Categorized | Gold and Silver

How to Invest in Gold and Silver Coins

Gold and silver are both rare and have high economic values and among the precious metals, these two were the only ones that were use for traditional coinage. Naturally occurring in nature in their metallic form, they can be produced with the need for extraction metallurgy making them both suitable to be used as coins. Other properties of gold and silver that made them unique include their excellent luster; higher melting points compared with other elements, not radioactive and less reactive, and have high ductility property. However, it is their high ductility property that made them easily damaged as coins for circulation. It is for this reason that gold and silver are alloyed with other metals such as manganese, to make them highly resistant to corrosion and deformation.

Gold and silver coins are also considered as numismatic items since most of them are entirely made of the precious metals. Examples of these are the current most collectible gold coins, the 22-caratgold coins, which are made of 92% gold; while the rest are comprised of silver and copper coins. These may also include the coins circulated in the United States prior to 1933, which were made of 90% gold and 10% silver-copper mixture. The Canadian Gold Maple Leaf, Canada’s official gold bullion coin, is also made of 99.999% gold, as well as the British Britannia, the Chinese Gold Panda, the Swiss Helvetia Head, and the Austrian Vienna Philharmonic.

With silver coins, those that were minted and circulated in the US and other countries prior to 1965 are of value since they were made of 90% silver and 10% copper. This will also include the American Silver Eagle introduced in 1986, and the 1982 Mexican Silver Libertad bullion coins, which were made of 99.9% silver and 0.1% copper; the Russian George the Victorious, the Australian Silver Kookaburra, and the Chinese Silver Panda. The only risk associated with minting gold and silver involves the value of the metal used, which is usually greater than the coin’s face value. This is especially true in coins with low denominations, so there is the tendency that some smelters will take gold and silver coins and melt them down for the scrap value of the precious metals.

Besides investing in gold and silver coins and bullions, other forms of investment may also include buying precious metals mutual funds. You can directly invest in gold and silver by purchasing mutual funds or ETFs or in other companies that are involved in their mining and production. With this investment, you will not be holding physical assets, but you can speculate in the industry’s fluctuations with less involvement and responsibility.

Another proven method of gold and silver investment involves buying mining company stocks, which is very similar to investing in mutual funds. Through this means you can participate in the increasing value of the mining operation as they produced significant quantities of these precious metals. However, to make this gold and silver investment more profitable, you must not invest on miners that are still in the exploration phase but opt for the more established ones that are worth buying into.

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