Are you interested in knowing how to invest in gold and silver coins? Gold and silver have for a long time been viewed as very valuable metals and have remained a highly-coveted commodity for a long time. Even in the present times, precious metals still have their place in savvy investors’ portfolios, where they are held for different reasons. Many of those who are interested in investing in these precious metals usually have a hard time figuring out how to get started.
Most of them ask questions such as: Which precious metal however is best for investment purposes? How can you invest in each type of precious metal to gain maximum benefits? Is investing in precious metal coins a good idea? Such are some of the questions that you may also find yourself asking if you are new to precious metal investments, and that’s exactly what we shall be answering in today’s article. Read on to find out more about what you need to do to get started with investing in gold and silver coins.
Is it worth it investing in gold and silver?
The occurrence of the pandemic has proven to us all that we cannot predict the future. One day we are doing fine, and the economy is seemingly thriving, then the next we are all struggling to get by.
The loss of jobs, tense political climate, fast-rising inflation rates, and declining value of the dollar are some of the main issues that we are dealing with at the start of this decade. Not to mention that government control and other global warming-related changes have contributed to more severe potential threats such as the looming global food crisis.
Every waking day, we are facing new threats that every investor needs to preplan for. Only those who have a sound financial plan will get through the trying times. A sound financial plan is one that takes into account the potential of unforeseeable events.
As we have already seen from the economic downturns that have happened on a global scope, a significant portion of one’s retirement savings can be wiped out by a single adverse event.
I cannot emphasize enough how important it is to have assets that shield your retirement savings from sinking under the waves of negative market forces such as inflation. If you already own a retirement investment portfolio that is based on paper assets (stocks, ETFs and mutual funds, bonds, etc), then you are treading on dangerous grounds as the report below will reveal to you:
If it is a question of whether it is worth it investing in gold, then I can tell you that you will agree with me that you do need to include gold in your retirement investment portfolio after reading the above report.
Could be you are clueless about what investing in gold and silver coins entails. Well, you are in the right place today, since I will describe to you what investing in these two precious metals entails.
Gold/ The Shiny Metal – The Secret Behind Why Investors Love This Precious Metal
Gold is viewed as a unique precious metal due to its durability (in the way it doesn’t rust or corrode) its malleability, as well as its ability to conduct heat and electricity effectively. All these characteristics give its intrinsic value, making it a prized possession.
It also has some applications in industries such as dentistry and electronics, though most people know it principally as a base for jewelry, as well as a form of exchange.
To determine the value of gold, a close follow-up is done now on the market trends 24 hours a day, seven days a week.
Generally, gold trades predominantly as a function of sentiment- this means that the price of gold is not heavily affected by the laws of supply and demand since any new supply of gold from the mines is significantly outweighed by the amount of gold that is held above ground. Simply put, whenever hoarders feel like selling gold, then its price drops in the market. When more people decide to buy gold, then its prices begin to rise.
In the recent past, more people have exhibited the desire to hoard this shiny metal, owing to a couple of distinct factors, which include:
1. Concerns with the current financial system
The state of banks and other financial institutions goes a long way in setting the mood for the global economy. Unstable economies coupled with political tension make investors seek a safe haven, and gold happens to be a safe store of value that has proven to be dependable over the last several decades.
When the real rates of paper assets and other markets are negative, investors often flock to gold, since it has proven that it is an asset that can maintain its value more so during the worst economic times.
3. Political crisis
The last decade has seen the rise of political crises, and this has, in turn, sent many people into gold-hoarding mode. Instead of hiding behind paper currency which loses its value very fast during such crises, one can hold their savings in the form of gold. One’s lifetime savings can be held in the form of portable gold and can be traded for other commodities, or a passage to the less dangerous destinations.
Silver / Gold on Steroids – Why Is It Still a Viable Investment Asset?
The price of silver, unlike that of gold, oscillates between its role as a store of value and its role as a metal that is used for varying industrial purposes. This makes its price fluctuations more volatile than those of gold.
