Debunking 3 Myths About Gold Coin Investments
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Investing in gold is a time-tested strategy to preserve wealth and diversify portfolios. Gold coins hold a special appeal for many investors. However, like any investment, gold coins are surrounded by myths that may deter potential investors.
In this blog, we will debunk three common myths concerning gold coin investments to help you make an informed decision.
Myth 1: Gold Coins Aren’t a Practical Investment
One of the prevailing myths about physical gold coins is that they are impractical compared to other forms of gold investments. Contrary to this belief, gold coins can be a highly practical and tangible investment. Unlike paper assets designed to replicate gold, gold coins offer intrinsic value and aren’t subject to the risk of default by a counterparty. Physical gold ownership is not reliant on the performance of a third party. You can take physical delivery. Gold coins are easy to store and transport. Gold coins are easy to purchase and sell. Gold is liquid. Gold is viewed as an international currency by many.
Myth 2: Gold Coins Have High Premiums and Low Returns
Another common myth surrounding gold coin investments is that they are expensive to purchase and offer low returns. The premium on a gold coin refers to the additional cost to purchase above the spot price of gold, which novice investors mistakenly think eats into potential profits. However, certain coins also return a premium over the spot price to the investor at time of liquidation.
The premium on gold coins can vary depending on factors like the coin’s rarity, historical significance, and condition. The premium of a gold coin is the additional value above the spot price. This should not be confused with the commissions and fees charged by a precious metal dealer. When purchasing precious metal coins choose a competitive and reputable dealer. A reputable dealer will offer online purchase product pricing. Only work with precious metal dealers that offer transparency by offering online product purchase pricing to the consumer.
Regarding returns, gold coin investments have demonstrated stable and reliable growth for thousands of years. While short-term price fluctuations are possible, gold has shown resilience during economic downturns and has acted as a hedge against inflation and currency devaluation. Investors should view gold coin ownership as a long-term strategy for wealth preservation rather than a get-rich-quick scheme.
Myth 3: Gold Coin Investments Are Only for Collectors
A myth circulating among novice investors is that gold coin purchases are primarily for collectors or survivalists rather than serious investors. However, this is far from the truth. Investors interested in utilizing gold coins as a hedge can focus on investing in sovereign mint and legal tender coins, which are liquid worldwide and have stood the test of time as a reliable asset class to diversify and hedge against inflation.
Invest in Precious Metals with Orion Metal Exchange!
Are you looking for a trusted American gold Eagle coin dealer to utilize? Look no further than Orion Metal Exchange.
As the premier gold and silver investment company, we offer physical gold, silver, platinum, and palladium products. We are a full-service precious metal company that can assist you in buying, selling, or exchanging precious metal coins through IRAs, 3rd party insured storage, and insured home delivery.
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Need Answers? Check Our FAQ!
Is it a good idea to invest in gold coins?
Gold coins are utilized by investors to protect purchasing power from inflation and diversify away from debt.
Is it better to buy gold coins or jewelry?
Sovereign Mint produced gold coins are designated as legal tenders and can be held within an IRS approved retirement program. Gold jewelry is generally purchased at a significantly higher cost per ounce and is not designated as legal tender.
Are gold coins a safe investment?
When you own gold coins, no one can borrow or loan against your holdings without your consent. Fully owned gold coins are not susceptible to the risks associated with debt.
