Five convincing reasons to invest in gold coins

Are you looking for investment ideas? Find out why investing in gold coins could be right for you. 

It’s important to invest for your future. From saving up for things you may want to buy – an extension to your home, dream holiday, new car – to giving yourself a buffer for a rainy day or simply ensuring you have enough funds for when you retire, putting aside money if you can afford to is always a good idea. 

But making the decision on how best to save can be tricky. Do you play it safe and opt for a basic savings account? If you do, you may be guaranteed not to lose your money, but pay the price in lower interest rates. 

Or do you take a bigger risk and look for less predictable savings options – and potentially be rewarded with a much higher return? 

There are so many different options for saving money these days that making a decision can be confusing and feel virtually impossible. To help you, in this article we’ll look at one type of investment – gold coins – and share reasons why this may be the right choice for you. 

What does investing in gold coins mean?

Gold has been considered a highly valuable asset throughout history. The first gold coins were struck around 550 BC, making them an essential foundation of our monetary system. And even when we moved away from actual, physical gold currency, and started using paper money, the ‘gold standard’ meant that it still kept a link to gold.

Today you can invest in gold in two ways: buying gold coins or gold bars. You can buy gold coins in a range of sizes and designs from reputable precious metal dealers. They are available to buy singly or in tubes of coins. 

What to be aware of when investing in gold coins

Unlike ‘virtual’ investments like stocks and shares, you physically own the gold coins that you invest in. This means that you will need to find somewhere secure to store them to protect them from damage or theft – or losing them! 

Some people keep their gold coins in a safe at home, while others prefer to store them with a custodian. If you do store them at home you’ll need to ensure you have adequate insurance to cover their value. 

Another thing to be aware of when investing in gold coins is to make sure you are buying the real thing, and not a fake. Fraudsters today have become very clever at creating convincing fakes. 

However there are some simple ways you can protect yourself and ensure you are buying the real thing. The first is the acid test. Gold doesn’t degrade in sulphuric or nitric acid. So if your gold coin does not, then it is the real thing. 

There’s also the magnet test. Counterfeit gold coins are made predominantly of base metals, with very little precious metal in them. So if a coin is attracted to a magnet, there’s a good chance it contains base metals and is not the real thing. 

And finally, the best way to protect yourself when buying gold coins is to always purchase from an accredited and licensed dealer. They will have checked the authenticity of the coins you are buying, and also give you the reassurance of legal recourse if you later discover they sold you a fake. 

One last thing to bear in mind when buying gold coins is that the most valuable gold coins according Oxford Gold Group are not necessary the oldest. Some more recently minted gold cons are worth much more than ancient ones. 

Five convincing reasons to invest in gold coins

So if you you are curious about gold coins and considering investing in them, here are five reasons why it may be a good idea. 

1) Gold maintains its value over longer periods

While the price of gold may rise and fall dramatically in the short term, it maintains its value over time. So if you are looking for a long term investment with more security than fiat currency (a government-issued currency that ’s not backed by a physical commodity), then gold may be right for you. 

2) Gold can hold its value in a crisis

Gold is often called a ‘crisis commodity’, as it can hold its value in financially and politically uncertain times. When global tensions are high, or confidence in governments is low, gold tends 

to outperform other investments. So if you want to hedge against global uncertainly or potential national crises, gold could be a wise investment. 

3) Gold can balance out your portfolio

If you already have an investment portfolio then diversifying into gold can be a clever idea. Thanks to its stability in times of crisis, the value of gold tends to go up when other investments go down, ensuring a stabilising effect for your investment portfolio.

4) You’re more protected from banking risks and changing laws with gold

When you buy physical gold, you are holding assets outside of the banking system. This lowers your exposure to banking risks, while diversifying your investments. Unlike fiat currency, governments don’t determine the value of gold, so you are also more protected from changing government laws, too. 

5) There’s a limited supply of gold in the world

And finally, one important reason why gold coins are such a popular investment is there is a limited supply of gold. Research shows that the presence of copper in the earth’s crust is around 55 parts per million, compared to just 0.0038 parts per million for gold. This scarcity ensures that gold is likely to remain an in-demand resource, with demand outstripping supply.  

Could gold coins be the right financial investment for you?

There are so many options available if you are considering investing. In this article we have explored what investing in gold coins means, and shared four reasons why it might be right for you if you are looking to diversify your investments, or are just starting out on your investment journey.