5 Bullion Coins for Investment: What You Need to Know

December 28, 2023 1550 view(s)

Gold is the only metal that has a yellow tinge, making it rare and highly coveted. Gold also came to Earth because of the meteorites that showered it 200 million years after its formation. From one-of-a-kind beauty to historical intrigue, gold is a metal that has it all.

Bullion coins are a great investment for those building a precious metal portfolio. Read on to learn the ins and outs of how to buy gold bullion, why you should purchase it, and what storage options are available.

The Basics of Bullion Coins

Bullion coins are different than numismatic coins. While numismatic coins are legal tender minted by the government, bullion is minted by private mint companies. You can't spend it at the store because it isn't legal currency.

Instead, the worth of bullion coins lies in their precious metal content. High-quality gold bullion is made with anywhere between 95% and 100% gold content, so it retains its value over time because of gold's inherent worth.

Many bullion coins also have collector value, which makes them worth even more. For example, many collectors are willing to pay more than the spot price for a new American Eagle or an old and interesting Buffalo coin. Collector's coins also tend to increase in value over time as they become rarer, so this makes bullion coins an especially good long-term investment.

Why Is Gold Bullion a Great Investment?

Because of their status as collectibles, some investors purchase them as collector's items. This usually is true of coin enthusiasts and those looking to get into a new hobby. Some people also find that they make great gifts for loved ones on special occasions.

However, a love of coins is far from the only reason to invest in bullion.

Diversification

Most people who purchase gold bullion are looking to diversify their investment portfolios. Gold bullion, like all precious metals, is a tangible asset. You can see it, touch it, and physically store it in a secure location.

Unlike stocks and bonds, which can go bust when their corresponding business hits a rough patch, gold bullion always will have value. It's intrinsic in the metal content. If you invest, you won't need to worry about gold losing its worth since it doesn't only have worth that another entity assigns to it.

Hedging Against Inflation

Bullion doesn't just serve as a diversification tool in portfolios with stocks and bonds. It also can hedge against inflation of fiat currency.

Government-issued money can lose its value because of national or geopolitical events. This means that $100 may be worth way less 10 years from now than it is now. If this happens and you have money stored in a savings account, it's not going to be worth as much when you take it out later.

This doesn't happen with gold since it always will have applications in several markets. It's used to make jewelry, industrial equipment, auto parts, consumer electronics, dishware, and a wide range of other goods.

In fact, gold's value generally moves in the opposite direction that money's does. When cash loses its value, people turn to gold as a reliable investment for a rainy day. The gold market then goes up and you can sell it for a higher rate.

This makes gold a great hedge against natural economic downturns.

Reliable Market Growth

Gold couldn't serve as such an effective hedge if its growth were unreliable. Luckily, gold rises in value pretty steadily over time.

In the 1910s, it was only worth $600 per ounce. In December 2022, it was worth about $1900 per ounce.

As of the end of 2023, it's worth over $2000 per ounce. The NYMEX continuous gold contract cites prices as high as $2152.30/ounce. People better understand gold's value now than ever before, and demand increases appear here to stay.

Gold prices have recently hit a record high. Current trends also hint that its value may keep increasing in the future, though there are never guarantees. Even if it does not, though, it won't lose intrinsic value, so you'll make something off of it.

1. Gold American Eagles

American Eagle coins are one of the most popular gold bullion coins on the market. Since they came out in 1986, annual releases have showcased different images relevant to America's growth and development. Symbols of the US like Lady Liberty and the bald eagle are common threads.

1-ounce American Eagle gold coins are the most common. They're almost entirely made up of pure gold. Coin enthusiasts also are willing to pay more for these coins because they're historically significant, rare, and come together for a cohesive collection.

2. American Buffalos

American Buffalo coins are yet another popular gold bullion option. These all-American coins honor our history with a similar design to the Indian Head nickel and have an American Bison on their opposite side.

Like American Eagles, these coins are produced annually. Since the first one came out in 2006, collectors have been looking to complete their collections with new coins. This means that you'll be able to sell them for more money down the line as they become rarer and highly sought-after investments.

3. Britannia Coins

Britannia coins are British gold bullion coins. The Royal Mint has been issuing them since 1987.

The front side of each coin until 2023 showcased Queen Elizabeth II. 2023's Britannia coin is the first to show an image of King Charles II. This is sure to make it an easy-to-sell collector's item in the future.

The reverse side of Britannia coins showcases a feminine representation of the Lady Britannia, a symbol of UK patriotism and independence. She is depicted in various poses across different years. This makes each coin distinct from others so that they retain special collector's value.

History enthusiasts across the world love these coins. After all, the UK has one of the longest and richest histories on the planet.

4. Maple Leaf Coins

Maple Leaf coins are Canadian gold bullion. They are issued by the Royal Canadian Mint and have been made since 1986.

The obverse of the coins showcases Queen Elizabeth II much like the Britannia coins do. However, the reverse side shows a maple lead rather than the Lady Britannia, which is a widely known national symbol in Canada.

These coins are valuable among Canadian collectors, but people across the world can hold them as an investment. They retain their value over time and are eligible for placement in self-directed IRA accounts. They're versatile and beautiful, and you can get Maple Leaf coins minted in many different years.

5. Commemorative Bullion

If you're looking for a lower upfront investment price, US Mint $5 Gold Commemorative Bullion is a great choice. Rather than buying a single coin for over $2000, you can purchase 1-19 coins for about $524.

These commemorative coins have been produced since 1986. Their designs commemorate events like the 1988 Summer Olympics. Sporting events like the World Cup have also been included, as have anniversaries of big events in our history such as the establishment of Mt. Rushmore.

Some coins also commemorate influential people like Franklin Delano Roosevelt and Mark Twain.

When you order commemorative coins, you're getting high-value bullion content. You're also getting one of many collectible options that you'll be able to sell at a profit later.

Plus, when you order commemorative bullion coins from the US Gold Bureau, you get a plastic capsule that serves as a protector and display case. They're great additions to any collection, and they're amazing bullion investments that you can store for later.

Storing Your Gold Bullion

If you're purchasing gold bullion for an IRA investment, you'll need to hire a custodian to place it in a special IRS-approved depository. This custodian will manage it for you, and you won't see the bullion until you retire and cash out on its value.

However, if you're not creating a precious metals IRA, you still will need to store your bullion safely.

Some people like to put it in an at-home safe. This makes sense for those who want to keep tabs on their gold, but it isn't the most secure option. You could lose it, someone could steal it, or an unforeseen disaster like a fire or flood could destroy your belongings.

Safe deposit boxes at the bank are a better bet. They're more secure, and protections are in place to keep your belongings safe. They're also fairly inexpensive to rent out, which makes them a popular choice for investors.

You also can use a specialized precious metals storage service to secure your assets. Gold bullion storage insurance is also available, so look into all of your options to ensure that your gold bullion is secure for years and decades to come.

Start Investing in Gold Safely

Understanding the ins and outs of precious metals investment is critical when buying bullion coins. You'll need to know the market, understand how they hedge against inflation, and determine how to best secure your portfolio.

Luckily, the United States Gold Bureau has assembled resources that you can access when shopping online for gold bullion.

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