Gold: $2412.42  |  Silver: $31.24

Mistakes to Avoid When Buying Gold Coins

Mistakes to Avoid When Buying Gold Coins

In 2015 alone, gold coins with a collective worth over 50 billion USD were sold. This number is rapidly rising. If you are a professional investor or a private citizen saving for retirement, gold coins can protect your portfolio from losses incurred due to economic downturns. While that is a tempting reason to buy gold coins, it's important to be careful here. If you intend to buy gold coins in the near future, avoid making the following mistakes:

Buying Obscure Gold Coins

If you are new to the world of gold coin investment, you may not realize that highly valuable but antique gold coins have no bargaining value. You can own such coins as you would a piece of art, but they cannot be traded or put into IRAs. The IRS has a dozen or so gold coins approved for bargaining and IRAs. Know what these coins are and only buy them. As a general rule of thumb, it's safe to stick with North American gold coins like the American Eagle, American Buffalo, and Canadian Maple Leaf. Always check with official websites and experts like Lear Capital to make sure you are not buying an unapproved coin.

Buying Heavier Coins for Bigger Value

The heavier the gold coins, the bigger value they may have, and therefore would also cost you higher premiums. If you need 10 ounces of gold coins, buy them in 1 ounce coins to avoid stifling premiums. It's better to always buy 1 ounce coins and shun the others. In addition to evading higher premiums, the smaller coins are also easier to carry. Also, never buy fractional coins that are not worth the money you pay for them.

Buying without Comparing Prices

Always compare multiple dealer prices before making your final gold coin purchase. Never buy gold coins only after checking out one or two dealers. Go to precious metal exchange websites to look at spot prices posted by a number of different dealers. You must exercise caution in this regard. Don't overpay for coins with little value.

Thinking that Value would Never Change

It's easy to believe that the value of gold coins would be the same as when you bought the coins. However, there's no guarantee that gold prices today would be the same as prices next year. Value of gold is prone to fluctuation. That's why gold is not considered a commodity investment. You should only buy gold coins as a hedge against losses in case currency is suddenly devalued. You cannot build wealth around gold alone.

Buying with Leverage

Never, ever borrow money or leverage a valuable item to buy gold coins. As mentioned above, value of gold is volatile, so you may never get a return for your investment. Gold coins are not the same as cash investments. They are a form of protection, not a way to increase your overall wealth. So, buy coins with cash you have on hand. Also, do make sure to read the contract with the dealer very carefully in case hidden leverages are mentioned.

Buy gold from reputable dealers to avoid getting scammed. As the age old saying goes, all that glitters is not gold. Keep the above tips in mind and do your best to avoid making a mistake when buying gold coins.

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