Investment Coins: From Hobby to Profitable Investments
Investment coins, made of gold and silver, are gaining increasing popularity among modern investors. Numismatists and bankers note a growing interest in these assets, highlighting their potential not only for acquisition but also for profitable realization.
Beyond an engaging hobby, collecting such coins has long transformed into a profitable investment. Over time, their value, whether gold or silver specimens, invariably increases.
The True Value of Precious Coins
Gold and silver investment coins evoke conflicting emotions within us. An ancient subconscious instinct provokes an irresistible desire to possess precious metal in the largest possible quantities, while a rational approach forces us to ask: 'What next?'
Not everyone understands the principles of dealing with gold investment coins and bars. It's much simpler to own gold and silver jewelry, flaunting them to each other.
Nevertheless, gold and silver investment coins possess significantly greater value than jewelry, ingots, and gold ore. Unfortunately, few seriously consider this.
The price of gold ducats, sovereigns, and piastres from past centuries is beyond doubt, as collectors in any country are willing to pay large sums for them. However, today's market abounds with silver and gold coins from recent times, which can be attractive not only to passionate collectors but also to profit-oriented investors.
Evolution of the Russian Investment Coin Market
In Western countries, gold investment coins are offered for sale in a large number of banks and dealer companies. In our country, the market for gold and silver investment coins is just beginning to develop.
Not so long ago, silver and gold coins could only be sold through pawn shops or the black market. There were no guarantees of safety or significant earnings, and the price of a gold coin at buyback centers was simply ridiculous.
Today, such goods can be sold officially through a bank, earning a real profit. However, professional coin dealers, who are becoming more numerous in the Russian market, now offer better prices than banks.
Modern Realities: Stock Market Speculation and Protection Against Inflation
Modern conditions in the market for gold and silver investment coins are far removed from medieval times. Today, no one clips the golden edges of money or rubs them against velvet to obtain precious dust.
Now, profits are made from stock market speculation and the difference between buying and selling prices. In just a few years, prices for silver and gold coins can skyrocket many times over.
Currently, due to the coronavirus crisis, investment demand and turnover for this type of asset are constantly increasing. People seek to protect their savings from inflation, and a more reliable tool than precious metal has not yet been invented for this purpose. Therefore, sales will only continue to grow.
Investor Demand and Necessary Knowledge
Currently, gold investment coins are in demand primarily among retail investors, i.e., private individuals. Some of them may acquire such goods for sums up to several million rubles. Naturally, with such volumes of expenditure, the client receives a full guarantee of quality and authenticity.
When investing in this asset, it is better to have the necessary knowledge and understand the price and demand for specific specimens. Otherwise, one will have to rely only on the price of the precious metal itself contained within the investment coins.
In this case, profit will depend on the growth in the price of gold and silver on the international market.
Global Recognition: Famous Gold Coins and Their Value
Investors are traditionally interested in metal currency recognized as legal tender by a particular state. They are not prohibited from being transported across the border.
Today, the following gold investment coins are most widely known:
- English «Britannia»
- «American Eagle»
- Australia's «Nugget»
- «Chinese Panda»
- South Africa's «Krugerrand»
All of them are made from one troy ounce of 99.99 fine gold and are legal tender in their respective states. Their real price is always higher than their face value.
For example, if the English «Britannia» has a face value of £100, it can be sold on the market today for over £1400. This demonstrates the high liquidity of these coins.
Russian Treasures: Tsarist and Soviet Chervontsy
Among Russian gold coins, the most sought after are pre-revolutionary Tsarist ten-rouble coins depicting the last Russian autocrat, as well as modern chervontsy produced before 1982.
These are in demand in foreign banks. For example, Soviet gold chervontsy can cost from $100 to $110 in Germany. In domestic banks, their price is approximately at the same level, depending on the year of issue.
This indicates that they possess international liquidity.
Silver Exceptions and Their Potential
Silver money is more often sought after as souvenirs. They did not enjoy investment demand previously, and are unlikely to in the future.
However, there are exceptions. These include certain silver issues produced in the mid-nineties of the last century in the USA, Canada, Australia, China, Mexico, the Bahamas, Seychelles, and various countries in Oceania.
There are also interesting modern issues from the Russian Central Bank that may attract the attention of collectors and investors.
Long-Term Outlook for Gold Investments
Gold coins have always been in demand. The only question is how to invest correctly and which investment coins are worth acquiring. Worldwide, the price of gold chervonets coins is as close as possible to the value of the precious metal itself, which ensures high liquidity and allows for profitable trading operations. This means that a purchased coin can always be sold for more over time.
It is worth noting that investment coins made of gold and silver in Russia currently cost significantly more than the metals from which they are made. This creates a specific dynamic in the domestic market.
Today, the Russian market features a large number of foreign coins and medals. They often surpass domestic examples in quality and are considerably cheaper.
For example, the United States has issued gold coins with Russian themes, the value of which quickly rose by 30% in the domestic market. This highlights the dynamism and growth potential in this segment.
Soviet gold and silver investment coins also have significant potential for price growth. Forecasting their value dynamics is somewhat difficult due to unpredictable dollar fluctuations.
However, in the long term, they are guaranteed to bring their owners substantial income. This makes Soviet gold chervonets attractive to patient investors.
According to analytical studies, the profit from investing in gold coins worldwide is significantly greater than from other types of investments. This confirms their status as a reliable asset.
These less profitable types of investments include:
- Acquisition of real estate
- Art objects
- Oil
- Chinese porcelain
- Precious metal bars
What else is important to know about investing in gold coins
Investing in gold coins is not only a fascinating hobby but also a serious source of income. However, acquiring just a few pieces will not make you rich.
More substantial profits are obtained by those who acquire coins in batches, which is not accessible to everyone. Among bank clients, one can often find not collectors, but wealthy investors.
Collectors are more interested in coins available at the Central Bank. Their current value is quite reasonable. Less often, people acquire large quantities of gold coins for melting.
Such buyers are always more numerous during periods of a weakening US dollar, when melting becomes more profitable.
Occasionally, one can find genuine rarities, most of whose circulation has gone abroad. Their initial value is quite high but can quickly drop if a bank releases its stagnant reserves onto the market.
Interestingly, one can make good money on the price difference of gold coins, such as the chervonets from the Nikolayev era. However, this would require going from bank to bank in search of the best conditions.
Profit from gold investment coins can also be obtained without much effort. To do this, one needs to be patient and wait for the opportune moment to sell: a weakening of dollar quotes or simply an increase in the price of the precious metal on the world market.
The fact is that the price of gold always only grows over a sufficiently long period, despite short-term price fluctuations. The collectible or historical value of some specimens also increases over the years, which adds to their appeal.
Coins vs. Medals: What's the Difference for an Investor?
When it comes to medals, this is a very specific and narrow field of collecting. Without unified cataloging, it is difficult to determine the real value of specific specimens, so the price often turns out to be inflated.
Unlike medals, gold investment coins possess enduring value. Their circulations are systematized and listed in special catalogs.
Prices for investment coins are stable, and their liquidity is always much higher than that of other investment instruments. In some cases, a coin collection can even serve as collateral for a bank loan.
The main feature of investing in gold coins is its long-term focus. Quick profits from such investments are not achievable. Significant income can be expected over a period of three years or more.