This means that while silver is traded in line with gold on most occasions (and is also viewed as an item to be hoarded), its industrial demand/supply equation for this precious metal has a strong influence on the state of its price. This equation has in fact fluctuated with the creation of new innovations which include:
- The use of silver in the photographic industry – for a long-time, the photographic industry relied on silver-based films, which have since then been overshadowed by digital cameras. During this period, the demand for silver was steady.
- The rise of the middle class in emerging economies in the East- the rise of such economies tremendously affected the demand for appliances and other products made from silver. Silver was perceived as a perfect raw material for the manufacture of such items, owing to its desirable properties.
- The use of silver in the electrical and electronics industry – silver has for several decades found its use in the manufacture of batteries, superconductors, and microcircuits.
It is still not very clear to what extent the demand for silver for use in the above applications affects its demand, but we do know that unless another metal is discovered, silver will remain useful in many industries across the world, for many years to come.
As you purchase silver, therefore, you have to remember that its price is not only affected by its role as a store of value, but also by its various applications.
Investing in gold coins – The Best Gold Coins To Choose From
Today, as a gold investor, you can either purchase coins or bars. Whereas the two are viable investments, you might want to consider the fact that coins offer more liquidity than bars. You, therefore, have to make this consideration prior to making the purchase, to avoid ending up with several bars that you cannot dispose of off when the need for money arises.
Gold bars are more expensive, with some costing several hundreds of thousands of dollars, and not many people in the present-day world will give up such an amount of money at once, just to purchase gold and to watch it sit in an approved depository.
With coins, however, you can get a buyer faster, and even get a dealer to sell you and ship you more whenever you need them. Below are some common Gold coins you can find in today’s market:
- The US American Eagle
- The South American Kruggerand
- Austrian Philharmonic
- Chinese panda
- American Buffalo
- British Britannia
- Canadian Maple Leaf
- Gold Australian Kangaroo
As a beginner, I would recommend that you get started with purchasing gold coins, then you can progress to the more expensive gold bars as you gain experience on how things work in this industry.
Investing in silver coins – The Best Silver Coins To Consider
Investors who cannot afford to purchase gold coins can turn to silver coins since they’re more affordable and available. If you want to get started with silver coin investments, here are the top 10 options you can inquire about from your precious metal dealer:
- Silver American Eagle
- Chinese Silver panda
- Canadian Maple Leaf
- British Britannia
- Silver Mexican Libertads
- Silver Somalian Elephants
- Morgan Silver Dollars
- Silver Austrian Philharmonic
- 90% “Junk” Silver Dimes
- Silver Australian Kangaroo
As you can see, most silver coins have names that are almost similar to gold coins. Some investors pair up their gold and silver coin investments, for instance by purchasing the Silver Canadian Maple Leaf, and the Gold Canadian Maple Leaf.
The Must-know steps on How to invest in gold and silver coins (even as a beginner)
For many years, prudent investors have known that if they want to invest in precious metals, that the best way they can do that is through the direct ownership of physical metals. The one challenge you will encounter, however, as you are trying to invest in gold and silver as a beginner, is determining the specific coins you will buy.
I have already listed out the most common gold and silver coins above, but you might want to consider speaking to an investment expert in a company that deals with gold and silver investments, to determine the best choice for you.
That said, however, you can still get started on the right foot by getting the following things right:
Step I: Choose the metal that you prefer to help you achieve your retirement goals
You will want to make the best decision when it comes to the selection of the best precious metal coins, to ensure that you get the best possible returns in the specified investment horizon. Gold and silver have different characteristics which you might want to consider before allocating any percentage of your money to them.
On average (unless things change in the future), you will find that silver costs about 65 times less than gold, which makes it more affordable for anyone who is getting started on a small budget. The costs associated with gold investments are much higher, though those who choose to go with gold get more value in terms of stability.
Silver is described as “ gold on steroids” by some investors since its prices increase or decrease significantly with the increase and decrease of the prices of gold.
Generally, for the sake of diversification, investors usually add silver coins to their investment portfolio, so that they can maximize their returns.
