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The Definitive Guide to Investing in Gold Coins

Written By Luke Burgess

Posted April 23, 2010

Gold prices have steadily increased over 350% between 2001 and today. But the biggest and fastest moves are yet to come.

The gold market is heating up. Investment demand is soaring while supplies are thinning out.

Meanwhile, the economic policies of the U.S. have systematically sent the American economy down a road of uncontrollable federal spending and increases in debt and trade deficits. This will cause the U.S. dollar to lose value and will increase the price of alternative investments, such as gold.

The most direct and safest way to own gold is to own bullion, in the form of either bars or coins.

Many investors choose gold coins for their liquidity and beauty. But all gold coins are not created equally.

In today’s Wealth Daily we’ll look at the details to compare some of the world’s most popular gold coins. (And at the end of this report I offer another way to profit from the gold market — one that leverages the rapidly rising price of gold.)

Investing in Gold Coins

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The American Gold Eagle is one of the most popular gold coins on the market. The coin is an official gold bullion coin of the United States. It is offered in 1/10 oz, 1/4 oz, 1/2 oz, and 1 oz denominations and carries legal tender values of $5, $10, $25, and $50, respectively. The American Gold Eagle is minted in .9167 fine gold (22 karat), which is important to note because most other bullion coins are .9999 fine. The remaining 8.32% is made up of silver and copper. The gold in these coins must, by law, come from sources in the United States.

As you’ll see above, the obverse design depicts a full length figure of Lady Liberty with flowing hair, holding a torch in her right hand and an olive branch in her left. The reverse design features a male eagle carrying an olive branch flying above a nest containing a female eagle and her hatchlings.

The premiums for the American Gold Eagle are generally reasonable. But it’s important to rememeber that these coins are only 22 karat. When buying, expect to pay a premium of about 6% over gold spot prices.

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The American Buffalo, also known as a Gold Buffalo, is another official U.S. gold bullion coin. The one ounce coin has a face value of $50 and is minted in .9999 fine gold. The Gold Buffalo is the only U.S. gold bullion coin minted in 24 karat gold.

The design of the American Buffalo gold coin follows the greatly admired Indian Head nickel. The obverse features a Native American; a mixture of features of three chiefs from different American Indian tribes. Atop a mound of dirt on the reverse of the coin stands an American Bison, which commonly are referred to as buffalo.

The premiums for these coins are pretty high. The American Buffalo is a very collectable coin. You can expect to pay between a 7% and 12% premium above spot gold prices for the Gold Buffalo.

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The Canadian Gold Maple Leaf is the official bullion gold coin of Canada and is produced by the Royal Canadian Mint. The coin is offered in 1⁄20 oz, 1⁄10 oz, 1⁄4 oz, 1⁄2 oz, and 1 oz denominations and carries legal tender values of $1, $5, $10, $20 and $50, respectively. The Canadian Gold Maple Leaf is minted in .9999 fineness and is made from gold mined exclusively from gold sources in Canada.

The obverse depicts a profile of Queen Elizabeth II, along with the denomination and date of issue, while the reserve features the national maple leaf of Canada.

The premium for Canadian Gold Maple Leafs is relatively low. Investors will usually pay an average 5% premium over gold spot prices for a one ounce Gold Maple Leaf. With low premium and .9999 minting, the Canadian Gold Maple Leaf is one of the best gold coins to invest in.

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The Krugerrand is a one ounce South African gold coin produced by the South African Mint Company. The coin’s actual weight is 1.0909 troy ounces (33.93 g). It is minted from gold alloy that is 91.67% pure, so the coin contains exactly one troy ounce (31.1035 g) of gold.

The Krugerrand is so named because the obverse bears the face of Boer statesman Paul Kruger, four-term president of the old South African Republic. The reverse depicts a springbok, one of the national symbols of South Africa.

The Krugerrand carries one of the lowest premium of gold coins. Some companies I found online were selling Krugerrand’s for under 4% of gold’s spot price.

 20100416_austrian_vienna_philharmonic_gold_coin  20100416_austrian_vienna_philharmonic_gold_coin_2

The Austrian Vienna Philharmonic is struck in pure gold, 99.99% fine. The coin is offered in 1/10 oz, 1/4 oz, 1/2 oz, and 1 oz denominations and carries legal tender values of €10, €25, €50, and €100.

A design of musical instruments representing the Vienna Philharmonic Orchestra, as well as the text Wiener Philharmoniker (“Vienna Philharmonic”), can be seen on the reverse of the coin. The subject of the obverse is the great organ in the Golden Hall in Vienna’s Musikverein, the concert hall of the Vienna Philharmonic Orchestra.

Premium’s for the Austrian Vienna Philharmonic are reasonable. They range between 5% and 7%.

The fastest and easiest was to buy any of these coins:

Simply contact an online broker.

Gold coins offer a safe way to invest in gold. But for a little more leverage, and a lot more profit potential, I invest in junior gold stocks.To see what I mean, just look at some of the recent successes already enjoyed by keen-eyed investors who knew what to look for:

  • Decade Resources – 2,357% – 1 month hold time
  • Ventana Gold – 3,297% – since Jan. 2009
  • Animas Resources – 373% – 6 months hold time
  • Victoria Resources – 546% – since Jan. 2009

In the case of Decade resources, a mere four weeks on the market could have turned a $500 investment into $11,785!

I’ve found another company which could also be in for explosive gains. This play already has a sizable gold resource that’s worth 27 times the company’s market cap.

And with near-term production, I think share prices could rise over 920% in the next few months. Read my full report here.

Good Investing,


Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire