Before I begin to write about how to buy gold coins, the first thing you need to determine is the size of the coins you’re looking to buy. Below you will find a chart with displaying the weights of different coins. All coins are in troy ounce.
Gold Coin weights: 1 oz. – 1/2 oz – 1/4 oz. – 1/10 oz – 1/20 oz. ( Canadian Royal Mint )
The above list of coins contains the most common found on the market today. The 1 oz. coins carry the cheapest premium over spot. The smaller coins tend to carry higher premiums. The reason for the price increase is due to the manufacturing of the coins. I have heard the Royal Canadian Mint will reject 30%+ of the 1/20 oz gold coins they produce; this is very costly and time consuming, so the cost to buy the coins increases. Also contributing to the price, Government mint gold coins are VERY precise in dimensions and for good reason: this makes counterfeit coins easy to detect.
If you’re looking to buy small (fractional) gold coins for “barter”, as I have heard many people asking about, buy a couple ounces worth of fractional gold coins. Don’t buy only 1/10 or 1/20 ounce gold coins as the premium over spot is VERY expensive and in my opinion you are wasting money. The bulk of your gold coin investment should be in 1 oz gold coins. Also DO NOT BUY GRADED COINS OR PRE 1933 GOLD COINS!!! If you are looking to invest in gold, and not rare coins, stick with the basic gold bullion coins. If you’re on the phone with a dealer telling you to buy graded or collectable coins HANG UP THE PHONE. You should not feel uncomfortable when calling to ask questions – if you do, hang up and call another dealer.
Best gold coins to buy
For some reason people in the United States feel they must buy Gold American Eagle Coins. While the United States mint does make beautiful and consistent gold coins, I would recommend looking at the Canadian Maple Leaf gold coin as an option. The Canadian Maple Leaf is a 24 kt. gold coin, versus 22 kt. for the American Eagle Coins ( this means pure gold, more on why this could be important later). BOTH coins contain one troy ounce of gold but the American Eagle coin contains 3% silver and 5.33% copper as well. Many people, when buying gold coins, prefer to own solid gold (Asian buyers seem to really prefer 24 kt. gold, much more so than US and Canadian buyers). For this reason the American Eagle coin is slightly larger than the Canadian Maple Leaf coin. Not to mention the fact that the United States Mint has a higher premium on the Gold Eagle compared to the Royal Canadian Mint. Last time I checked ( Aug. 2012 ) the US Mint was charging 3% over spot for a 1 oz. gold Eagle to wholesalers, while those same whoesalers (buying in bulk) can obtain Maple Leaf coins for around $25.00 over spot. So at a spot price of $1,700 the US Mint is charging $51 to wholesalers while the Royal Mint is charging around $25. These savings can be passed on to you the customer simply by purchasing the proper coins.
Buying pure gold coins
Another reason I recommend buying gold maples, if the public begins selling coins and overwhelms the buying capacity of bullion dealers and wholesalers the coins need to go somewhere. The last line of defensive for coin dealers is the COMEX (which requires 24 carat 0.995+ fineness) and jewelers (produce rings and such). If you have a 24 kt gold coin they can easily be melted down for jewelry and made into COMEX-approved bars. If you have a 22 kt. coin ( American Eagle ), the coins would need to be refined. Refining costs money and would make them a less attractive option to the bullion buyer should such a selling pressure take place. Again I am not saying this is going to happen, just trying to help prevent a problem, if it were to happen. Not only can you save money while buying gold Maple Leafs you are getting pure gold coins. For this reason I would recommend buying the Maple Leaf coins.