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“Five Key Factors for Buying Gold Coins”

Updated on April 14, 2015

I would encourage anyone seeking long term financial security and a hedge against currency inflation to think about Certified Low Mintage Gold Coins as a viable investment. This tangible commodity has prospective long term benefits, as well as the possibility to safeguard your wealth and protect your purchasing power.

Assets, such as gold has a limited supply, as well as a significant demand that has been a time tested method for wealth preservation since ancient times. The purpose of gold coinage was created to enable commerce and standardize trade among various merchants.

Gold coinage began in Asia Minor, in the Kingdom of Lydia, which lay at the edge of the Aegean Sea, which is now the coast of Turkey. Lydia, the Iron Age Kingdom was first to strike and produce coinage around 650 B.C.The gold stater pictured below was struck under King Croesus between (561 – 546 B.C.)

Bringing the concept of wealth preservation to modern times; gold allows you a medium to be able to safeguard and protect your purchasing power.

As you consider this investment of purchasing Certified Low Mintage Gold Coins, it is important to consider Five Key Factors when acquiring gold coins. Pictured below is a 1900 Gold Russian 5 Rouble Certified by NGC (Numismatic Guaranty Corporation) Mint State 65. This certified coin is a prime example of how the Five Key Factors should be considered when you are looking to purchase gold coins.

The first key factor to focus on is the specific date and mint mark, the second key factor is certification from NGC or PCGS, the third factor is Rarity (Supply & Demand). The Fourth Factor is the Recognized Numerical Grade, and the final fifth factor is the Intrinsic Value. This selected 1900 Gold Russian 5 Rouble (NGC MS -65) has all five attributes that one should contemplate when buying gold coins.

It is important to have a thorough understanding of the details of the gold coin that you are considering to purchase for your collection or investment. A thorough understanding of the type and specifications, such as familiarization with lower mintage dates and mint marks. You will need to be specific with the date and mint mark of the coin you want to purchase (Factor 1).

By doing your homework and knowing specifics, you will increase your knowledge. Knowledge is power when it comes to making strategic purchases to add to your coin portfolio. Below is a certified coin on your right and a chart on your left breaking down some fundamental specification's of the 1900 Gold Russian 5 Rouble Coin.

Once you have decided upon a specific type or series of gold coins that you are interested in purchasing, you should seek to acquire only certified coins from premier grading services, such as NGC (Numismatic Guaranty Corporation) or PCGS (Professional Coin Grading Service).

Both of these firms represent the industry standard in third-party certification with the certified coins commanding a total value in the billions of dollars. They have demonstrated a consistent track record of retaining their market value pricing compared to lesser quality certification companies. I would be hesitant to invest into coins in a third tier holder such as ICG (Independent Coin Graders) or ANACS (American Numismatic Association Certification Service).

The coins they certify do not preserve the premiums compared to a coin certified by the top tier grading companies NGC (http://www.ngccoin.com/) or PCGS (http://www.pcgs.com/) (Factor 2).

Continuing to the next factor which is rarity, you should look for scarcer date and mint marked coins. They will demand premiums over the intrinsic value of common related bullion coins; and won’t fluctuate heavily on the downside due to a loss of the commodity price.

The coin being low mintage especially in higher (mint state) grades protect your asset from potential devaluation due to the rarity in the market place of the specific recognized numerical grade (Factor 3).

There is a finite supply of coins in the market place of certified coins. Exact populations for certain coins in specific grades are available for coin dealers to keep track of their inventory with Population Reports as shown below.

This particular coin graded Mint State 65 has only 524 certified by the Numismatic Guaranty Corporation. These recorded reports are put together from the major grading services (NGC or PCGS);this allows the market to be heavily controlled confining exact grades and pricing of your specimen (Factor 4).

This specific coin is one of the lowest minted coins in the series with a mintage of 31,000 but not the key date. Low mintage alone will not cause the coin to carry a substantial premium, but is a very redeemable quality.

The intrinsic value of the 1900 Russia 5 Rouble based on .1245 oz actual gold weight melts for $157.28. The intrinsic value is the market value of the constituent metal within the coin (Factor 5). The melt price fluctuates with the current traded commodity price going up or down with the market. To help give you an understanding of the Numismatic Value this particular coin sold for $397 in auction; thus showcasing the fact that is selling for $239.72 over the actual gold weight.

By considering these Five Key Factors and implementing them, you should be able to capture prospective long term benefits; as well as the possibility to safeguard your wealth and protect your purchasing power years down the road.


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*Disclaimer – This article is provided for informational purposes only. It doesn’t guarantee any particular return on the purchase of gold coins.The information provided are of the author alone, and should not be taken as expert instruction or commands.The author assumes no financial responsibility for gains or losses you may experience buying or selling gold coins.

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    • Linda Robinson60 profile image

      Linda Robinson 2 years ago from Cicero, New York

      Hello Jeremiah Just completed reading your hub about buying gold coins, nice meeting you. Your hub was very intriguing and well written including such great detail and important information. I look forward to following you and reading all of your hubs published, exceptional writing. Linda

    • canddcoins profile image

      Doug West 3 years ago from Raymore, MO

      Great article about gold coins. Makes sense.

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