiums than gold coins. On the other hand, some recommend gold coins because, while they carry a higher premium, they are easier to sell or resell. Production costs on gold bullion are fixed, and since these costs are factored in to the price of gold, that explains why, at times, premiums may be higher on smaller coins than on larger ones, or on gold bars. Yet surprisingly, they can often be bought for a lower premium, even weight for weight. What is meant by premium? The percentage amount over the value of gold that is traded. A low premium on gold coins doesn’t change the value of the gold in the coins itself. Premiums rise when the demand for gold coins increases. The same gold coin may cost more in one country than another if the demand in that country is higher. This is known as a premium differential and can be a good way to evaluate the worth of investing in gold coins.

Gold Coins

If you are going to invest in physical gold, it is probably best to buy gold coins for several reasons in addition to their resell value. Prices for gold coins are better because they can be competitively priced due to efficient mass production. Collectors may also buy coins if you wish to resell them. It is much easier to sell one hundred thousand dollars worth of gold coins than to try to liquidate one bar of gold worth the same amount. In the case of coins, you can sell as few or as many as you wish, without dealing with all the refining or handling fees that may be incurred with gold bars. Gold coins are more portable, and easier to store at home than heavy bars of gold.

For those who are new to investing, or a small investor, gold coins are a good choice because you can accumulate them in smaller increments. One suggestion, though. You may see gold minted coins advertised for collectors or investors. Check the current spot price of gold which can easily be found online at several places that deal with gold investments. If the premium for the minted gold coins is over ten percent difference of the spot price, it’s not a good deal. Very old or rare coins can be difficult, but not impossible, to verify.

Once you’ve bought your gold, then what? If you are keeping it at home, you need a safe to store it in. A vault is another safe place for gold storage, and it also has the added benefit of protecting the integrity and value of your gold. There are no costs for transporting it because it stays put.

When buying physical gold as security against inflation, poor economy, and protection against currency devaluation, or for what ever reasons you decide you want to own and invest in owning gold, it’s important to keep a few things in mind when purchasing physical gold.


1. Know your seller. If you buy online, buy through a reputable dealer. There are websites that can direct you to good online sites for purchasing physical gold. For those who buy gold locally, again, know your seller.

2. Don’t pay more than 8 percent premium over the spot price – otherwise, you are paying too much.

3. Buy whole coins rather than fractional coins for the best value. The mark-up is higher.

4. Gold is a soft metal – keep it in it’s container and in a safe place with minimal handling so it won’t get dented in any way.

5. If using a bank vault or safe for storing your gold, insure it. Theft can and does occur.

6. Beware of third party storage services. If you are purchasing a large amount of physical gold, or in forms such as bars and are afraid to keep them in case of theft or even forgetting where you’ve placed them, go with a trusted, reputable service. Do your research.

7. Enjoy! You own gold and it’s beautiful. It’s got intrinsic value based on that alone!

If you want to buy gold or silver, just go to GoldSilver.com or Goldmoney.com.