Gold And Silver Bullion Vs Graded Collectible Coins: How To Decide |
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| By: Stephen Huston | ||||
Since ancient times, coins have been made to not only be consistent in value but to be aesthetically pleasing. Images of emperors and kings have graced many obverses from the first coins through today. Artists and engravers still labor to create reverse sides that will appeal to the general population. As a result, many coins have been valued for their beauty as much as their monetary value. Numismatists, or coin collectors, first became interested in modern bullion coins in the late seventies, when Canada introduced its Maple Leaf design. The South African government had already released its own gold coin, the Krugerrand, several years earlier in an effort to increase the export of local gold. Making the Krugerrands legal tender was one method of circumventing laws in effect in other countries prohibiting citizens from owning gold. South Africa's policies on apartheid, however, caused many countries to boycott products from that country, including Krugerrands. Canada did not face the same difficulties, and the overwhelming success of the coins with both collectors and investors inspired other countries to quickly resume the minting of silver and gold commemorative coins. Each nation decides whether coins will be produced in set quantities or to meet demand. For instance, Australia only produces 350,000 one-ounce gold "Kangaroo" coins annually. The design on the reverse changes each year, so serious collectors strive to obtain the coin every year. The limited production and variations on the design means that collectors can face shortages in supply. This means that they are often willing to pay a much higher premium for the coins than is warranted by the mere value of the metal. Coins are portable and easily stored in a home safe. Each producing government backs the coins' purity and weight. The portability and standardization of coins makes it much easier to sell them. Bars, even when hallmarked and accompanied by a certificate of authenticity, may be met with more suspicion by buyers. Coins are also easier to sell in that one can simply count out the number of coins he wishes to sell. Since they can be found in sizes ranging from as little as one-tenth of an ounce to a kilogram or more, sellers can easily compute how many to sell. Gold and silver have never been worthless. Even in the worst economic times, precious metals can be exchanged for goods and services long after paper currency has lost all value. As an example, after the American Civil War, the scrip issued by the Confederacy was sometimes used for kindling since that was about the most value one could gain from it. Silver and gold, however, could still be used to purchase food, pay taxes, or book transport. There is no denying that bullion bars represent an excellent way to diversify an investment portfolio, but the lack of standardization can make them more difficult to sell. Outside of the jewelry industry, most buyers prefer coins for their intrinsic value. In other words, bars are usually purchased to be melted down except for the massive reserves held by governments or corporations. Coins, on the other hand, may be passed from one collector to another over a period of several decades. Coins are appreciated as art, while bars are considered utilitarian. With the plethora of sizes available, even those with a limited investment budget can participate in collecting graded coins. The market is no longer the province of only the very wealthy. Each year, more and more investors are finding that when comparing gold and silver bullion vs graded collectible coins, the coins offer the most benefits. |
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| Article Source: http://yourfinance.co.za | ||||
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