But, coin collectors around the world love to collect gold bullion coins for their numismatic interest. I definitely think that American Eagles Coins are beautiful, but I am not sure that they are going to go up in value too much. I believe that these gold bullion coins value will always be primarily derived from the value of the gold comprising such coins.

Here is what one CoinTalk reader said,

The purist answer:

My favourite bullion coin is whichever is cheapest at the time of purchase. In the UK, where silver attracts purchase tax, these are usually krugerrands, Austrian 100 corona pieces and Mexican 50 peso pieces. In the US, I understand, the same three are good value as are junk silver and silver rounds.

It is possible to remain reasonably purist and buy coins which have a reasonable hope of being more valuable on resale. In the UK, this means bullion grade, early 20th century sovereigns; in the US, I understand, this means US gold eagles.

In the UK, gold bars are harder to sell than gold coins. In the US, I understand there is a more active market, so a truly purist US bullion investor might not want coins at all.

The aesthetic answer:

Krugerrands, though good value and honestly made, are not pretty. Canadian Maples and Austrian Philharmonikers are more attractive but don’t move me. I rather like both US Eagles and UK Britannias–quite as much as I like Chinese Pandas. And the 2009 US Double Eagle does look as though it will be most attractive.

But the bullion coins I find the most pleasure in owning are the Australian Kangaroos and Kookaburras. The 2oz sizes of these are particularly striking.

I couldn’t agree more with this readers first statement.  If you want to invest in gold bullion coins, buy the cheapest gold bullion coins you can find.  Remember that the reason why you are buying gold bullion is to own gold.  That is you are trying to convert your paper currency into a hard asset.  If doesn’t really matter what the gold looks like as long as it is liquid.

Having said that, I also like to collect gold bullion coins.  But, when I am buying gold bullion coins as part of a collection, my goals are different.  I am not looking to convert paper money into gold for the sake of owning gold.  Instead, I want to add it to my coin collection.  If I had to pick one gold bullion coin as my favorite, I would pick the 2006 American Buffalo Gold coin.  That is an absolutely beautiful coin.

What is your favorite gold bullion coins?

The American Buffalo Gold Coins don the design of James Earle Fraser’s buffalo nickel.  The gold buffalo coin obverse design is a portrait of an American Indian.  The reverse design is an American bison.  James Earle Fraser’s buffalo nickel was first minted in 1913.  Since then, it has been a favorite among coin collectors.  In fact, it might be the most beloved coin design on a US coin.

American Buffalo Gold Coins Obverse

American Buffalo Gold Coins Reverse

However, I think that most of these gold market price talking heads would have predicted that we would see larger price increases in January.  But as of today the current gold market price is $915.  We have a long way to go before gold is at $2,000 an ounce of gold.

Here is a great video about currency manipulation and its effects on the current gold market price.  Additionally, there are some great gold buying tips provided for buying gold bullion, including  gold buffalo bullion coins, gold american eagles and other gold bullion coins.  If you would like to read more about buying gold bullion coins, here is a previous article on buying gold bullion coins.  Otherwise, enjoy this great gold market price news video.

Why Do People Buy Gold Coins?

People buy gold coins for various reasons, but here are the best reasons to buy gold coins:

• Gold coins are liquid assets that can be resold quickly.
• Gold coins are not subject to foreign exchange rate fluctuations.  Gold owned in the United States is worth the same as gold owned in India.
• Investing in gold bullion acts as a hedge against inflation.  If the value of the U.S. dollar decreases, that means that it would cost more U.S. dollars to buy the same amount of gold.  Therefore, if you owned gold bullion coins, those coins would be worth more U.S. dollars if the value of the U.S. dollar weakens.
• Because gold acts as a hedge against inflation and foreign exchange rate volatility, it also protects owners from political instability and it  s effects on the value of money.

What are gold bullion coins?

Gold bullion coins are gold coins that derive their value from their gold content and the price of gold.  Gold bullion coins do not derive their value from scarcity or condition.  People buy gold bullion for the price of gold, but as collectibles.  Unlike St. Gaudens Double Eagle gold coins, bullion coins are not rare.

Gold Bullion Coins From Around The World:

American Eagle Gold Coins

American Eagle Gold Coin

American Gold Eagles for Sale on Ebay

South African Krugerrand Gold Coins

Krugerrand Gold Coins

Krugerrand Gold Coins for Sale on Ebay

Canadian Maple Leaf Gold Coins

Canadian Maple Leaf Gold Coin

Canadian Maple Leaf Gold Coins for Sale on Ebay

Mexican Gold Coins

Gold Mexican 50 Pesos

Mexican 50 Pesos for sale on Ebay

China Panda Gold Coins

China Panda Gold Coins

If you are interested in reading more about China Panda gold coins, here is an article on collecting panda gold coins.

