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A Beginner’s Guide to Buying Gold Coins As An Investment

10 February 2010 5 Comments

This guest post was submitted by Shaun Connell, a gold coins investor. To learn more about gold, check out his guide on buying gold coins.

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Making the big decision to invest in gold is only the first step, especially if you’re talking about investing in gold coins. Luckily for gold investors today, it’s pretty easy to get involved in this process.

In the past, you had to go out and find an individual seller of gold coins or you had to go to banks and pay big premiums for the coins. The process is not nearly as difficult now, since the internet has come along and streamlined everything.

On the net, there are various sites that allow you to buy gold coins at a nice price. So how do you buy gold coins online? What are the different options and how do you get going with them?

Buying direct from online dealers

One of the best options if you’re looking to buy gold coins online is to purchase them straight from the online dealers. There are some sites that cut out the middle man, so to speak, so you are going to have them shipped directly to your door. With a quick search online, you should be able to find multiple sites that offer this type of thing. The idea, of course, is to make sure that you’re working with a reputable company. Not all of the online coin sellers are as good as others, so it’s essential that you choose one with a solid reputation.

Putting in the background research

Before buying gold coins online with any seller, whether it’s a direct site or an auction type of site, you need to spend some time researching. This is like doing homework, except that the stakes are much higher. Different scams run online all the time, and the people who are not careful can get caught up in these scams. They can find themselves in a world of hurt because they did not check out a company’s background prior to signing on with that company.

The best thing to do is look for unbiased customer reviews about a gold seller. Don’t just trust what they say on their site. Find an independent site where people are allowed to share their thoughts. That way, you will know exactly what you are getting into from the start.

Are auction sites a good choice?

Some people would rather try to work directly with individual sellers, rather than going with a large dealer. This is an option, too, as many auction sites online have gold coins available. Some folks buy them on eBay, so that’s something to think about if you are well versed in operating on that site.

It should go without saying that buying on eBay requires much more savvy than just buying coins from a seller. The price is not set in stone, so timing will make a big difference in determining the price that you at the end. If you time things right and use a reputable seller at auction, then you can come away with some good deals by using this purchase method.

How to select a gold coin site

All of the sites out there – both auction and direct – might look somewhat similar to you. How do you tell which is a good choice and which one is going to leave you wanting? The key, first of all, is to shop at a site that has the coins that you want. There are many different coins out there on the market today, so you’re not just going to type in “Gold Coins” and get one single result. You’ll need to know the differences between the American Eagle coins and the Canadian Maple Leafs, for instance. The following coins are good bets at this time, so look for sites that have all of these:

  • American Eagle
  • Canadian Maple Leaf
  • Chinese Panda
  • South African Krugerrand

Additionally, you might find it wise to invest in older coins, since these are protected based upon their “classic” coin status. Though chances are good that you won’t need this sort of protection, it is always good to know that you have it when the time comes.

If you buy coins made prior to 1930, you have this protection and there’s the added bonus of the coins picking up more value as time goes along.

That is the nice thing about buying gold coins as an investment product. Not only do you have the power of gold backing your purchase, but also a hoard of gold coin collectors as possible buyers if you decide to sell in the future.

Knowing when to buy

Knowing where to buy and knowing what to buy is not nearly as important as understanding when to buy gold coins. There is no one correct answer to this question. You just need to understand that timing is a huge deal and you’re always better off if you can purchase coins while the market is sagging a little bit. Gold has a relatively predictable price chart.

Depending upon the perception of the American economy’s strength, you can tell when it’s going to go up and down. If you are able to spot gold coins at a price point where gold is taking a bit of a dip, then you’ll have yourself a nice investment. These are generally long term types of investments, so you are not going to be looking to make a big splash right away, but finding a nice entry point is always important.

Summarizing the gold coin buying process

With either an auction site or a direct seller, you should be able to find a company that offers the coin selection you need and the service you deserve. Doing your homework is the most important thing, but once you do that, you will be able to rest easy knowing that you’ve made a sound long term investment.

Being smart about your entry point and which coins you buy is a great place to start and it can set you up to make big time profits for the long run.

Recently many people have become familiar with the concept of selling gold jewelry for cash but selling coins is different, similar to how buying and selling gold for investment purposes is different.


  • Ulf Wolf said:

    Perhaps I can add to this that the best way to guard against being ripped off by online sales or auctions is to use a bona fide online escrow company. Although it does add some cost, that will take uncertainty out of the transaction.

    For my money, the best bona fide online escrow (and there seems to be ten fraudulent escrow sites for every bona fide one) is probably Escrow.com (http://escrow.com). In fact, it’s the only one that eBay recommends.

    Take care,

    Ulf Wolf

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