How to compare 1-ounce gold coins
When it comes to 1-ounce gold coins, they can be a prized commodity among investors and collectors alike. Not only do these types of coins offer big value in a relatively compact package, but gold has historically been a strong hedge against inflation, poor market conditions and economic and geopolitical uncertainty. As such, it makes sense in many cases to add gold coins to your investment portfolio.
But if you haven't invested in gold coins in the past, you may not know what to look for — and a hasty gold purchase could mean overpaying. So, how do you compare 1-ounce gold coins?
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How to compare 1-ounce gold coins
Be sure to compare these factors when adding 1-ounce gold coins to your portfolio:
Compare dealer markups
Gold dealers typically include a dealer markup in the price — meaning the gold price includes the spot market price and the dealer profits. And, gold dealers can determine what to charge as a dealer fee, so those fees can differ from one to the next. Start your search by comparing dealer markups on the gold coins you're interested in to find a gold dealer with a minimal markup.
Also, keep in mind that gold dealers may change their markup from time to time. So, the dealer with the lowest dealer fees last month may not be your lowest-cost option today. It's best to compare your options at the time of purchase to make sure you're getting the best deal possible.
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Compare designs
There is a wide range of 1-ounce gold coin designs to choose from — and some designs are more rare than others. The rarity can impact the price of the coin, with the rarest coins generally having the highest price tags.
This is another matter of preference. If you're interested in 1-ounce gold coins to want to diversify your portfolio with the precious metal, there's no reason to invest extra money into a rare design.
On the other hand, if you're investing in the metal and the collectability of the coin, consider how the rarity of the design plays a role in the value of the coin. You may also want to think about how the value of the collectible coins you're considering may grow over time.
Compare mints
The value of 1-ounce gold coins can also vary based on the mint. For example, 1-ounce gold coins from the Royal Canadian Mint may be more expensive than 1-ounce gold coins from Pamp Suisse.
If you're looking for the best price, look for the mint that produces the lowest-cost coins. If you're investing in the collectability factor, it may be wise to purchase coins that come from a higher-priced mint.
The benefits of investing in 1-ounce gold coins
There are several benefits associated with investing in 1-ounce gold coins:
- Diversification: Gold's value isn't closely correlated with common investment assets like stocks and bonds. As a result, you can use the precious metal to counter market risk in your portfolio.
- Inflation protection: When consumer prices rise, the price of gold tends to follow. So, investors often use the yellow metal as a way to protect the value of their investments during inflationary cycles.
- Tax advantages: You can invest in gold as part of a gold IRA and enjoy the tax advantages that usually come with retirement investing. Moreover, sales of numismatic gold coins are exempt from sales tax in some states.
The bottom line
Gold coins can offer a compelling investment opportunity. However, it's important to compare your options before making an investment. Follow the tips above when you compare your options to find some of the best deals on the market. You can start by comparing leading gold dealers here.
