How & Where to Buy Gold Coins [2024 Buying Guide]
Team GoldSilver
FEB 13, 2024
There’s nothing quite like holding a gold coin in your hand. And owning some real gold offers a number of advantages you simply can’t get with other investments. And since gold is a natural hedge against the stock market, it’s an excellent way to diversify, too.
This article will cover the basic do’s and don’ts of buying gold coins, including the advantages of owning them, the best gold coins to buy, the best places to buy (including if you should buy online or on eBay), and how to avoid getting ripped off. With a few simple guidelines you’ll be on your way to owning one of mankind’s longest-living assets.
This guide to investing in gold coins will seek to answer some of the common questions we hear including:
- Why buy gold coins?
- How & where to buy?
- Which gold coins should you buy?
- Should you invest in numismatic gold coins?
- What are the most popular gold coins?
- Can you purchase gold coins from a bank?
- What’s the best place to buy? Can you trust online dealers?
Let’s start with something about gold coins that many investors aren’t aware of…
The Many Reasons for Buying Gold Coins
Gold offers benefits far beyond the fact that its price can rise.
Considerable all the advantages you gain by buying gold coins. Gold is…
• A tangible asset. You can hold $50,000 of gold coins in your hand, which you can’t do with most any other investment. It can’t be destroyed by fire, water, or even time. And unlike other commodities, gold coins don’t need feeding, fertilizer, or maintenance.
• Free of counterparty risk. Gold coins require no paper contract to be made whole. Gold is the only financial asset that is not simultaneously some other entity’s liability. It doesn't require the backing of any bank or government.
• Highly liquid. Gold coins can be sold virtually anywhere in the world. There are gold dealers in just about every major city on the planet. And in a crisis, gold will be in high demand. Other collectibles, like artwork, take longer to sell, have a smaller customer base, and will likely entail a big commission.
• Value dense. You can hold $50,000 in gold coins in the palm of your hand. Gold coins take up such little space that you can store more value of them in a safe deposit box than stacks of dollar bills.
• Private and confidential. How many assets can you say that about in today’s world? You must pay taxes on any gain, of course, but if you want a little privacy or confidentiality, just buy some gold coins!
• Portable. You can take gold coins with you wherever you go in the world.
• A store of value. The gold price fluctuates, of course but its value is timeless. Consider that gold retains its purchasing power over long periods of time, while the US dollar, for example, has lost 98% of its purchasing power since the creation of the Federal Reserve in 1913. And since gold will outlast you, it is an ideal asset to pass on to your heirs.
By the way, it’s a faulty argument that gold doesn’t produce any income. That’s not gold’s role in your investment portfolio. Its function is as money and a store of value, similar to a currency. That’s also why it shouldn’t be viewed as a commodity; it doesn’t get used up, like oil or corn. In other words, gold is money!
• Can’t be hacked or erased. It’s probably not a good idea to keep all your wealth in digital form today. That’s easy to do if you own some gold coins.
• Requires no specialized knowledge. If you don’t know how to spot a real diamond, aren’t familiar with the painter Van Gogh, or don’t collect comic books, just buy some gold bullion. No special skills or training needed.
• Comes with low maintenance and carrying costs. Even if you pay for storage, compare that to the costs and taxes and headaches of, say, real estate. You don’t even need a stock broker to buy and sell gold coins.
The Best Gold Coins to Buy
There are a lot of gold coins on the market. But they all fall into two basic categories: standard bullion coins, or numismatic (rare) coins.
Bullion coins simply refer to gold coins that are made almost exclusively from precious metal, in this case gold. Their attraction is that they consist of highly refined gold and are viewed primarily as an investment. Some bullion coins have an alloy to make the coin more durable, since gold is a “soft” metal. Bullion coins are not regarded as a “collector” coin, which is a different class of coin (though all gold is taxed as a collectible).
You can buy bullion coins from a number of government mints that produce them each year. These are generally referred to as “sovereign” coins, meaning they are manufactured (and in most cases guaranteed) by that government. They also come with a face value (except the South African Krugerrand). These face values are mostly symbolic at this point, since the gold content of the coin makes them worth a lot more than the value printed on the coin. But each government guarantees they will always be worth the amount stated.
