General Question

zensky's avatar

Are gold coins / medals a good investment?

Asked by zensky (13262 points ) May 13th, 2012
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17 Answers

XOIIO's avatar

Buying actual gold is one of the best investments, raw gold will be cheaper than specific coinds or medals, and golds price pretty much ges up only.

CWOTUS's avatar

“Collectibles” in general are usually not a good investment unless you’re expert (or have cheap expert advice) regarding grading and spotting fakes.

Aside from that, gold itself isn’t necessarily a good “investment”, since its value only increases relative to the collapse of the currency system that you live within. And you have to protect the asset itself, since you’ll probably want to take delivery (especially if the economic / currency system is failing). Then you have the problem of transporting the goods when you need to move; that presents its own problems.

Given those caveats, common gold coins are handy to have as a hedge against catastrophic monetary system collapse. But I wouldn’t want to bet on that, so I wouldn’t make it a centerpiece of any investment portfolio.

zensky's avatar

How about mint gold coins and medals from a Government mint?

gorillapaws's avatar

Also, be weary about the new asteroid mining venture currently underway by Google’s founder Larry Page and James Cameron. If the market ever thinks success is likely, it could totally crash the value of precious metals (even before they actually pull it off). I prefer to invest in things that produce something valuable.

lillycoyote's avatar

@gorillapaws When James Cameron and Larry Page have the “swarms of unmanned spacecraft” that the the article you link to says the company has said will enable them to engage in the asteroid mining activities they are dreaming of then, and only then, will I worry about the price of gold crashing. I’m not really interested in investing in gold, but neither am I worried that Cameron and Page will be mining asteroids any time soon and thereby causing the price of precious metals to crash, any time soon.

gorillapaws's avatar

@lillycoyote All that is of course true, but they don’t have to be successful for the market’s prices to crash, the market only needs to PERCEIVE that it will succeed in the future and the crash will happen much earlier.

lillycoyote's avatar

@gorillapaws I certainly agree, up to a point. Perception can often influence the market out of proportion to reality. But, if “the market” has any sense, and sometimes it certainly doesn’t, it will understand that mining asteroids for precious metals is something that is a long, long way off. I could be wrong, but that’s I what I think. They would need to be a lot closer to reaching their goal than they are now, in my opinion, for their enterprise to have any effect on the price of precious metals.

poisonedantidote's avatar

Yup, last year I purchased 2 for about 1000 bucks a piece, they are all ready worth about 1500 a piece, I don’t know of any bank account that offers such a return on investment.

This swarm of cash for gold businesses that has popped up must be evidence of how good an investment it is.

zenvelo's avatar

Gold is off 20% from its high price, and looking to go lower. It’s a lousy investment, because the price is based strictly on demand for gold, and not on any kind of growth in the asset, such as a stock or a business or a house that can be improved upon.

People buy gold coins because they can store the coins more cheaply and not have to go through an assay when they sell. But it is not easy to handle a large store of gold coins, and there is often a premium charged for coins.

cazzie's avatar

Many of those new gold coin offers aren’t based on the current price of gold, (which is its intrinsic value) but put some sort of premium on them that they are going to increase in value due to their future ‘collectibility’ and popular demand. It is usually a lark and at best highly speculative. We had clients throwing their money away on such things all the time and then didn’t understand why they weren’t worth what they were promised when they needed cash and wanted to sell them.

If you want to collect things that will appreciate in value, look at OLD things and the history of their appreciation and avoid ‘new releases’ with loads of gimmick, promotion and marketing around them.

The futures and precious metal markets may get a shock when they start mining the astroids, but that may take some time. They expect to find mostly nickel and iron. One way of making money on the futures market would be to bet against the trend when the astroid mining begins. If the market is betting that the prices will fall because the asteroid mining will be successful, bet against it, or vice versa. One could make a killing, but you may have to hope that they fail… and I don’t want them to fail, personally.

Adirondackwannabe's avatar

Gold is okay as an investment, but it doesn’t pay dividends or have any earnings. It’s value is all in supply, demand, and the emotions of the buyers and seller. Also, Haiti and the Dominican Republic may have discovered some huge amounts of gold, like 60 billion dollars at present prices.

cazzie's avatar

If I had the dosh, I would invest in some good sound tech stocks. Something related to the European Space Agency and their new initiative going to the icy moons of Jupiter.

gondwanalon's avatar

Gold prices have been sliding the last couple of weeks. I’m going to buy a couple ounces within the next couple of days. I’m no expert on gold investing but I know risks of the volatile gold market. I realize the risks of the and I can rest easy with them. Very important: I also know enough to not get burned in gold transactions.

I hope that buying gold coins is a good investment as I’m been buying them since 2008. When the price of gold dips a bit and I have the money I buy one or more coins. I tend to buy the one ounce size no frills bullion coins. I suggest that you stay away from specialty coins, old gold currency coins and proof gold coins who’s true value are subjective to the buyers interpretation. You will likely loose with those gold coins.

Stay away from ebay for buying gold because you will likely pay too much. Also stay clear of “Goldline” as they tried to sell me ordinary Swiss gold Francs at over 70% over spot gold price. NEVER pay more than 8% over spot melt down price. APMEX is a good place to buy gold from.

NEVER buy gold “clad” or gold plated coins. They look good but they are junk metal. Don’t buy silver coins either because according to Jim Cramer “silver is a junk metal”.

funkdaddy's avatar

It’s an over simplification, but I think this chart showing gold prices in the last 50 years illustrates some good points about gold.

When people get scared about the economy, gold goes up because people see it as an alternative investment, when they stop being scared, it returns to levels based on it’s usefulness rather than speculation.

Compare that to stocks historically or to interest bearing investments and it’s hard to see gold as the best way to go unless you have your own reasons and preferences for it.

josie's avatar

The idea of investing in gold is that it historically has intrinsic value. The idea being that when everything else turns to shit, you will be able to use your gold to buy food and clothes and stuff.
But the truth is, if things get that bad, the only thing you will really want is bullets. If you keep the gold until then, you will get your throat cut the first time you take it out to trade for food.
See @funkdaddy, second paragraph.

Response moderated (Spam)
gondwanalon's avatar

Gold will become very helpful in the event of hyper inflation of the dollar.

If everything gets as bad as @josie says then the best thing you can do with a bullet is to put one in your head. We are all screwed if things get that bad.

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