Should You Buy Gold Coins? 3 Reasons To Buy + 3 Reasons To Wait

Coin collectors and investors alike love gold coins. After all, gold represents one of the oldest forms of wealth and has remained popular since ancient times. That’s just one of the many things I find alluring about gold coinage.

Think of it this way — while countless forms of paper money and other currency have come in gone over the centuries, gold remains as “golden” as ever.

It therefore makes perfect sense to add some gold coins to your collection or investment portfolio, right?

Well, before you pony up several hundred dollars (or more) to buy gold coins, you should decide if making that investment is the right thing for you.

Here are 3 reasons to buy gold coins and 3 reasons not to.

Top 3 Reasons TO Buy Gold Coins

So, you’re thinking about buying gold coins?

Holding gold coinage in your hand is a great feeling, and even owning just one gold coin puts you in a relatively small class of coin collectors. After all, not everyone can afford to buy gold coins.

Actually, relatively little gold exists in the world — of all the gold ever mined, every last scrap of it could fit in a 68-foot cube. That means each piece of gold known to man could easily fit in the small area under the Eiffel Tower in Paris, France.

Seems like buying a gold coin (or two) is a no-brainer then.

Here are 3 more reasons you should go out and buy some gold coins:

#1 – Many classic gold coins are generally scarce.

While American Eagle gold bullion coins are common, as are many other types of bullion coins minted around the world, old gold coins are relatively scarce. Some gold coins found in a California hoard have a combined value of $10 million.

Whether you’re talking about pre 1933 American gold coins like the 1795 Draped Bust eagle and 1854 Three Dollar Indian Princess or even foreign gold coins such as the Swiss Helvetia and French 20 Franc Rooster, you can be pretty sure that there aren’t millions of other coin collectors with exactly the same pieces as you.

#2 – Gold coins make beautiful collector pieces.

Not every gold coin deserves to win the top prize for prettiest coin design ever, but it’s true that some of the best coin designs have been reserved for gold coinage. In fact, a coin commonly identified as the most beautiful in the world is the Saint-Gaudens $20 Gold Eagle, and it was minted in none other than the good ol’ U.S. of A.

Other beautiful gold coins include:

• Austrian Philharmonic gold coin; 1989-present
• United States $10 Indian gold coin; 1907-1933
• Great Britain Britannia gold coin; 1987-present
• South Africa Natura series gold coins; 1994-present
• United States Panama-Pacific Exposition $50 gold coin; 1915

#3 – Gold coins often go up in value.

Gold coins have generally increased in value over time:

• In the early 1930s, before President Franklin Delano Roosevelt took the nation off the gold standard and made it illegal to privately own most gold coins, the metal had a value of about $20.67 per ounce.
• By 1975, the first year after it became legal for Americans to own all gold coins again, the price was roughly $140 per ounce.
• After fluctuations, the price of gold sits multiples higher now than it did at the start of the 21st century.

Top 3 Reasons NOT To Buy Gold Coins

Maybe all that glitters isn’t always gold.

Sure, gold coins have some amazing things going for them, but there are some downsides to buying and owning gold, too.

Here are some things to think about:

#1 – Buying gold coins is expensive.

Let’s face it, not everyone can afford to own gold coins.

If you’re on a fixed income, a recent college grad with tons of loans, or somebody who just generally struggles to make ends meet, then buying a gold coin may not be the best idea.

The Mexican 2 Peso or South India Fanam gold coins are among the cheapest types of gold coinage you’ll be able to buy, but those are exceptionally small gold pieces.

#2 – Gold is not an investment in the traditional sense.

If you’re an investor, you probably think of something like stocks as an investment because they can pay you dividends and be reinvested.

Gold, however, doesn’t pay dividends and isn’t something that can be reinvested into something else — like stock that can be traded for shares of another company. Gold just sits in the coin collection or vault and does nothing.

Gold may or may not gain value, and it most certainly won’t pay you convenient little dividends while you own it.

#3 – Gold coins often go down in value.

Remember what I said earlier about gold coins often going up in value? Well, it’s true. They do.

But, guess what? They often go down in value, too. I could cite just about as many times gold has decreased in value as I could the times it has increased.

It’s true that gold is worth much more today than it was in 1933, 1975, or even 2015. But gold has been riding a pricing roller coaster since at least the late 1970s, when a major boom in gold prices began.

Gold reached an historic high (when adjusted for inflation) of about $850 in January 1980, then prices collapsed. By 1981, the price of gold had dropped to around $450.

Between 1981 and 1995, the spot price of the yellow metal would hover between $350 and $450, and then drop to $251 at one point in 1999. Prices would surge to over $1,000 a decade later and hang out between $1,650 and $1,800 during 2011 and 2012.

The price of gold lowered to around $1,300 per ounce a few years later and reached new records in December 2023 upon hitting $2,135 per ounce. Where will the price of gold — and gold coins — go next? Your guess is as good as mine.

The Bottom Line…

Buying gold coins for your coin collection or investment portfolio is not necessarily difficult, but you have to know who to buy from to get the best deals.

Local gold and silver bullion coin dealers are probably your best bet for getting a good (and up-to-the-minute) price on gold coins. Many online coin dealers also sell gold coins at the day’s gold price — but your local coin dealer is a great place to not only find good deals but also establish a strong collector-dealer relationship.

Whatever you do, be sure you check out the most-recent gold prices so you know how much you should expect to be paying for your gold coins.

More About Gold Coins

• 10 Commandments of Buying Silver and Gold
• Gold Coin Values
• Pros & Cons of Buying Gold Bars -vs- Gold Ingots -vs- Gold Coins