An Introduction To The Gold Coin Market

Posted on: 26 June 2015


The world of buying and selling gold coins is a strange one. On one hand, it's a legitimate market that is practiced on a global scale, with some of the deepest roots of any commodity. On the other, it is frequently advertised by the likes of Pat Boone during late night infomercials. To help clarify the subject you for, here's the breakdown on what the gold coin market actually is and how it can help you:

What is the gold coin market?

Gold has been traded for millennia, both as an ornamental metal and as a valuable building material for high-tech equipment. When you imagine this market, it's easy to envision billionaires throwing galas and cocktail parties where they just happen to exchange millions of dollars worth of gold in a casual conversation.

However, that is not the entirety of the market and many gold traders deal in much smaller quantities of the commodity. Specifically, they deal in gold coins, which are smaller and easier to use than the gold bars that you are so used to seeing in the media.

So what are gold coins then?

Gold coins are actually quite comparable to the coins that we use everyday. In fact, these gold coins have specific face values and could be traded for their stated value, just like you would a dime or a nickel. American gold coins are known as Gold Eagles. There are several different types of Gold Eagles: .1, .25, .5, and 1 oz coins. The number reflects the number of troy ounces of gold within the coin, which is a type of measurement that is used almost exclusively for precious metals.

You would never want to trade these for face value though, because the face value of the coin actually reflects the price of gold from the 1980's, when these coins were first introduced. Since then, gold has become much more valuable in terms of absolute dollars. Because the value of a gold coin is evaluated somewhat similarly to a stock, with a price that rises and fails on a daily basis, the value of a coin can change quite a bit depending on when you are looking to buy or sell.

How does one get into the gold coin market?

It's actually incredibly easy to enter the gold coin market, and much easier than entering the stock market. All you need to enter the gold market is some form of gold, preferably in coin or bar form. You can then track the value of gold until you think you should sell your gold. If the price of gold dips low enough, you should buy more gold. Obviously, there is quite a bit more nuance to the market, but this does effectively convey the general idea. For more information, contact companies like American Precious Metals Inc.