About Gold Coins
Should I Buy Gold Coins?
Gold has been the most treasured object in the world since antiquity, for it is durable, portable, divisible, and relatively scarce; it is also easily identifiable, malleable, and it is nearly impossible to create. These properties make gold a preferred monetary metal and have ensured its place as a symbol of wealth and power, as well as a guarantee for the value of currencies, for centuries.
Top three reasons people buy gold:
- to stabilize investment portfolios
- to ensure indestructible purchasing power
- to collect heirloom-quality assets
Gold’s stable purchasing power and durable value makes it a strategic asset in a diversified investment portfolio. Many investors are drawn to gold's role as a hedge against systemic risk, inflation, and volatile stock market fluctuations. Historically, gold has improved the risk-adjusted returns of portfolios, reducing losses, and provided liquidity to meet liabilities in times of market stress.
Gold is not only useful in periods of higher uncertainty or economic downturn. Scarcity has ensured that gold's long-term returns have been comparable to stocks and higher than bonds or commodities; in fact, its price has increased by an average of 8% per year compounded since 1971, when gold began to be freely traded following the collapse of the Bretton Woods agreement.
What are the Options for Buying Gold?
When you want to buy gold, you have the option to buy gold bars, gold jewelry, gold rounds, or gold coins from sovereign mints and/or precious metal refineries.
Options for buying gold include:
- Gold Bars
- Gold Coins or Rounds
- Gold Jewelry
Gold is extremely rare; a miner is more likely to find a five carat diamond than a one-ounce nugget of gold. Even mining all of the oceans in the world would yield only 10 parts of gold per quadrillion though they are estimated to hold up to 15,000 tons of gold. Buying gold is much easier than finding gold.
Generally, non-legal tender gold bars are cheaper than legal tender coins by a few dollars per ounce. Clients seeking to purchase gold for the least possible price favor gold bars. The larger the bar, the lower the premium per ounce. Gold bars issued from government mints are IRA eligible and the IRS requires precious metals dealers to file a 1099-B form when repurchasing gold bars in increments exceeding 32 ounces per transaction.
Around half of all gold mined today (49%) is made into jewelry, which remains the single largest use for gold. For those who have decided to purchase coins, there are several factors to consider when making your purchase. For example, from which mint should you buy your gold?
What are the World’s Top Sovereign Gold Mints?
Clients purchasing gold coins from Texas Precious Metals may choose coins from among those minted by several of the world’s most reputable, internationally recognized mints, including the United States Mint, the Australian Perth Mint, the Austrian Mint, and the Royal Canadian Mint.
Six top sovereign mints in the world:
- Australian Perth Mint
- Austrian Mint
- British Royal Mint
- Royal Canadian Mint
- South African Mint
- United States Mint
What is the Price of Gold?
The price of gold fluctuates depending upon several factors. Calculation for premiums on gold coins vary depending on current bullion market supply and demand ratios, the type of bullion products being sold, the level of government bureaucracy and taxation, and local, national, and global economic conditions.
Factors affecting the price of gold:
- global commodity market rates
- sellers’ premiums
- supply and demand equilibrium
- taxation rates
- economic conditions
The price for each ounce of bullion consists of the metal’s spot price and the bullion premium.
- The spot price is the current price per ounce exchanged on global commodity markets.
- The bullion premium is the surcharge over the bullion’s current spot price, comprised largely of the minting cost of production.
Several coins, like gold bars, are subject to 1099-B reporting requirements when selling in increments of 25 ounces or more per transaction; these include the Canadian Gold Maple Leaf, the South African Gold Krugerrand, and the Mexican Onza. All other coins are exempt from 1099-B reporting.
The Texas Mint offers the Texas Gold Round for those wishing to purchase gold coins for the lowest possible premium and without being subject to 1099-B reporting.
What is the Difference Between a “Round” and a “Coin”
Some clients prefer the “official” designation of a sovereign coin, while others prefer to acquire gold in coin form at the lowest cost. It is a matter of personal preference.
