Steve Rand
General Manager / Sr. Precious Metals Advisor
Steve Rand is the General Manager and a Sr. Precious Metals Advisor at Scottsdale Bullion & Coin. He brings over 20 years of experience in the physical precious metals markets.
Gold coins are a staple investment vehicle in the dynamic world of precious metals assets due to their 1099 tax form privacy, ease of storage, various sizes, and diversity of options. Ironically, this range of possibilities makes it challenging for investors to determine the best gold coins to buy.
How to Determine the Best Gold Coins to Buy
As with any type of gold coin investment, finding the “best” is a subjective matter. The answer will depend entirely on an investor’s unique circumstances. For example, a retiree’s definition of the best gold coins to buy may look much different than a young professional starting their journey of portfolio diversification. Looking at various gold coins through the lens of your specific investing situation will make it easier to determine the best options.
Here are some ways to narrow down your options and find the best gold coins to fit your investment goals:
The Best Gold Coins to Buy for Long-Term Stability & Largest Growth
When purchasing gold coins, many people take a long-term investing approach for optimal returns and prolonged stability. If you’re willing to wait years or possibly even decades, you can find some of the highest returns through investment grade gold coins. In contrast to bullion coins, investment grade coins are worth more than their weight in gold. They have inherent value from a combination of rarity, beauty, population, and historical significance. The value determined by these factors compounds over time.
Here are some fantastic investment grade coins to consider for long-term stability and growth:
The Best Gold Coins to Buy for Short-Term Growth
Some investors want to take advantage of sharp price movements in the precious metals market without having to rely on paper gold assets such as gold ETFs or mining stocks. In this scenario, investors might want to focus on 1 ounce (oz) gold bullion coins. Swing traders can benefit from the high liquidity, lower premiums, and price transparency of these gold bullion coins. The relatively small size of these coins gives traders increased flexibility, making it easier to take advantage of temporary volatility in spot gold and silver prices.
There are plenty of popular gold bullion coins that come in 1 ounce sizes and smaller, including:
- American Eagle Gold Coins (1 oz, 1/2 oz, 1/4 oz, and 1/10 oz)
- American Buffalo Gold Coins (1 oz, 1/2 oz, 1/4 oz, and 1/10 oz)
- Canadian Maple Gold Coins (1 oz, 1/2 oz, 1/4 oz, 1/10 oz, and 1/20 oz)
- South African Krugerrand Gold Coins (1 oz, 1/2 oz, 1/4 oz and 1/10 oz)
- Austrian Philharmonics Gold Coins (1 oz, 1/2 oz, 1/4 oz, 1/10 and 1/25 oz)
- Australian Kangaroos (1 oz, 1/2 oz, 1/4 oz, 1/10 oz, 1/20 oz and ½ gram)
- Britannia Gold Coins ( 5 oz, 1 oz, 1/2 oz, 1/4 oz, 1/10 oz, 1/20 oz & 1/40 oz)
The Best Gold Coins to Buy for Privacy
Personal and financial privacy are increasing concerns among investors as the government flirts with digital currencies. Gold isn’t only a safe-haven from economic pressure; certain gold coins also offer protection from government overreach. The best gold coins to buy for privacy fall within the investment-grade category. Unlike with other gold assets, the government doesn’t require investors to divulge their social security number or fill out a 1099 tax form when selling investment-grade coins.
Consider these valuable, privacy-guarding rare coins:
- Saint-Gaudens Double Eagle Gold Coin
- Liberty Gold Coins
- Indian Heads
- $3 Princess’
- Proof Gold Eagles
- Round/Octagonal Pan Pacs
The Best Gold Coins to Buy for Barter
With the possibility of a dollar collapse looking more and more probable, some investors are eager to prepare for a future of bartering. Gold’s inherent value, universal recognition, and widespread use make it an ideal candidate for trading. However, the best gold coins to buy for bartering differ from other investment goals. Generally, fractional, or smaller bullion coins work best. They’re practical for small, individual transactions given their ease of divisibility. Plus, it’s easy to determine the value of bullion coins when compared to their investment-grade counterparts, making them more ideal for bartering.
You can find plenty of gold bullion coins in ½, ¼, 1/10, and even 1/20 or 1/40 oz denominations which would make excellent bartering candidates such as:
- American Eagle Gold Coins (1 oz, 1/2 oz, 1/4 oz, and 1/10 oz)
- Canadian Maple Gold Coins (1 oz, 1/2 oz, 1/4 oz, 1/10 oz, and 1/20 oz)
- Austrian Philharmonics Gold Coins (1 oz, 1/2 oz, 1/4 oz, 1/10, and 1/25 oz)
- Australian Kangaroos (1 oz, 1/2 oz, 1/4 oz, 1/10 oz, 1/20 oz, and ½ gram)
- Britannia Gold Coins ( 5 oz, 1 oz, 1/2 oz, 1/4 oz, 1/10 oz, 1/20 oz, and 1/40 oz)
- Maplegrams from RCM (1 gram)
- Gold rounds from private mints like Valcambi
- (Note: Even though they are shaped like coins, gold rounds are considered round gold bullion bars.)
