At the beginning of this millennium, the prices of precious metals skyrocketed to near record highs and have maintained a high value. Many first time investors have been drawn to gold, silver, and platinum as a tangible bulwark against highly variable markets. New investors often have questions about the difference between gold and silver bullion coins, and numismatic coins (rare coins). At Atlanta Gold and Coin Buyers, we deal in all of the above and are always happy to educate customers on what each can mean for their asset portfolio.
What’s the Difference Between Bullion and Numismatic Coins?
Essentially, the difference comes down to how the value is measured. Gold and silver bullion coins derive their value from the underlying metal content. Most bullion coins come in the form of one ounce coins, such as American gold and silver eagles, but other denomination coins are available, more so with respect to gold coins. As an investor, you can expect to pay a small premium over the spot price of gold or silver for bullion coins. This differs, oftentimes substantially so, from rare or numismatic coins.
Numismatic coins, on the other hand, have more factors influencing their worth. Numismatic coins are collector’s items, often older rare coins with historical value that is separate from the intrinsic value of the metal. Their value is based on the condition of the coin, its rarity, where it was produced, and to a lesser extent, the precious-metal content.
What Does This Mean for Investors?
For people looking at gold, silver, and platinum purely from an investment perspective, bullion coins are a good option, oftentimes purchased as a hedge against inflation. While coin dealers might disagree over the appropriate percentage of precious metals in an asset portfolio, they nearly all agree that bullion coins are most appropriate option for investment purposes. Rare coins, on the other hand, are a good option for those who view investing as only part of the equation—for example, people interested in numismatics (coin collecting) as a hobby or through historical interest.
Both bullion and rare coins can be rewarding; it just depends on what the buyer is looking for.