Buying bullion coins is a great way to save and multiply your savings by investing money in precious metal of the highest quality. Such coins do not have historical value, but they look beautiful and displayable. They are minted in large circulations. That’s why the worth of bullion coins depends not on a face value, like collectors ones, but on the weight of a coin and the price of precious metals on the market.
What is a bullion coin?
The State Central Bank of the country issues the bullion coins. The order is transferred to a manufacturer, where it is carried out by a simplified technology. Gold and silver coins are minted by using Uncirculated (UC) technology – usual quality, simple image, homogeneous texture. Due to the machine production, some items may have scratches, but this does not affect the final cost. The coins are placed in special capsules to protect them from damage (it is not recommended to open them).
Do you know?
Bullion coins are issued not only in the form of a circle. There are the rectangular Sochi 2014 Olympic Games coins .
The distinctive features of the bullion coins are:
- metal;
- name of the issuer;
- fineness;
- exact weight;
- year of minting;
- face value.
The face value of a coin can be small (1, 2, 5, 10 cu) or large (25, 50, 100, 200 cu). It depends on the weight, which is usually indicated in ounces. However, the face value is a conventional symbol. The price for buying/selling is defined according to the market cost of the metal (the rate is set by the Central Bank) every day.
Do you know? You can rarely find a counterfeit bullion coin. The reason for that is that the cost of minting (everything from design development to specialized equipment) is much higher or is the same. You can determine the counterfeit coin by the difference in weight, thickness, and diameter. However, even if these parameters match, you need to check the sound of a coin (when you throw it against the table, the counterfeit coin does not tingle).
The advantages of buying bullion coins are:
- great way of saving money (precious metals always grow in price);
- opportunity for investment (real profit is achieved after 5 years);
- easy and convenient storage (no need for a bank cell or safe);
- it can serve as an object of the pledge (secured loan);
- aesthetically pleasing hobby (some coins are valuable when the circulation runs out).
Do you know?
The silver coins, dated 1964 and earlier, were sold 3-4 times more expensive than its face value until recently. Today its price has grown in 9 times.
Types of bullion coins and their differences
Bullion coins are minted from precious metals. The preference is given to gold and silver, less often to platinum or palladium. Buying silver coins is less profitable because the growth of this metal is unstable. The investments will bring a significant profit if you buy silver bullion coins in a large batch. Besides, silver oxidizes in air, eventually darkens and dims, and this feature reduces their price.
Do you know?
One of the most important criteria for buying a bullion coin is that its cost should be from $ 1,000 to $ 2,000. According to the research, the profit from this kind of a purchase is going to be 28% and higher.
The items are classified according to the level of worth:
- commemorative, coins of Proof quality, issued in limited edition, with a detailed design;
- bullion, coins of Uncirculated quality, produced in large volume, with a symbolic design pattern.
The commemorative coins are minted in honor of anniversaries and important events. For example, a well-known series of Australian dollars dedicated to the Olympics in 2000 or the Lunar calendar, the Russian Cosmos series, the American Silver Eagle, are in demand. These items are harder to find. For their evaluation, you are going to need some specialized knowledge or assistance from a numismatist. Often, the price for rare samples is overestimated on purpose. As a conclusion, if the goal of a purchase is profit, rather than collecting, it is better to purchase bullion copies.
Do you know?
Commemorative coins have a historical and aesthetic value. The cost of many of them does not coincide with the price of the precious metal used for their production. The collectors refer to this feature as a numismatic value and say that the price is determined by such qualities as a type of a coin, a year and place of minting, and a condition (numismatists have their own system of coins evaluation).
Bullion coins are divided by weight into:
- light (up to 4 g);
- medium (4-7 g);
- heavy (from 7 g).
The most profitable option for buying/selling is bullion coins of 4 g. The items with such weight are more expensive due to the amount of material used (70%) and the amount of work (30%), but the profit from their sale will be noticeable. It is important to remember that the success of the transaction will depend on the ability to make predictions about the exchange rate and the market price of precious metals. Often, it is necessary to wait several years (from 3 to 5).
Do you know?
Only the coins that belong to the official government structures have the investment value. The private mints also mint gold investment items and other collectibles, but their liquidity is not as high.
Popular bullion coins
For those who are just starting to study the catalogs of gold and silver coins of the world, there are some advantageous purchase options: “Chervonets” (“Sower”) issued in 1975-1989 (denomination – 10 rubles, the content of pure metal – 7.74 g), “Georgiy Pobedonosets” 2006-2010, and 2012 (denomination – 50 rubles, the content of pure metal – 7.78 g). Bullion coins of these series can be purchased at Sberbank branches. There is also a large selection of more modern options
- Australian Gold Kangaroo Dollar 2016;
- Austrian Philharmoniker 2016;
- South African Krugerrand 2013;
- American Buffalo 2006;
- Canadian Grizzly 2017;
- Chinese Panda 2008, 2011 and 2015.
The increase in the cost of these coins was from 7 to 28% from the time of their issue. First of all, the position of the countries on the world market influenced the high level of liquidity. Weight also played a significant role: all coins have the same value, equal to one troy ounce.