Some Solid Advice on Investing in Gold Coins

Gold coins can be valuable because of their melt value – the amount of gold that can be extracted from them by a gold refinery. They can be worth even more because of collectible value – if they are rare, historically significant, in beautiful condition, or possess other extras that collectors are looking for.

All those factors can make it difficult to determine what a gold coin is worth. If you own one, it is wisest to have it examined by an independent appraiser, not a coin dealer who wants to buy it from you, or who stands to make money selling it for you. For help finding an appraiser, contact the American Appraisers Association at (212) 889-5404.

 Investing in gold coins isn't as easy as this chart implies. Educate yourself with the advice from the US Government in this post. Photo Credit: Katarzyna krzysztof Dedek/Hemera/Thinkstock.

Investing in gold coins isn't as easy as this chart implies. Educate yourself with the advice from the US Government in this post. Photo Credit: Katarzyna krzysztof Dedek/Hemera/Thinkstock.

Some Advice from Uncle Sam about Buying Gold Coins

But what if you are thinking about buying collectible gold coins as investments? You can easily shop for them online these days. Or you can visit the premises of a coin dealer that sells investment-quality coins and listen to what one of the dealer’s salespeople has to say. If you have found your way to an honest dealer, that approach could all work well for you.

How can you be sure that the dealer is honest? One way is to learn all you can about investing in rare coins before you start to buy. Here is a summary of some of the advice in “Investing in Collectible Coins,” a publication from the U.S. Federal Trade Commission (FTC):

  • Take the time to educate yourself before you invest – Visit dealers online and in person. Look at coins, ask questions, and don’t feel rushed. And do some reading. The Coin Dealer Newsletter, available online, publishes wholesale value listings of the coins that dealers might offer you.
  • Understand how coins are graded – This is tricky, and very important. Most coins that you will see at dealers have been graded by independent grading services (usually either the Professional Coin Grading Service or the Numismatic Guaranty Corporation) and assigned a grade between 1 and 70. (The higher the grade, the better the condition of the coin.) The tricky part is that grading is subjective, relying on the opinion of the grader about the coin’s “overall appearance,” “eye appeal,” and other factors. On very rare and expensive coins, a few points’ difference in grading can exert a big influence on the price – where more expensive coins are being sold, thousands of dollars. The FDC cautions that, “Subjectivity in grading means there is real inherent risk in coin investing.”
  • Examine coins in person and get an independent opinion before you buy – There is no substitute for taking a look at a coin and listening to what your intuition and eyes tell you about it. If you’re investing a good chunk of money – say, $1,000 or more – it is a good idea to show the coin to an independent coin appraiser for an opinion. There is no need to travel distances to examine coins today, because many dealers are willing to send you coins so you can inspect them.
  • Know the extra costs – Ask the seller to spell out any commissions or fees.
  • See if the coin has a serial number – The Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC) assign serial numbers to coins they have graded. You can find the numbers on the plastic cases where coins are stored. Those serial numbers stay with coins and serve as tracking numbers. Before investing in an expensive coin, you can use them to research its history with the PCGS or the NGC to see whether its grading number has been changed.
  • Get a printed copy of the dealer’s return policy – According to the FTC, reputable dealers often allow returns within 14 days of purchase. Also ask about the dealer’s buy-back policy. (Some dealers will buy back coins from you at the price you paid for them.)
  • Be sure to check out coin dealers’ reputations before you buy from them – The Better Business Bureau and your state’s consumer protection agencies are good places to start. Also check out a dealer’s online reviews before buying.

And Remember, Gold Refiners.com, part of Specialty Metals, Is Here to Answer Questions

If you have coins to sell, or if you have questions about the value of collectible coins that you are thinking of buying, don’t hesitate to give us a call at 800-426-2344. We offer friendly, expert advice on valuing, recycling and refining gold, and there is never a fee to talk with us.

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