How can I invest in the US gold coin market? The U.S. gold coins set the temperature in the coin market; when the demand for these precious coins warms up, the price for the rest of the rare coins heats up.
The American gold coins are the Titans among the famous rare coins. But what makes an American gold coin the fancy of coin investors and numismatists alike? Here are the influential factors to the US gold coins value.
In the United States, gold coins are taxed as a collectible due to the fact that they are tangible property. Because of this, when investors go to submit their free e-file at tax time, any gold coin investments will be taxed as capital gains or losses.
The entire process is similar to that of stocks and bonds, but there are a few instances that differentiate the two categories.
• Gold content
Since the earliest times, gold has long been one of the most important metals. The intrinsic property of the US gold coinage is very appealing to every investment portfolio. When the spot price of gold in world market shoots up, the value of American gold coins rises.
• Rarity of the US gold coins
America’s gold coins minted between 1838 and 1933 are scarce because of the historical events that shaped the history of US coins. The surviving gold coin specimens today have survived two major meltdowns: first in 1834, then in 1933. After the last gold meltdown, the United States Mint stopped producing gold coins.
• High demand for American gold coins
Among the 100 million pre-1933 gold coins minted, only 5% of it found its way to the numismatic market. Such low supply is coupled with a high consumer demand. Gold coin investors and gold coin collectors clamor for the remaining American gold coins.
So how can I start investing in American gold coins?
For years, gold coins investment has reaped enormous profits. The spot price of gold is constantly going up and gold coins have been used as hedge funds. This is the same reason why investors stock up on junk silver coins.
Here’s how you can earn profit from your United States gold coins:
• Research on the market cycles of American gold coins
In general, the coin market is volatile. The value of gold coins can rise steeply and then drop immediately. Do your homework about the price performance of US gold coins by reading numismatic magazines and newsletters like the Greysheet and the Bluesheet.
When in doubt, you can always check the Certified Coin Exchange (CCE) for the latest buy and sell price of a US gold coin. Better yet, talk to a coin dealer. They have the inside information about the US gold coin market.
• Determine which gold coin suits your needs
If you are buying for a coin’s precious metal content because of the rising gold price, then the US gold bullion coins are the ones for you. On the contrary, if you are acquiring gold coins because you collect them for their numismatic value, go for the pre-1933 American gold coins.
Keep in mind that numismatic gold coins are still dependent of its coin grade. On the other hand, gold bullions do not need to be graded.
• Feel the gold coin market temperature
Even if it’s your first time to invest in US gold coins, don’t get scared in taking chances. However, investing is not a shot in the dark that is why you need to be familiar with the dynamics of the American gold coins value.
As a gold coin investor, the bear market is at your advantage. When the economy is low, people start to sell things. This is the time gold coin prices cool down, and the best time to acquire gold coins. In time, when the economy picks up its pace and the bull market sets in. Gold coins become a hot commodity once again and you can make a big profit when you cash out your gold coins.
But you also have to keep in mind that there is a bigger market for United States gold bullions than the numismatic gold coins.
• Buy from certified American gold coin dealers
Purchasing gold coins is quite risky. Avoid getting duped by US gold coins sold online. It’s still best if you make your business transactions in person.
When an online becomes necessary, research about the seller’s background and ask references from other coin collectors.
The mode of buying gold coins is also determined by the type of coin you purchase. American gold bullion coins are regulated by the federal government. You need to fill out the Form 1099-B to certify your ownership of the bullion. Numismatic gold coins can be purchased privately.
I am passionate about the historical, cultural, and artistic aspects of currency. I collect coins and banknotes from various countries and time periods, focusing on specific themes, time periods, or regions that I find interesting. I also love to study the historical context of the currency that influenced coinage and currency issuance.