Investing in gold coins is a smart move to attain stability in sudden market shifts. This is because physical gold prices usually rise when the value of stocks go down. However, while there are a lot of dependable firms that buy and sell these precious coins, there are also those that will do anything to rip off investors who are unaware of the specifics of trading gold.
Italy, for example, has been a victim of many dishonest gold “companies” in recent years. Alessandra Pilloni, European operations executive for BullionVault.it, reports that a lot of cash-strapped Italian families have sold their unwanted gold, with the crisis reaching a turning point in 2012. Because of this, many unregulated “cash-for-gold” companies have appeared out of nowhere and bought the jewelries at below-average prices.
As such, it is very important to be aware of some things before you start buying or selling gold. Here are some guidelines to help you make a wise investor:
Check the most current price of gold coins
Gold prices fluctuate on a daily basis so make sure to regularly check the precious commodity’s price graph. When purchasing coins, buy the ones with one-ounce gold in them and avoid those with the fractional values (1/10th, 1/4th, and 1/2 ounce). This is because coins with fractional gold pieces have a higher premium rate over the one-ounce ones. Also, if you’re trying to save on costs, remember that South African Kruggerrand gold coins are much cheaper than the American Eagle and Canadian Maple coins.
Do a background check on the reputation of your gold dealer
This may be cliché, but you’d be surprised to know that a lot of investors neglect doing background checks of gold firms. As mentioned earlier, a lot of Italian families have been ripped off by dishonest gold sellers because they didn’t do background checks. Unmarked gold gets seized by a country’s customs and you may run into trouble if authorities catch you holding illegal gold coins. Check with the Better Business Bureau to see a gold firm’s reputation. You could also check if a company is an authorized gold dealer by searching for them in Money.org’s database.
Avoid rare coins
This is for people who are thinking about buying rare gold coins. Stay away from them. Unless you’re a coin collector, rare coins aren’t worth it. These coins cost thousands more than the usual gold bullion coins even if both have the same quantity of gold. Not a lot of people buy rare coins these days since most investors are after the gold value, not the coin’s rarity. If a gold firm is hard selling you rare coins, avoid that company and choose another one.