Panda gold coins on sale on Ebay

Australian Kangaroo Gold Coins

Kangaroo Gold Coins

Kangaroo gold coins on eBay

Russian Gold Coins

Russian Gold Coin

Russian gold coins on ebay

British Sovereign Gold Coins

British Sovereign Gold Coin

British sovereigns on sale on ebay

Austrian Philharmonica Gold Coins

Austrian Philharmonica Gold Coin

Philharmonica gold bullion coins on ebay

I hope that this buying gold bullion coins article provided you with a helpful primer on buying gold bullion and investing in gold coins.

On the panel is Peter Schiff, Jerry Boywer, Debra Brede, and Kevin Kerr.  Peter Schiff and Jerry Boywer are the most bullish on the 2009 price of gold.  The reason that they give for their bullish gold market price is that they believe that the United States in entering into an inflationary period and the U.S. economy will continue to struggle.

While I like collecting coins, I sure hope that they are wrong about the economy.  A rising price of gold is great for gold coin investing, but if the economy tanks I won’t be able to afford to buy gold coins.  I hope you enjoy the above gold market price analysis video.

PCGS First Strike $50 American Buffalo

Many coin collectors are confused by the grading companies’ use of labels like first strikes and early releases.  The PCGS grading service uses the label First Strike on certain of its graded coin slabs.  The NGC grading service uses the label Early Release on its graded coin slabs.

PCGS was the was the first coin grading service to designate coins are first strikes.  PCGS began using this designation on 2005 and 2006 bullion coins.  The 2005 and 2006 American Eagle Coins were the first coins to be marketed this way.  And then the 2006 24-karat proof and bullion American Buffalo Gold Coins also received the designation.

When I see these coins on sale at Ebay, often the sellers highlight the fact that the coins are First Stikes or Early Releases.  But should buyers care whether a coin is a first strike or early release?

PCGS gives this designation to coins that are submitted to PCGS for certification within thirty days that such coins first go on sale from the US Mint.  Likewise, NGC also gives this designation to coins submitted to it within the first thirty days of release by the Mint.  But, is there a reason to pay a premium for the first coins “released” from the US Mint?

I don’t think that buyers should pay a premium price for first strike coins or early release coins.  But, let’s examine the topic a little more.

The US Mint I think agrees with me.  After these designations started to show up on American Eagle Gold Coins and American Eagle Silver Coins is 2005 and 2006, the US Mint release a statement concerning these first strike coins.  The US Mint stressed that its quality contol process assures that all coins are struck with good dies.  The US Mint stated,

Our manufacturing facilities use a die set as long as the quality of resulting coins meets United States Mint standards, and then replace the dies, continually changing sets throughout the production process. For bullion American Eagle and American Buffalo Coins, the United States Mint makes an average of about 6,000 coins from one die set. For proof versions of the 2006 American Buffalo Coins, the yield is an average of about 1,500 coins per die set. For proof versions of the American Eagle Coins, the yield is an average of about 300-500 coins per die set. This means that coins may be minted from new die sets at any point and at multiple times while production of a coin is ongoing, not just the first day or at the beginning of production.

With only an average of 6,000 American Eagle uncirculated bullion coins being made from each die, I would bet that the US mint has more than 6,000 American Eagle uncirculated bullion coins ready to ship when it makes these coins available for sale.  If that is the case, assuming that there is a difference in quality between the first strike with a die and the 6,000th strike,  then a “first strike” coin could be the first coin struck with a die or the 6,000th coin struck.  This designation seems to me to be a meaningless marketing ploy.

What do you think about this issue?  Should the PCGS first strikes and NGC early releases?  Are you willing to pay a premium price for them?  If you would like to read more about this topic, there is a great thread over at the CoinTalk Coin Collecting Forum.

1/2 Oz. Gold Buffalo Coin

I am very impressed by how much these products are currently selling on Ebay for.  The 2008-W Uncirculated Gold Buffalo 1 oz. gold coin has gone up in price by 50%.  The 1/10 oz. gold buffalo coin is selling for 112% more than the US Mint sold this coin for.  The 2008-W Uncirculated Gold Buffalo 4 coin set has gone up by 56%.  I am shocked by these staggering premiums.

In addition to being surprised by the premiums being paid on the above gold buffalo coins, I am confused by the price performance of the 1/2 oz. gold buffalo coins.  Unlike the huge premiums being paid for the 1 ounce gold coins and the one-tenth ounce gold coins, the premium being paid for the half ounce gold coins is only 24%.

This lower premium is not just associated with the half ounce uncirculated gold buffalo coin.  The 2008 proof half ounce gold coin, 2008 half ounce uncirculated platinum eagle, and half ounce proof platinum eagle coin all performed worse than the other fractional coins.

Does anyone know why the 1/2 ounce coins are performing worse than the other fractional coins?  I am sure there is something that I am missing here, but it is strange that the half ounce coins all did worse.