Silver for Bartering: If bartering is your primary goal for investing in physical precious metals, you might want to consider silver instead of gold. Silver is more affordable than gold, making it easier to acquire in smaller denominations.
Some popular silver coins for bartering include silver rounds, Morgan dollars, and Peace dollars. Also, silver bullion bars are a popular choice for those looking for a potential bartering option.
The Best Gold Coins for Retirement Accounts
If you’re purchasing gold coins for a precious metals IRA, you’ll need to focus on IRA-eligible coins. The IRS has strict limitations on what kind of precious metals investors can own in their retirement portfolios. However, accepted coins span bullion and proof coin categories, leaving investors with plenty of options.
- American Eagle Gold Coins (Bullion & Proof)
- American Buffalo Bullion Gold Coins (No proof)
- Canadian Maple Gold Coins (Bullion)
- Austrian Philharmonic Gold Coins (Bullion)
- Australian Kangaroos and/or Kookaburra Gold Coins (Bullion & Proof)
- Britannia Gold Coins (Bullion & Proof)
- Mexican Libertad Gold Coins (Bullion)
⚠️ BUYER BEWARE: Don’t Overpay for Dealer Exclusive Coins in Your IRA
What Makes a Gold Coin a Worthwhile Investment?
High Liquidity
High demand is a defining characteristic of worthwhile investments. When considering the best gold coins to buy, focus on coinage with a well-established and active market. The ability to readily buy or sell a gold coin ensures easy access to the cash value of your investment when needed. This is why many investors stick to coins exclusively from government mints or highly reputable private mints.
Scarcity
Rarity is another factor to consider when searching for the best gold coins to buy. The inescapable law of supply and demand dictates that the coins in limited numbers tend to fetch higher prices. Limited minting, age, and condition can all impact the scarcity of a coin. Of course, this needs to be accompanied by a steady demand for the gold coin to be considered a valuable investment.
High Purity
While gold is too soft to comprise a coin entirely, you should still seek out high fineness ratings. A 90% purity rating is the baseline although most modern coins have 0.999 fineness. Gold bullion coins are only worth their weight in gold, but investment-grade coins have inherent value beyond their gold contents. These numismatic coins have performed exceedingly well during the most recent spate of inflationary pressure along with many collectibles.
Historical Significance
Gold coins linked to momentous events, periods, or people boast unique value due to their historical significance. Their association with crucial moments or figures increases their desirability among collectors which boosts their value. Furthermore, most of these coins are scarce by nature, further heightening their inherent worth.
Consider This When Looking for The Best Gold Coins to Buy
Budget Limitations
Every investor has different budget limitations which should be taken into account when determining the best gold coins to buy. As with any investment, you need to ensure your gold coin purchases align with your financial capacity. Whether you’re investing a modest amount or making more high-end selections, sticking within a budget can safeguard against financial strain. This fiscal responsibility puts investors in a good position to make consistent, timely investments for optimized returns.
Portfolio diversification
Smart investors understand that gold is the anchor to a well-diversified portfolio, but asset allocation doesn’t have to stop there. You can further optimize your portfolio’s stability by achieving a deeper layer of diversification among your gold holdings. The best gold coins to buy might vary depending on what you currently hold. For example, a first-time gold investor probably wouldn’t purchase the same gold coin as a seasoned investor with a robust coin collection.
Primary Objectives
Determining the best gold coins to buy requires a constant reassessment of your investment goals. Your current objectives not only vary from those of others, but they also differ from your previous aims. In other words, you would expect to have different motivations when you’re approaching retirement than when you first started investing. Before buying any gold coin, you should clarify your current goals to inform your investment decisions.
Risk Tolerance
Every investment carries a certain amount of risk. As an investor, it’s your job to determine how much risk you’re willing to assume. An accurate assessment of risk tolerance considers personal factors such as budget limitations, time horizon, and investment experience along with environmental conditions such as market volatility and supply and demand. Generally, larger gold coin denominations issued by governments offer greater stability while smaller, rarer coins offer greater short-term gains but higher risk.
Market Conditions
While personal investment factors such as budget limitations are crucial, they can’t tell you the best gold coins to buy in isolation. Investors also need to look at relevant precious metals market conditions when assessing a coin’s merit. Gold prices, supply and demand, geopolitical events, and market manipulation can all influence the performance of gold. Assessing these ever-changing conditions can make it easier to pinpoint the ideal investment at any given point in time.
Dealer Premiums
No matter what kind of gold asset you’re buying, a dealer premium is placed on top of the cost the dealer pays. Not even coin dealers can buy at the spot price. This add-on covers overhead costs including fabrication, distribution, and storage incurred by coin dealers. While the premium might be unavoidable, investors don’t have to settle for any price. There are times when a specific gold coin might experience exclusively high premiums due to unfavorable market conditions. During these times, you might be better off investing in another gold coin with similar value or simply waiting until premiums decrease. Unfortunately, some dealers arbitrarily inflate the premiums of dealer-exclusive coins by overplaying their rarity and value.
Consider Working with a Precious Metals Advisor.
Discovering the best gold coins to buy requires an in-depth assessment of personal factors and market conditions. Working with an experienced precious metals advisor can speed up the process by clarifying which gold coins align with your unique investment circumstances.