Differences between a round and a coin:
- sovereign minting vs. private minting
- legal tender vs. non-legal tender value
- design varieties
A round is a privately minted, non-legal tender medallion in the size and shape of a coin. In contrast, a coin is a product minted by a sovereign mint and it has legal-tender face value. Both options offer the same weight, form factor, and purity (ranging from .999 to .9999 pure depending on product). The round, however, tends to sell at a lower premium because private mints are not subject to the same financial burdens — and taxation — as sovereign mints.
Brief History of Gold Coins
Gold coins were first struck in the Western world around 550 BC on the order of King Alyattes (r. 619-560 BCE) of Lydia (in modern-day Turkey). With a design on one side only, the Lydian Stater circulated as currency in many countries before the introduction of paper currency. Even after paper money was introduced, its value remained explicitly linked to gold, for it could always be exchanged for gold upon demand.
Despite the proliferation and variety of world currencies (including virtual) and the changing position of gold in the international economic system, gold coins have retained their popularity and value because they are portable, non-perishable, difficult to counterfeit, and have universally recognized value. Julius Caesar, for example, gave 200 gold coins – equal to 27 years’ pay! - to each of his veteran legionnaires in celebration of victories in the Gallic War.
Which is the Best Gold Coin to Buy?
The most popular gold bullion coins in the world are American Gold Eagle coins. Your reason for buying gold coins is likely independent of popularity, however, so the best gold coin for you to buy is the one which:
- is most pure
- is most simple to buy
- fulfills your preference for aesthetic design
- best serves your financial investment purpose
- provides the best return on investment when resold
Coins purchased as gifts or collectible investments are often chosen because someone prefers their design; scarcity and demand also determine which coins are considered most collectible at any given point in time. Every year, both private and sovereign mints produce new coins with unique design variations, some of which are minted only for a limited time, thereby influencing their value and availability.
Texas Precious Metals also offers several others of the world’s Top-Selling Gold Coins, notably the Australian Gold Kangaroos by the Perth Mint, the Austrian Gold Philharmonic by the Austrian Mint, the Canadian Gold Maple Leaf by the Royal Canadian Mint, the South African Gold Krugerrand by the South African Mint, and the American Gold Buffalo Coin by the United States Mint.
What are Graded Coins?
Graded coins are coins that have been evaluated by a third-party grading service in order to certify the coin’s condition using a generally accepted scale ranging from 1-70. The two most popular grading services are NGC and PCGS, and they certify both modern and vintage coins. Graded coins are subsequently mounted inside tamper-proof hard plastic cases commonly known as “slabs” with a unique serial number archived in the company’s database.
What Gold Coin Sizes are Available?
Most gold coins come in the following sizes:
- 1/20 oz.
- 1/10 oz.
- 1/4 oz.
- 1/2 oz.
- 1 oz.
In 2007, a coin 53 cm across was cast; valued at approximately $1 million then and $4 million today, it held the world record for largest gold coin ever created until the Perth Mint cast one measuring 80 cm in diameter, weighing one ton, in 2012.
Gold coins from Texas Precious Metals are offered in a variety of sizes, from 1/10 oz to 1 oz denominations. The most commonly purchased gold coins are 1 ounce coins.
What are Current Gold Coin Prices?
The U.S. Mint charges a minimum of +3% over spot for each Gold Eagle coin they strike and sell to the world’s bullion dealer network.
Current gold coin prices depend upon:
- the current gold spot price
- your seller’s premium
- world economic climate
- geopolitical conditions
- federal monetary policy
Although the prices of precious metal products fluctuate with the commodities market every 20 seconds, the price of gold, generally speaking, is less volatile than the price of silver. It changes constantly but is independent from the stock market and other money markets. However, stock market shifts, inflation, and elevated recession indicators can affect gold coin prices. Federal monetary policy and the global economic climate affect gold prices the most but elections and geopolitical volatility periodically influence precious metal price fluctuations, as well.
Texas Precious Metals’ mission is to provide value to customers through passionately devoted customer service, low premiums, superior products, and easy ordering. Pure and simple.
Why Texas Precious Metals Gold Rounds?
Texas Mint Gold Rounds sold by Texas Precious Metals are superior because they are:
- 30 mm in diameter and 2.79 mm thick
- one troy oz.
- made of .9999 pure, fine gold
- guaranteed to have the specified weight and purity
- beautifully rendered, featuring the Texas State Capitol
- the least expensive gold medallion on the market
- IRA eligible