Investing in grade coins made of precious metals is a reliable way to preserve and augment your capital. The present day economical and geopolitical situation creates prerequisites for growth of the prices for gold, both in short-term and long-term outlook. Purchasing gold coins allows you to diversify your investments, while the wide assortment of investment coins, their guaranteed authenticity, along with the ease of their storage and transportation, make this kind of investments so much attractive.
What are investment coins?
These are coins made of precious metals and issued by banks. On every coin, one can see either its physical weight or the weight of the chemically pure precious metal in the coin composition (normally in ounces). Investment coins can be made of gold, silver, platinum, or palladium. A coin may also have a nominal value indicated on it, but its actual price is determined by the cost of the material it is made of.
Is there any difference between investment coins and collection ones?
A lot of. First, the number of copies: collection coins are issued in hundreds or thousands of copies, while investment coins may have hundreds of thousands or millions of copies. The embossed pattern is also different: investment coins may have beautiful and extraordinary patterns, but they are still plainer than the elite patterns of collection coins.
The difference in the initial investment is important, too: at the first purchase, the price of an investment coin is 1% to 10% (not so often up to 25%) higher than the cost of the metal it is made of. But a collection coin may initially cost five or more times as much as the metal.
It is quite simple to foretell how much investment coins are going to cost in the future, for their prices will grow in proportion to the cost of the precious metals. But the prices of collection coins are formed in a much more complicated manner, because they are made up of a big number of absolutely unpredictable factors, which are often evaluated subjectively as well.
Besides, investment coins are never classified as a commodity, unlike collection ones. So transactions with investment coins never lead to the obligation to pay any extra taxes.
Why is it profitable to invest in minibullions and coins?
- Your savings are insured against inflation.
- Bullions are purchased anonymously.
- It never occupies too much space and easy to transport.
Is there any sectoral division in the coin market?
There are two sectors: collection coins and modern ones. The first one is for antique stuff; the other is for coins minted not so long ago.
Whom do we recommend to invest in coins and minibullions?
We definitely recommend it to conservative investors preferring things that can never become less valuable.
We recommend it to those who do not expect any instant profit, as coins and bullions represent long-term investments, for their price is always growing, but quite slowly. The short-term position in this market is one or two years. Hence, we also recommend investing in coins to those who are going to play for the future and prefer to develop long-term strategies.
Please click here to consult the Risk Warnings.
All investments involve risk – Investment Grade Coins are no exception. The value of a coin or bullion coin is affected by many economic factors, including the current market price of bullion and the perceived scarcity of the coins and other factors. Some of these factors include the quality and current demand and general market sentiment. Therefore, because both bullion and coins can go down as well as up in value, investing in them may not be suitable for everyone. Since all investments, including bullion and coins, can decline in value, you should understand them well, and have adequate cash reserves and disposable income before considering a bullion or coin investment.
The following lists indicate such risks as FXFINPRO Capital considers material. It does not constitute a statement of all possible risks.
Gold and silver price movements — You are exposed to the risk of potential loss arising from a falling bullion price during the time in which you own coins and bullion. This risk is not a responsibility of FXFINPRO Capital.
Money politics — Governments and other agencies seeking currency stability, or for other reasons, might seek to constrain or tax the ownership of coins and bullion to the disadvantage of its owners. FXFINPRO Capital provides for multiple locations from which you may choose one or more. The actuality or fear of government action might affect the value of coins and bullion stored in a given location. This risk is not a responsibility of FXFINPRO Capital.
Bank insolvency — Your cash balances at FXFINPRO Capital are deposited in segregated client accounts at a highly rated bank, but your money's safety is dependent on bank integrity. All banks are subject to possible failure. Depending on a number of factors in the event of bank failure you might be entitled to receive compensation from appropriate authorities, but the terms of such compensation are complex and the timescale for receiving compensation might be long. This risk is not a responsibility of FXFINPRO Capital. [Note that when your money is used to buy coins and bullion your exposure to bank insolvency ceases.]
Identity theft — If your FXFINPRO Capital account number and password are compromised, you are at risk of unauthorized access to your account.
Liquidity risk — The risks associated with a lack of immediate liquidity due to your investment in coins and bullion are not a responsibility of FXFINPRO Capital.
System availability — FXFINPRO Capital's computerized machinery, which is accessed by you across the internet, might become inaccessible for periods of time. This could prevent you from executing a transaction which you would otherwise have made. This risk is not a responsibility of FXFINPRO Capital.
Insurance exclusions — As your property, your coins and bullion may be subject to insurance exclusions imposed by insurance underwriters in line with established insurance practice regarding the physical protection of your coins and bullion. These excluded risks will be presented on the evidence of insurance published on the FXFINPRO Capital Website and include events like nuclear war. These risks are not a responsibility of FXFINPRO Capital and are risks you undertake with respect to your coins and bullion, except that no exclusion absolves FXFINPRO Capital in undertaking its correct duties of care in arranging the security of your property to levels considered commercially acceptable.
Force Majeure — The risks resulting from Force Majeure events are not a responsibility of FXFINPRO Capital.
It is more profitable to invest in big coins than in small ones. For example, if a coin weighs less than 4 g, the production cost and the profit built into the coin by the manufacturer and traders make a too high percentage of the cost of the metal with the same weight (above 20% or 25%). Considering that the main weight unit for coins is the troy ounce (XAU stands for a troy ounce of gold in the international system of measurement), we can assume that gold coins are profitable if no lighter than 0.16 XAU (5 g), or better if 0.2 XAU (6.22 g).
Investing in coins, if we do not speak of really big investments of lots of thousands of dollars, is always a long-term project for a period no shorter than a year. The cost of gold may grow more rapidly due to corresponding devaluation of the major currencies caused, for instance, by an economical crisis, which can hardly be favorable for efficient investments. So one should think of investments made for a period of 18 to 24 months and longer. Of course, you will have to calculate by yourself the approximate profitability period that will satisfy you for each coin you decide to buy. You can do it on the basis of the forecasts for the growth of the prices for precious metals and the growth of the collection value of a particular coin.
Study the history and the dynamics of the price variations for investment coins at dedicated web portals, forums and other online resources. This will allow you, as an investor, to keep yourself well informed about the actual cost of your investments and not to miss the peaks in the price growth or demand for the coins you have.
When handling your investment coins, never touch them with your hands. The remaining fingerprints are practically impossible to remove, which might reduce the price when selling the coins. Banks use special instruments for handling such coins (weighing, visual examination): gloves and soft-tipped tweezers. An ordinary investor does not usually have instruments of that kind, so it is strongly recommended not to open the transparent plastic capsule containing the coin.
You can leave a request for purchasing of investment grade coins in your Personal Profile.
You can leave a request for purchasing of gold minibullions in your Personal Profile.