New To Buying Gold Coins...

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I think if you're buying more as an investment, you should look to Krugerrands, Maple Leafs, and other bullion. These give you the most gold for you money, like of the $900 or however many pounds you pay, 95% of the money is in gold.

If you want to buy Sovereigns, they're going to cost you, and most of the time the gold content is only 80% of the price you pay. When it comes time to sell, it might be harder since it's not exactly 1 or a fraction of an ounce, and most buyers today will only give you spot price (gold content only).

Also, if you're going to buy from a dealer, be warned that it will be very expensive. I recommend you to look around online for any reputable British bullion + coin shops to get the best price. I use APMEX.com, but that's only in the states.

I mean if the SHTF, no amount of gold will protect you. Only a rifle, a crate of Spam and your family...

For bullion investment buy popular coins/bars/rounds at the best price you can find. The numismatic value should have no bearing on your purchases. Every purchase should consider the current spot price. Krugerrands, Maples and Eagles are the most popular in North America.

In the UK there might also be more access to Britannias, Isle of Man, Philharmonics, and of course Sovereigns. But French/European gold coinage should also be quite available to you. Still, as strict investment, recognized coins/bars/rounds that are marked with their gold content are best.

A bent or worn coin is more likely to be at spot as opposed to some pristine proof piece. If your into capital preservation you must keep your costs driven to spot. Excess of spot price to get a mint proof coin will eat away at your initial investment because the premium on proof coins will evaporate, especially in dire economic times.

Don't be talked into fancy/rare coins, when you are looking for bullion investment. Pay for the gold content at fair/current market conditions and you will be fine. Eventually, you may learn to like some numismatic rarities... but don't purchase these until you educate yourself.

I would not advise you financially as to the amount you should be spending. There are professionals for that. Gold is a great form of compact wealth. A good amount can be stashed in a small space... 30 sovereigns are but a handful of coin, and more popular in the UK than in America, so their content, although unmarked, is well known.

As an investment you are paying for the gold content only. Anything above that will be a waste of money, well, until you get hooked into collecting...

Very interesting thread guys. My mom passed away this last august leaving quite a bit of real-estate, stocks etc. I have been looking into the gold thing myself as I have never purchased any before. I can see, where buying coins, would be easier to trade than a slab of metal. Also the canadian coins look like a better investment than the US coins... I think you call that .. over spot price is that right?

For bullion, Canadian Maples and Krugerrands have smaller premiums over American Eagles. 1 oz bars from Pamp, Credit Suisse, or JM are attractive and widely accepted anywhere in the world.

There could be a small premium too when you do sell your coins, depending on market conditions. For example, they may buy American Eagles back at $10 over spot if they have a demand, making $40 the buy-sell spread.

It depends. If you bought gold at 600 back in 2007 and sold them when the went over 1k this time last year, you wouldn't mind paying that transaction cost. Also, gold is a hedge against inflation and security in times of turmoil because it is universally accepted. You can go to India, France, South Africa, Brazil, China... and the price of gold (in relation to the US dollar) is about the same.

Precious metal spot prices are volatile.

Gold could go up $40, or down $40, in 24 hours.

In 2008, there's been a lot of going up/down $20 or more in 24 hours.
(and $40+ spreads in 48 hours)

http://www.kitco.com/charts/historicalgold.html

One look at the Multi Year Gold 2000-2009 chart explains why there's so much demand for physical gold.
Any purchases of gold in 2001 have more than tripled in value since then.

With national interest rates at near zero, anyone can beat "money in the bank" simply buy buying gold 'low' and selling 'high'. If you bought gold at $800 on Monday, and it was $860 on that Friday, you could sell the coin back to the dealer and you'd have made $20 even after the over-spot coin premium. This is like the precious metal version of 'day-trading', but some people do it! You sure can't make $20 on interest on an $800 bank deposit in one week. Yes, this would require speculative skill and luck to profit from such a short-term buy-sell strategy.

The demand for physical gold worldwide is exceedingly strong, and has not been affected by periodic drops in spot price. Spot price can drop due to large sell-offs of paper gold futures (as in last October).

Your investments in gold should be viewed more as a long term prospect and a 'safety net'. Gold won't go bankrupt or defraud you. The key question to ask before you sell them is "Do you think gold would be higher if you sold them this time next year?", and by now even most of the world's mainstream financial experts would say that gold's 'prospects' are excellent for 2009.

I would stick with the government issued bullion coins like American Gold Eagles and Canadian Maples (these have the fineness and weight stamped right on them).

Yes you will pay a premium on these from a dealer, because even the select few very large dealers pay a premium from the mint. The smaller the fractional (1/10 oz) the bigger the premium. I have read somewhere that the large selected dealers that qualify to be distributors of the US Mint products pay premiums over spot as follows:

1/10 oz spot + 9%
1/4 oz spot + 7%
1/2 oz spot + 5%
1 oz spot + 2-3%

I dont know if these are the exact correct numbers but it gives you a good idea of how the market works.

Collectible pre 1933 coins are nice too, but if you are looking as a hedge against inflation or bad economic times, you are better off with the bullion type coins. If TSHTF and our dollar collapses, any numismatic premium on pre 1933 gold coins will diminish greatly.

So to summarize, stick with well recognized/well known bullion coins with purity and weight stamped right on the coin (that way there is no question if you go to sell it to a private party when it's time to cash in) or bars with assay cards. Either way, get a mix of fractional (less than 1 oz) coins/bars and full 1 oz coins/bars depending on how much you wish to spend.

Good luck!