Step II: Find out the market price of the gold and silver coins
Before making your entry into this industry, you should always know what the spot prices of the precious metals in question are. Doing this will enable you to determine how much you are going to part with as a novice in this industry, and will give you insight into how much you can expect to pay to your dealer, to avoid getting overcharged.
In most cases, you will end up paying a premium for the precious metals, but it should, however, not be very exaggerated. It is always a good idea to cross-compare different offerings in this industry, and as much as price on its own does not guarantee the quality, knowing about what to expect can help you see establish which companies to avoid.
Step III: Determine the characteristics of the gold and silver coins that you want.
As an investor, you should only consider purchasing bullion coins, since numismatic coins are best suited for connoisseurs. At the time you are purchasing the coins, you should consider the following characteristics:
Gold and silver come in various physical forms, including bars, coins, and rounds. In this case, we have already established that the form that we are interested in is bullion coins, so you should be in a position to distinguish bullion coins from numismatic coins. Reliable gold IRA service providers will be more than willing to guide you on this matter.
Bulion coins come in different weights, so you should know which coins you’re purchasing to avoid thinking that you’re getting overcharged.
Another thing that you ought to consider is the fineness of your bullion coins. Fineness simply points to the precious metal content of your bullion, in relation to the impurities present. The IRS has very fineness standards when it comes to bullion that can be invested through a precious metal IRA. Gold bullion coins should have a fineness of 99.95% or more, while silver bullion should have a fineness of 99.99%.
There are many gold and silver refiners all over the world. They are charged with refining the gold and silver molds and molding them into bars and coins that are recognized in the international markets. Precious metals used for the purposes of investment are usually branded with their refiner’s name.
You should do your research to determine whether the refiner in question is reputable before you end up with gold and silver coins of low quality. The Good Delivery List available on the LBMA website is a useful tool that you can rely on to check if the refiner in question is accredited by the LBMA.
Step IV: Find out the purchase premium
The purchase premium is usually charged as several percentage points of the spot price of the gold and silver coins. It covers the manufacturing costs, transport insurance, as well as storage insurance.
The precious metal dealer does not have control over the spot price of the metals in the market, but they can manipulate the premium price to make their profits. As highlighted earlier on, your duty should be to ensure that you pick the dealer who charges a fair premium, and whose quality of services is great.
You should also watch out for those who lure you into purchasing gold and silver coins at discounted prices. More often than not, these are usually con artists who are usually out to bait you with good-looking discounts before having you send a hefty down payment. The exceptions to such cases are:
- Sellers who are trying to dispose of illegally acquired precious metals.
- Clueless sellers who have no idea how much gold and silver should cost.
Step V: Decide on the allocation of precious metals to your retirement investment account
The fifth step on how to invest in gold and silver coins is determining how you will allocate your funds to your precious metals. If you’re investing in gold and silver coins through a gold IRA ( the recommended approach), you are in luck because a gold IRA is a unique form of a self-directed IRA.
Self-directed IRAs offer you the option to pick your preferred assets, and to allocate the funds to them at will, provided you uphold all terms and conditions. This stage is highly dependent on your knowledge about the nature of gold and silver as long-term retirement assets. If you are new to this industry, you will need to get started by checking out the alarming report below!
What is the Next Step For You?
At this juncture, my best recommendation would be that you check out the alarming report by Chuck Norris since you need to know what we are up against. The report is free, so no need to worry about having to pay a single cent.
Beyond that, I would encourage you to consider restructuring your financial plan, if you haven’t done so already, to ensure that you have safeguarded your portfolio from the looming horrors of an unstable economy. With sufficient knowledge of the state of affairs on the ground, you can plan for your future, and for that of your children (and grandchildren if possible).
Investing in gold and silver coins should not be very complicated. – See my top recommended gold and silver IRA service providers who will help you add these precious metals to your retirement investment account.
Thank you for making it to the end of this article on how to invest in gold and silver coins. Hopefully, you will take the necessary action to safeguard your retirement investment portfolio, and that you will share this article with anyone who would need it. If you have any questions about today’s topic, drop them in the comments section, and I’ll get back to you ASAP.
I wish you well,
Eric, Investor and Team Member at Gold Retired!