Certified Gold Coins vs Gold Bullion Posted by James Randolph on January 04, 2010
When investing in gold, there are a number of practical considerations. One is the choice of certified gold coins vs. gold bullion. Certified gold coins commonly out perform gold bullion over the years. Therefore, why don’t investors always buy certified gold coins vs. gold bullion?
Certified gold coins are rare. In the United States, there were two instances where gold coins were melted down for bullion. The first was over several years in the early 19th century when the price of gold went up and the bullion in a Gold Eagle was worth more than the face value of the coin. The second was when the United States government confiscated gold in 1933 and melted most of the coins. In each case, the removal of large numbers of coins from circulation made the remaining coins rare.
Rare coins are more valuable than the bullion they contain and more expensive. Depending upon just how rare, they may be harder to find. For the gold investor working on a strict budget, it may be wise to start with small denomination gold bullion coins, such as a ½ ounce or one ounce American Eagle. To the extent that a gold investor wants to keep a reserve of gold against the risk of severe economic chaos, small denomination gold bullion would be more “spendable” in a truly chaotic economic environment.
Remembering the confiscation of 1933, deciding between certified gold coins vs. gold bullion may well be rare coins as the safest means of gold investment if the government decides to confiscate personally held gold again. In 1933, rare coins, which are what constitutes today’s certified gold coins, were spared. Legal precedent may well stand on the side of certified gold coins if the government again comes for people’s gold again.
Senior Staff Writer – Certified Gold Exchange