How to Buy and Invest in Gold Coins and Bullion

Knowing how to buy gold bullion or gold coins can provide you with diversification in your investment portfolio and the ability to build a collection of gold coins that you can enjoy. There are many different ways to own gold and it can get quite confusing.

This article will help you understand the variety of options that are available and the different ways that you can buy gold coins. If you are just starting to invest in gold and gold coins, we recommend that you start slowly and learn how the market works before you commit to a major investment. We are not an investment adviser, but this article will answer your questions on how to buy gold coins.

  • 01 of 10

    Gold Bullion Bars and Ingots

    Stack of Gold Bars

    Tom Grill / Getty Images

    When most people think of gold, they think of large gold bars stored in vaults deep below the surface of the earth. In fact, gold bars come in many different shapes and sizes in order to meet the needs of different investors.

    Gold bullion bars are sold by the troy ounce and are sold in common sizes of one troy ounce, 10 troy ounces, 100 troy ounces or larger-sized gold bars. There are also fractional ounce gold bars that are available. Common sizes are one half, one quarter, one-tenth of a Troy ounce. Also, small gold bars denominated as small as 1 g are available.

    Most gold dealers will sell these bars for a percentage over the spot price of gold. The smaller the bar the larger the percentage (or premium) you will pay. This form of gold is usually purchased by people or corporations looking to make large investments in gold.

  • 02 of 10

    Bullion Gold Coins

    2006 Gold American Eagle Uncirculated Coin Obverse

    Heritage Auction Galleries

    Countries and private entities also produce gold bullion in a round shape that resembles a coin. Some of them look like coins, but they are not coins since they do not carry a monetary value. Others are considered coins, but derive their value from their precious metal content and are not intended for common circulation within a country's economy.

    Gold bullion coins come in sizes starting as small as 1 gram, 1/25 troy ounce, 1/10 troy ounce, one-quarter troy ounce, half a troy ounce, one troy ounce and as large as five troy ounce sizes. Some gigantic novelty gold coins have been made that weigh up to one troy ton of gold.

    For the small investor that is not looking to purchase gold that has numismatic value, gold bullion coins issued by a predominant country or respected private entity would be the ideal choice. These include U.S. Gold Eagles, U.S. Gold Buffaloes, South African Krugerrands, Canadian Gold Maple Leafs and Austrian Philharmonic gold bullion coins. There are a variety of sizes that can be purchased for a reasonable premium over the spot price of gold.

  • 03 of 10

    Common U.S. Gold Coins (Pre-1933)

    1913 $10 Gold Indian XF-45

    Heritage Auction Galleries

    Another way to invest in gold is to buy United States gold coins that were minted in 1933 or before. Up until 1933, gold coins circulated freely in the U.S. economy until President Franklin D. Roosevelt recalled all gold coins except those with numismatic value. Fortunately, many people did not turn in their gold coins and they are available today to collectors for not much more money than their gold content.

    For example, an 1879 $20 Liberty gold coin minted in Philadelphia has 0.9675 Troy ounces of pure gold or AGW. If gold is $1,800 per troy ounce than there is $1,741.50 worth of pure gold and it. As of this writing, an average circulated example is currently selling for approximately $1,865. This is a premium of $123.50 (or approximately 6.6%) over the spot price of gold. You can buy common U.S. gold coins that have a face value of $1, $2.50, $3.00, $5.00, $10.00 and $20.00.

    You will find that some date and mint mark combinations are rarer than others. These coins will cost more than the intrinsic value of the bullion contained the coin. Therefore, the cycles of the coin collecting market will greatly affect the value of the coin more than the fluctuating price of gold.

  • 04 of 10

    Modern U.S. Commemorative Gold Coins

    2008 Bald Eagle Commemorative Five Dollar Coin

    Heritage Auction Galleries

    In 1982 the U.S. mint resumed its commemorative coin program. In 1984 a gold coin that commemorated the Games of the XXIII Olympiad in Los Angeles was minted. This was the first U.S. gold coin minted in the United States since 1933.

    Unlike the common U.S. gold coins described above, these are not intended for circulation and carry a high numismatic premium. In other words, expect to pay a high premium over the spot price of gold that is contained within the coin. The United States mint continues to make commemorative gold coins and you can purchase them directly from The United States Mint.

    However, you are going to pay a significant premium over and above the intrinsic value of the bullion in the coin if you buy them directly from the mint. There are many commemorative coins from The United States Mint that are available at your local coin shop at a slight premium over the coin's bullion value.

    Continue to 5 of 10 below.
  • 05 of 10

    Foreign Gold Coins

    Mexico 2 Peso Gold Coin 1945

    Don’s World Coin Gallery

    Knowing how to buy gold coins can also turn up some unexpected values. There are many gold coins that also circulated in foreign countries over the years. Depending upon the gold content of the coin, available supply, and collector demand, prices can vary dramatically. Examples of these coins include Mexico 2 Pesos, Mexico 50 Pesos, Switzerland 20 Francs, Britain 5 Pound and Austria 100 Corona. Before you buy these coins consult a book on foreign coins to determine the gold content and current market values.

  • 06 of 10

    Rare U.S. Gold Coins

    1908 $20 Gold St. Gaudens No Motto Obverse

    Heritage Auction Galleries

    If you are unsure of how to buy gold coins, this is one area where you do not want to begin. Quite a few U.S. gold coins have very low mintages and high collector demand. This leads to very high numismatic premiums over and above the intrinsic value of the gold contained within the coin. For example, the same 1879 $20 liberty gold coin (mentioned above) minted in New Orleans (1879-O) has a market value of over $23,000 in average circulated condition. And has the same 0.9675 troy ounces of gold as the one minted in Philadelphia.

  • 07 of 10

    Selecting a Coin Dealer

    Coin Dealer in His Coin Shop

    The Spruce / James Bucki

    If you have decided to buy gold coins you now need to choose a coin dealer to purchase your coins from. Finding an honest coin dealer is as simple as looking for five key traits: experience, size, reputation, ethics, and guaranty. Also, ask about any restrictions such as minimum amounts, accepted forms of payment (cash, bank wire transfer, cashier's checks, personal check, company check, credit card, etc.) and when you will take possession of your gold coins.

  • 08 of 10

    Types of Dealers to Stay Away From

    Sleazy Salesman

    Joshua Ets-Hokin / Getty Images

    There are many untrustworthy individuals that will give you advice on how to buy gold coins and sell them to you at the same time. Stay away from the following types of coin dealers:

    • Online dealers selling at big discounts
    • Jewelry stores
    • Television advertisements
    • Pawnshops
    • Craigslist ads
    • Any dealer that only has an e-mail address and no physical store
    • Any online dealer wants cash or bank wire transfers only
    Continue to 9 of 10 below.
  • 09 of 10

    Price of Gold

    Handful of gold coins

    Kickers / Getty Images

    The price of gold changes by the minute and is influenced by many factors that are well beyond the scope of this article. Gold is priced internationally in U.S. dollars per troy ounce (which equals approximately 31.1035 grams). The current spot price of gold is available on the Internet through many websites, such as:

    • Kitco Metals Inc.
    • Monex Precious Metals
    • GoldPrice.Org
  • 10 of 10

    Storing Gold Coins

    Now that you have bought your gold coins and have taken physical delivery of them, you must protect your gold coins from fire and theft. If you can't store your gold coins in a safety deposit box at a bank you must take adequate steps to secure them in your home.