Private mints also make gold coins, called “rounds.” While usually of good quality, they don’t come with a face value or the same government backing. This makes them less attractive than sovereign gold coins, and thus the popularity of gold rounds is limited not high (this is not the case for silver rounds).
Numismatic coins refers to rare coins, ones that are bought and sold by collectors. Unlike bullion coins, their value isn’t based on the gold content, but rather on their rarity and condition. Their premiums (or mark-ups) are usually much higher than bullion coins, and can stretch into the thousands of dollars (and in some cases, millions!).
The best rule of thumb on whether to buy numismatic coins is this:
• Unless you plan to become a coin collector, avoid numismatics and their higher premiums.
The reason is simple: if you don’t know what you’re doing, it’s easy to pay a whole lot more than you should. Some dealers will try to convince you to buy them, claiming they’ll someday be worth more or would be exempt in a confiscation. These things may or may not come to pass, so these arguments are really just sales tactics. The bigger reason they want to talk you out of bullion coins and into rare coins is because they make a lot more money on them! Sales commissions are much higher on numismatics, which of course you pay for. My advice is don’t get talked into rare coins (or if you’d like to collect historic coins, get educated first).
Proof coins are another form of numismatics. These are high relief coins and are very eye-appealing, but also come with high markups. Again, these are geared for collectors, and unless that’s what you want to be, you don’t need to buy these when you invest in gold.
“Semi-numismatic” coins is another term you might hear. This is more of a marketing term than anything else, and basically refers to gold coins (and more frequently silver coins) that are made to be collector coins but don’t yet have the historical significance of a true numismatic. They may or may not be worth more someday, but should not be viewed as a replacement for bullion. They are still part of the collector’s world, and as such you will pay more for them than standard bullion.
Because coin collecting is a different animal, there are many coin dealers that don’t sell numismatic coins at all (including GoldSilver). They don’t offer collector coins because, well, they’re not collectors, and also because they just don’t feel comfortable selling over-priced products to investors when all most investors need is bullion.
By the way, you’ll sometimes see a coin marked “BU.” This stands for “Brilliant Uncirculated.” It just means it’s a brand new coin, never before sold. If you’re buying the current year coin, it will be BU. Past years can be BU, too, if they were never sold. These older-dated gold coins are usually referred to as “common date” coins, or listed on a website as “year of our choice.” Again these are fine if they’re BU. If a coin is not BU, you might as well look for one that is, since they’re plentiful. All of our gold coins here at GoldSilver.com are BU. |
There’s one more element that will help us identify the best gold coins to buy—and that’s being prepared to sell…
As an investor, you want to buy something that won’t just rise in value, but that will also be easy to sell. That’s generally easy to do in the stock market, as most stocks are highly liquid. But you’ve probably heard that some stocks have very low volume, which can make them tricky to sell. The same thing is true with gold coins: you want a class of coins that will be easy to sell. You want to avoid a product that could experience a delay when it’s sold, or cost you more than you expected, or won’t have a lot of buyers.
And those are exactly the concerns with rare coins. You could experience delays when you attempt to sell them—the dealer or buyer might want to confirm its value or authenticity, for example. Or they may offer you less premium than you paid. Or they may not want to buy it at all. On top of this, you have a much smaller pool of interested customers, as many investors are not coin collectors.
Sovereign coins, on the other hand, are easily recognizable literally the world over, can always be sold for the price of gold, and will have plenty of customers.
Add it all up and…
• All investors should start by buying sovereign gold coins.
Government (sovereign) coins are the most widely known around the world and thus will be the easiest to sell. Even if you don’t sell them but pass them on to your heirs, they will need something that’s easy to sell.
So the golden rule when buying gold coins is this: buy the most common or popular items, so that you have high liquidity when the time to sell comes.
Here’s a summary table of the differences between bullion coins and collector coins:
It’s easy to see that the average gold investor should stick to, or at least start with, common bullion coins.
Now that we know we should buy sovereign coins, what exactly do we start with?
