Today’s gold market has reached moth-to-flame levels, with hoarders and savvy investors alike lining up to take home their share. The heavy investing in recent years had to reach its ceiling, and it did. Even so, there are those who claim that gold has lots of room to shine in the near and distant future.

The days are gone when most sane precious metal owners hid their gold coins and bullion in padlocked treasure chests, then sat around with a shotgun to guard them. The U.S. government has created stringent regulations around the ownership of gold in IRAs and 401Ks, forcing the account holder’s gold to be held in a government-approved depository.

Owning physical gold coins provides a psychological kickstart to the investor who loves precious metals. It can be described as being comparable to the adrenaline rush a pirate might have gotten in the past, running his hands through the gleaming treasure. Today’s gold-lover is in for a few irritating challenges, however.

Potential Problems with Gold Coin Ownership

1. Keeping physical gold coins forces the holder to find and maintain a safe place for them. If it’s in a safety deposit box at a bank, then the owner must pay the rent on that box every year.
2. In times when the value of gold slides or remains stable, the owner is losing any interest he or she might have gained with another kind of investment.
3. Liquidating the coins sometimes generates augmented charges exacted by the dealer.
4. The wise investor holding physical gold should buy insurance on it, which dilutes the intrinsic return on its value.
5. There is the possibility of confiscation by the government. It has happened before, after the Great Depression in 1933, when Franklin D. Roosevelt signed into law Executive Order 6102. The gist of the order was that anyone owning physical gold would be subject to outrageous fines or ten years in prison. No one knows what the future will bring, and gold confiscation, while possible, seems unlikely to many financial experts.

Given all the hoopla surrounding gold coins, it may seem surprising that so many investors would want to own them. But buy them, they do, in increasing quantities, for several good reasons, some of which are outlined below.

Good Reasons to Go for the Gold

1. Buying gold coins, or gold in any form, can give the owner a comfortable hedge against inflation, political chaos, or abrupt losses in the dollar or the stock market.
2. Precious metals are a favored addition to any well-balanced financial portfolio. Their value tends to rise as the value of the dollar and other commodities falls. This adds stability to the investment account.
3. Owning gold coins and bullion need not be a physical act. Rolling over an IRA or 401K into an account that includes gold held in a depository is fast becoming one of the most popular ways to save.
4. There are many well-established mints, dealers, advisors, and trustees to choose from to help you establish your gold coin ownership, in whatever form you choose.
5. The value of gold has soared before, and it has the potential of doing so again.

Gold Bullion Coins

Gold bullion coins are some of the most sought-after gold investments, and are almost always legal tender. They come with a certificate of authenticity and a maker’s mark, comforting evidence that they are what they appear to be. Although ownership of gold bullion was illegal in the United States from 1933-1974, that is thankfully a thing of the past.
If you’re in the market for gold coins, be sure to buy from a creditable dealer, and consider the premium along with the spot cost. Contact us if you have any questions.

Sources:

Gold Eagle: http://www.gold-eagle.com/editorials_04/willis112804.html
Only Gold: http://www.onlygold.com/faqcenterpages/faq_legalissuesandgold.htm
Lew Rockwell: http://www.lewrockwell.com/blumert/blumert87.html