Investments in Gold – Chapter 7: Numismatic and Semi-Numismatic Gold Coins

This is chapter number 7 out of 15. Read the rest:

Read Investments in Gold – Chapter 1: Introduction
Read Investments in Gold – Chapter 2: Advantages of investing in Gold
Read Investments in Gold – Chapter 3: Disadvantages of investing in Gold
Read Investments in Gold – Chapter 4: Guidelines for Investing in Gold
Read Investments in Gold – Chapter 5: Investments in Physical Gold
Read Investments in Gold – Chapter 6: Bullion Bars and Coins

Old or rare coins which are bought not only for their precious metal content but for their aesthetic values, historical significances and rarity are known as numismatic coins. The prices of these coins are not pegged to the current market gold price. Their values are determined by their collector value. What this essentially means is that numismatic coins can rise in value faster and greater than the price of gold in a bull market. It also means that prices can fall faster and greater than gold prices in a bear market.

Semi-numismatic coins are numismatic gold or silver coins that are comparatively common. What this means is that their value are predominantly determined by their precious metal content as opposed to their collector’s value.

The majority of numismatic gold coins investors prefer pre-1933 gold coins which had been graded MS-65 or higher by the Numismatic Guaranty Corporation or the Professional Coin Grading Service. Unless they are bought in large quantities, most investors or collectors take physical possession of their purchases. In respect of delivery cost, insured delivery of both bullions and numismatic coins are usually 1% to 2% of the total value. Insured storage in an allocated account can cost around 1.5% per year. Investors also have the option to store their purchases in safe deposit boxes of retail banks or at special storage facilities or depositaries. 

According to Lawrence Chard, of Chard Specialist Coin And Bullion Dealer, sovereigns although are transacted at a highly premium, due to their aesthetic and historic values as well as smaller size, they are worth the price that you pay for. They are also exempted from Capital Gains Tax in the UK. When compared to South African Krugerrands, experts are of the opinion that sovereigns are worth paying the extra premium for. According to Chard Specialist Coin and Bullion Dealer, if the price differential between sovereigns and South African krugerrands is around 2%, sovereigns are a better long term option. Investors purchasing 50 sovereigns or more will find that the price differential is below 2% and on occasion as low as 1% and as such making sovereigns an exceptional buy.

British Sovereigns coins are priced around £128 per coin. Their distinguishing features are the Queen’s head on one side of the coin and a horse and dragon on the reverse side. Apart from British sovereign coins and South African Krugerrands, investors also have the options of buying the American eagle, the Britannia coins, the Canadian Maple Leaf coins or the Georgian, Edwardian or Victorian coins. 

Read Investments in Gold – Chapter 8: Gold Certificates
Read Investments in Gold – Chapter 9: Allocated Accounts
Read Investments in Gold – Chapter 10: Paper Gold Investments
Read Investments in Gold – Chapter 11: Gold Stocks
Read Investments in Gold – Chapter 12: Gold Futures
Read Investments in Gold – Chapter 13: Technical Analysis
Read Investments in Gold – Chapter 14: The Motivations for investing in Gold
Read Investments in Gold – Chapter 15: Conclusion