There are a wide variety of coins, rounds, and bars available for purchase at any given time.
Commodity: Gold and silver will always be in demand as alternative investments that can provide exposure to other commodities like wheat or oil through futures contracts.
Gold and silver are also liquid enough to be used in bartering transactions, which is one of the reasons they’re more popular than other commodities on the market. Historically, people buy gold and silver coins because they needed some form of money but didn’t have access to cash, checks, credit cards, or other forms of payment.
The advantage of bullion coins like American Eagles or Canadian Maple Leafs is that you’ll get the most consistent buying power for your dollar over time, but this comes at the expense of paying higher transaction fees to buy and sell them.
Numismatic Coins: Gold and silver coins are also bought by investors who wish to have rare, one-of-a-kind coins that can appreciate in value over time.
This is the type of investment preferred by investors who buy gold and silver for investment purposes rather than as a hedge against inflation.
Numismatic coins are graded according to the condition they’re in, which will determine what percentage of their original purchasing power they have. Investors who buy silver coins or gold bars are looking for the most value per ounce, so they’ll go with the product that’s closest to the spot price.
Precious Metal Rounds: A round is technically any coin-like shape produced by a privately minted company rather than a government.
The benefit of rounds is that they’ll have the same purity and size as government-issued coins, but will be easier to trade with because rounds are less likely to be counterfeited.
Rounds are typically bought by people who want silver or gold in small quantities that are comparable to American Eagles.
Gold bars are also available in industry standard sizes for investors who wish to take a more buy and hold approach.
How to choose between coins, bars, and rounds: “Gold coins” have the advantage of being recognized for their value by both private industry investors and government institutions should you decide to sell them in the future.
Silver coins are traded at a slightly higher premium than silver rounds because they’re considered collectibles.
For the most buying power per ounce, gold bars are usually sold at lower premiums than government-issued coins because they’re not considered collectibles.
Coin dealers will often offer discounts for large purchases of silver rounds, but it’s unlikely you’ll be able to find much benefit from buying them in bulk compared to bullion bars.
The advantages of buying gold and silver coins or bars are that they’re liquid, can be traded for other commodities like wheat or oil through futures contracts, have a consistent value over time, offer investors rare numismatic collectibles with the potential to appreciate in value over time. There is no one right option when it comes to investing in precious metals because everyone’s risk tolerance level varies. If you want help deciding which type of investment would work best for your needs please give us a call at 817-576-4860!