Value of Gold Bullion Coins
Bullion coins by classification are the coins minted for investments and not for passage. They are valued for their precious metal make pleased rather than for their numismatic value.
The value of gold bullion coins in its essence is the gold value of a coin plus the premium. The gold value varies with the time of course but it is what it is on the gold market, which is around $30 per gram at the present. The premium on the other hand is a very subtle theme and can be affected by many factors. And we're going to have a look at some of them.
One of the most usual factors is the coin grade. This one can be split into the coin end and the coin grade itself. The end for gold bullion coins can be either brilliant uncirculated or proof. Proof coins ordinarily have higher premium than their brilliant uncirculated counterparts. The grade of a coin is in the end its shape up. And of course, better shape up means higher premium. The grade can vary from PO-1 (pure) to MS-70 (exact) for normal coins and from PF-01 to PF-70 for proof coins.
Another factor that can affect the value of gold bullion coins is the coin mintage, or the number of coins issued in any particular year or in total. This one is not as crucial for bullion coins as for normal ones because ordinarily bullion coins are minted in fantastic number, but for some coins and for some years it can be significant. It is not an issue of course for the coins that either don't have a year (which is quite rare) or have some set year in the past (like Mexican Pesos or Austrian Ducats).
And the last factor that can affect the value of gold bullion coins is really the size of a coin. It may sound odd, but smaller coins ordinarily have higher premium.
The first modern gold bullion coin was the South African Krugerrand minted in 1967 and weighed just so 1 troy ounce (31.10 g). The value of the coin was in the end its gold value plus very small premium (3-5%). As the coin proved to be very well loved, other countries started minting their bullion coins and at the later years started producing coins as fractions of the troy ounce - half ounce, quarter, tenth, and finally twentieth, which is just about 1.5 g. The premium of the latter one can be up to 50% of the gold value. So, if you're plotting on investing into gold bullion coins, consider buying larger ones.
Author: Misha Kerogazov
Shape up Source: EzineArticles.com
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