Investing in gold coins in USD is a common way for investors to gain exposure to physical gold. Two of the most popular gold coin options for US investors are the American Eagle and American Buffalo. Gold coins like these are struck by the US Mint and have guaranteed gold purity content. Buying official bullion coins provides assurance around authenticity. Factors to consider when buying gold coins include the coin’s fineness, weight, design, scarcity, and collector value. Popular gold coin weights are 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz. The American Eagle and American Buffalo contain .9167 gold purity. Gold coins provide a tangible way to own gold, but also carry issues like storage and insurance costs. Overall, gold coins can be a smart addition to a diversified investment portfolio when appropriately balanced.
American Eagle gold coins are official US bullion coins backed by the government
The American Eagle gold coin is one of the most widely traded gold coins among US investors. First minted in 1986, the American Eagle is an official bullion coin produced by the United States Mint. The gold purity content in American Eagle coins is guaranteed by the US government. This provides investors with assurance around the authenticity and quality of the gold coins. The American Eagle gold coins come in a variety of sizes including 1 oz, 1/2 oz, 1/4 oz and 1/10 oz denominations. The 1 oz version is generally the most popular due to its balance between a reasonable premium cost versus owning a substantial weight of gold. American Eagle gold coins have a fineness of .9167, meaning they contain 91.67% gold purity by weight. The remainder is copper and silver to improve the coin’s durability. Given the backing by the US government, American Eagle gold coins are exempt from certain IRS reporting requirements which can make them more appealing to some investors.
American Buffalo is a 24-karat gold coin alternative
The American Buffalo is another official US gold bullion coin option for investors to consider. Introduced in 2006, the American Buffalo gold coin is sometimes referred to as a ‘pure gold’ coin because it contains .9999 fineness 24-karat gold. The American Buffalo gold coins only come in a 1 oz weight. The higher gold purity content appeals to some investors, but it can also mean the coins are softer and more prone to scratching than alloyed gold coins. The American Buffalo gold coin design features a Native American on one side and an American bison on the reverse. The US government also guarantees the weight and metal purity content of the American Buffalo. Some investors prefer the American Buffalo over the American Eagle when they prioritize owning pure 24-karat gold over the alloyed durability factor. The two coins have similar premiums, so investing in either represents a viable way to add physical gold bullion backed by the US government.
Go for reputable dealers when purchasing gold coins
When it comes time to actually buy gold coins, investors should be sure to go through reputable precious metals dealers. Reputable dealers will provide efficient customer service and transparency around pricing to help investors make informed purchasing decisions. Dealers may offer gold coins at the current spot gold price plus a markup premium to cover their business costs and profits. Investors should compare premiums across a few different dealers. Delivery and insurance fees will also factor in. Purchasing from a reputable dealer helps avoid the risk of counterfeit gold coins. This is especially important when buying common gold coins like the American Eagle or American Buffalo, which can be more prone to counterfeiting attempts. Overall, partnering with an established gold dealer that can authenticate and guarantee the coins will provide peace of mind around the investment.
Gold coins can provide portfolio diversification but also have drawbacks
Adding physical gold coins can potentially help diversify an investment portfolio. Gold may behave differently than stocks and bonds during times of market volatility and economic uncertainty. But gold coins do come with some drawbacks to consider as well. There are storage costs associated with housing physical gold safely and securely. Specialized insurance may also be required to cover the gold coins in case of theft or damage. Investors will also want to factor in the markup premium paid to buy the gold coins, which can bite into long-term gains if gold prices rise moderately. Taxes may also apply when selling gold for a profit. Overall, gold coins remain a viable asset class to research, but investors should consider their personal situations and investment timelines to construct the optimal gold allocation in a diversified portfolio.
American Eagle and American Buffalo gold coins are popular choices for US investors seeking to buy physical gold. Reputable gold dealers help provide authenticity. Gold coins can bring diversification but also have costs.