Gold Coins Investment: What Every Smart Investor Should Know

SOURCE : NEW18 NEWS

Last Updated:January 16, 2025, 16:45 IST

Investing in gold coins is not something that can be done in a hurry.

By Keyur Shah

Gold, often called the “eternal treasure,” has fascinated mankind for ages. Apart from being a piece of jewel, it has become a very effective financial instrument over time. Of all the options for investing in gold, gold coins may be one of the most suitable traditions and practicality. Here is some insightful knowledge on why investing in gold is worth your time.

Why Consider Gold Investments?

Through the ages, people have collected gold and hoarded it with great enthusiasm because of its excellent intrinsic quality of holding value over generations. Gold is not a stock subject, nor is it as demanding as real estate which requires huge capital. It is a universally attractive asset that thrives even in First World economies in times of recession. Historically, gold has shown itself to be effective in hedging against inflation and currency devaluation.

For instance, during global financial crises, the price of gold increases because it is an investment that is perceived to be a haven. Apart from its stability, gold is very liquid, thus easy to sell or trade whenever there is a need. Adding gold to your portfolio not only diversifies your risk but also gives you a tangible asset.

The Unique Appeal of Gold Coins

Gold coins are an attractive option for first-time investors in the gold investment market. Coins are available in a variety of weights and denominations, giving a wide scope of choices depending on the budget. Some of the coins have historical, collector and sovereign (Govt) value attached to them, like the Indian Gold Coin or the American Gold Eagle, making them more in demand.

What to Know Before Buying Gold Coins

Investing in gold coins is not something that can be done in a hurry. Here are points to remember before investing in Gold Coins:

1. Source Matters

Always buy from reliable dealers or other trusted institutions. This ensures one gets legitimate coins with ensured weight and purity. Gold coins come in 22-karat (91.67% purity) which has to be mandatorily BIS hallmarked and 24-karat (99.9% purity) which may or not be hallmarked but comes with purity certified from credible suppliers.

2. Understand Denominations

Gold coins come in different weights, from 1 gram up to 50 grams. Above 50 gms, usually Gold is not minted as coins but comes in bullion form or bars. If one is a beginner in the investment of gold, small denominations are ideal, which can be increased slowly without straining one’s financial capabilities.

3. Evaluate Costs Beyond Gold

The gold coin is usually accompanied by charges for minting, which varies from one dealer to another. Compare all these charges before finalizing any purchase to get the best value.

4. Secure Storage

Protect your investment by keeping gold coins in a bank locker or at home safe. If one is concerned about physical storage, there’s always the modern alternative called digital gold, backed by actual gold reserves.

5. Buy-Back and Liquidity

Coins are easy to sell and hence offer better liquidity than jewellery.

6. Plan with Taxes in Mind

When selling gold, profit is always subject to capital gains tax and hence be mindful of the same.

Conclusion

Gold is not merely an investment, but a legacy that has a lasting value over time. Gold coins, being easily accessible and generally acceptable, form an excellent starting point for building gold portfolios. Buying gold coins from good dealers can ensure wealth and peace of mind.

Whether to give someone a heartfelt gift, or to diversify your portfolios, gold coins happen to be a timeless pick for all.

– The author is CEO, Muthoot Exim. Views expressed are personal.