The Most Popular Gold Coins
The most popular sovereign gold coins in the world are the following six. Some are 22-karat and most are 24-karat, but they all contain a full ounce of gold. You’ll see their content (gold) and purity (as stated on the coin) are guaranteed by a government, and other than the Krugerrand, are all legal tender in the country of issue. They’re also all eligible to put in your IRA…
One Ounce American Gold Eagle
Purity .9167 (22-karat)
$50 face value
Backed by: United States government
Can also be bought in half, quarter, and tenth-ounce denominations
Special Note: Most popular gold coin in the world
One Ounce Canadian Maple Leaf
Purity .9999 ; $50 Canadian face value
Backed by: Commonwealth of Canada
Can also be bought in half, quarter, tenth, and twentieth-ounce denominations
Special Note: Royal Canadian Mint’s advanced security measures make this the most secure gold coin in the world.
One Ounce Austrian Philharmonic
Purity .9999
Backed by: Republic of Austria
Can also be bought in half, quarter, tenth, and twentieth-fifth-ounce denominations
Special Note: Widest coin currently made; until 2001, was the world’s top selling gold coin
One Ounce Australian Kangaroo
Purity .9999
$100 Australian face value
Backed by: Australian government
Can also be bought in half, quarter, and tenth-ounce denominations
Special Note: The Perth Mint produces a new depiction of the Kangaroo every year
One Ounce South African Gold Krugerrand
Purity .9167 (22-karat)
No face value
Backed by: Government of South Africa
Can also be bought in half, quarter, and tenth-ounce denominations
Special Note: Oldest circulating bullion coin in modern history
One Ounce American Gold Buffalo
Purity .9999
$50 face value
Backed by: United States government
Special Note: The newest sovereign coin, first manufactured in 2006; greater purity than the Eagle.
If you want to own pure gold, coins are a good place to start. You’ll have beautiful coins, backed by a sovereign government, which can easily be sold when the need arises.
I recommend buying one-ounce denominations, because the premiums are higher on fractional coins. But if you can’t afford a full ounce, some gold is certainly better than no gold.
This isn’t to say that you should never buy other coins. The point is that every investor should have a meaningful stack of these before buying anything else. These gold coins are your gold safety net, you and your family’s monetary insurance hedge that can easily be sold if the need arises.
Now that we know what to buy, let’s find out where to shop…
The Best Places to Buy Gold Coins
Most gold coins are bought in one of two places: at a local coin shop, or online. (There are a few other places, too, which we’ll address below.)
Believe it or not, you’ll likely find better pricing online than at a coin shop, even after factoring in shipping costs. That’s because the overhead at a brick-and-mortar store is higher. But that’s just part of the difference between them.
Here’s the pros and cons of your two basic options…
Local Coin Dealer
Even if you decide to buy online, I recommend checking with a local dealer, because a relationship with them can be helpful if you need to make a quick sale. If you decide to buy from them, see if they’ll negotiate on price.
Where to find a local dealer…
The easiest starting point is to use this US Mint dealer locator.
You can also Google “coin dealer” and your city or county. Adding the word “gold” may not help, as some dealers like to keep a low profile.
If you’re in Asia or Europe, check to see if your bank sells gold coins.
Online Dealers
Buying from an online seller comes with one obvious risk: you gotta pay upfront, and then trust that the dealer delivers what you purchased. But this isn’t normally an issue with a well-established online dealer—the last thing they want is for word to get around that they ripped someone off.
And as I said, one advantage to an online dealer is that they can frequently be cheaper than a local store, even after shipping and insurance costs.
When choosing an online dealer, look to see product prices displayed on the site, along with shipping and insurance charges (you may have to search for these fees). A dealer that doesn’t show prices isn’t necessarily bad, but sometimes that means they want you to call so they have the chance to sell you as much as possible. As a result, give greater weight to transparent dealers.
Last, look for a delivery time frame before you place an order.
Here are the pros and cons of buying from an online dealer:
Choosing the Best Dealer, Online or Local
A good way to start is to compare prices of the same product among a few dealers.
