Gold has been used as a store of value for thousands of years. Investors will continue to utilize gold as a hedge against fiat currencies.
Today’s topic of interest is gold coins. Let’s discuss why investors choose to own gold coins.
A Debt Free Asset
When you convert your dollars into gold coins, you are transferring your wealth away from debt and fiat currency to real commodity money.
Commodity money has an intrinsic value that is determined by its tangible and physical content. When you hold fiat currency, such as the U.S. dollar, there is an assumed risk due to government deficits and financial obligations. When you own physical gold coins, no one is borrowing or loaning against your physical holdings. Gold coins are typically considered a safe-haven investment.
Investors generally utilize gold coins as a hedge against geo-economic uncertainty and inflation.
Protecting Your Purchasing Power
Since 2004, gold’s value has increased by over 400%. This is largely due to the fall in value of the U.S. dollar. As U.S. deficits continue to climb, gold will most likely continue to rise in value.
Why Gold Coins?
When comparing gold coins to gold bars, there are several points to consider.
Gold bars are not legal tender designated and are much easier to counterfeit. Gold bars are often required to be assayed at time of liquidation to verify gold content. This is an added process and expense that the seller will assume at time of liquidation. This is why gold bars generally bring less than spot value at time of liquidation.
Gold coins are sovereign mint produced and legal tender designated. Sovereign mint produced coins have mint marks located on the coins. This makes it more difficult to counterfeit a gold coin. Making sovereign mint produced coins a more secure median for investors to buy and sell. Gold coins generally do not require the added step and expense of assaying. Gold coins are also offered in fractional form and are more widely accepted and easier to barter with for that reason. Many gold coins bring more than spot price at liquidation. Gold coins command a larger market share due to their user-friendly attributes.
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