Precious Metals Investing

Historically, investors and collectors hold gold and silver as protection for their savings and for their wealth at large. The United States has a storied history with precious metals, but whenever the purchasing power of the dollar has fallen the public has turned to gold and silver.

Precious metals make quality investments because you can leverage them as a hedge against inflation, deflation and currency devaluation, reducing the volatility of your portfolio. It sounds simple, but is a fact that could make a substantial impact on your earned wealth.

If you think about portfolio diversification in terms of selecting another mutual fund or stock, you’re still in the “paper” boat, you’re not doing anything to truly diversify.

The Basics of Precious Metal Investing

Before you turn to gold and silver or make any decisions about diversifying your portfolio, we want you to be fully educated about your investment options.

A government or other governing body is the only organization with the power to guarantee the purity of a gold or other precious metal coins; this is the same entity that’s responsible for the minting process. Coins are minted either for investment or numismatic (coin-collecting) value and are sold in the form of gold, silver or platinum. Knowing the different types of coins will help guide your specific investment decisions.

Bullion

Silver coin and Gold Bullion
  • Available in: bar and coin form, silver, gold and platinum
  • Value: precious metal content & cost fabrication
  • Unique quality: Require social security number for liquidation above certain minimums
  • Examples: South African Krugerrand, the Canadian maple Leaf and the American Eagle Coins
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    Numismatic

    St. Gaudens Double Eagles coin
  • Value: principally based on condition, grade, scarcity and demand (rather than precious metal content)
  • Unique quality: potentially exempt from future government confiscation
  • Examples: proof coins and those graded by Professional coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC)
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    Proof Coins

    American Eagle Gold CoinConsidered the collectors version of mass-produced bullion coins, proof coins are minted through a unique process that involves the striking of select dyes multiple times to produce softly imprinted, detailed images. Each proof coin undergoes an inspection process to become designated as a proof coin. Proof coins, like the American Eagle, are issued with the official U.S. Mint Certificates of Authenticity.

    Proof coins are considered rare; they are minted on a limited basis with their value based on mintage, rarity, condition, age and demand.
     
     
    precious metals investment guide