Getting a low premium is good, of course, but price isn’t the only consideration. Here’s a few other important questions to ask:
• Do they offer multiple forms of payment? Bank wire, credit card, cash, personal checks, money orders/cashier’s checks, and PayPal are being increasingly offered in the gold industry. And you want as many options as possible for not just current orders but future ones, too.
• What are total costs, including commission, shipping, insurance, and credit card or bank wire charges?
• How big is the company? You want a dealer that has strong volumes, because they will have greater flexibility, bigger selection, and be more equipped to fill a large buy or sell order.
• Is the dealer pushy, or educational? Do you feel comfortable with them?
• Will the dealer send you a lot of marketing materials after your purchase? You may want these to learn about special offers, but you don’t want to get bombarded or your name be sold.
• Do they offer a buyback policy? If they’re not willing to buy back what you purchase today, that’s a strike against them. We obviously want a dealer that will still be in business years from now when you’re ready to sell.
• What is the return policy if you receive the wrong product? Keep in mind, however, that you can’t return a correctly filled order due to “buyer remorse.”
There are a few other places you’ll see gold coins for sale, including…
TV Dealers
It’s hard to watch cable television and not see an ad from one of these dealers. But I avoid them because:
• They’re almost always more expensive. Many of them pay huge advertising and/or celebrity endorsement fees.
• They usually have minimums, which may be greater than you want to buy. Or they may make it very expensive to purchase a small lot.
• They usually try to talk you into buying numismatic coins, or more product than you want.
• They offer quirky and expensive payment plans, such as the “layaway plan” that charges interest until you pay in full.
You can avoid most of these tactics by not calling them in the first place.
eBay
I have friends that prefer buying their gold coins on eBay. It’s convenient, and shipping is usually free. The risk is that your trust quotient is forced way up, since you’re usually buying from a private party (some dealers post products on eBay).
Since many eBay buyers are investors who know exactly what they want and know a good deal when they see it, I recommend you don’t start with eBay until you get more experience and knowledge about gold coins. It’s not likely that a private party will beat an online dealer by much anyway, since premiums on gold bullion coins are generally low.
Coin Shows
Most coin shows focus on collectible coins, not bullion. I’ve been to many shows over the years and frequently can’t find a one-ounce gold Eagle (the most common coin in the world)! You also have to travel to the show, which takes time and expense.
Buying at a coin show is not for the novice and not an ideal way to buy bullion.
Can I Buy Coins From My Bank?
Depends where you live. If you’re in Europe or Asia, check with your bank. Some banks offer gold products to retail customers. I know several people that have done this very thing in Switzerland, for example.
To find out if a bank offers gold coins for sale, just give them a call (it may or may not be well-advertised on their website, for security reasons). One caution: make sure you compare premiums, so that you’re not being overcharged. Also, inquire if they offer lower rates to existing customers.
If you live in the US, it is a common misconception that you can buy gold at a bank. Many people expect a bank to issue gold, harkening back to times of old, but today most physical gold is purchased from non-bank distributors. Even the US Mint requires retail customers go through an “authorized purchaser” (unless you want a proof product).
Don’t Get Ripped Off!
The #1 way to avoid getting ripped off when buying gold coins is to shop at a highly reputable dealer. They will sell only quality product that comes from an authorized distributor of the government mint.
And the way to find a reputable dealer is to follow the checklist above. Your basic goal the first time through is to do enough of your own due diligence so that you have a place to return the next time you’re ready to buy. So…
Check a company’s reputation and complaints at the Better Business Bureau or Trustpilot. Check the peer reviews. Here is GoldSilver's TrustPilot rating:
Understand all your costs upfront—commissions, shipping, insurance, and any extra charges for credit cards, bank wire transfers, etc.
Look for those that have a guaranteed buyback policy. You’re looking for a dealer who’s not just willing to repurchase what they sell you, but one that is likely to remain in business. You could ask what their “buy” prices are now on the product you’re thinking of purchasing to gauge how fair their future prices may be.
Whatever you do, buy! You’ll love the weight of real gold in your hand, and will possess a real asset that can last generations and protect your portfolio against whatever the economy and markets may throw at you.