Tips for Getting Into the Gold Market
If you are thinking about buying and selling gold, then you might be a bit overwhelmed by the market. After all, there is a lot of information to process and a lot of money involved. To help you get started and to give you a better idea of how the gold market works, here is an overview of gold coins and why they are a good choice for beginners:
Bars vs. Coins
First of all, you are probably wondering about how gold is actually traded. You might have a mental image of big gold bars being transported in armored cars, but that isn't how most gold transactions are conducted, especially for the average trader. Such gold bars (they are normally 400 ounces each) have incredibly high value, which means that they are not viable for casual traders or anyone but the top 1%. Instead, you should look into small gold bars and gold coins. This article will mostly deal with the latter.
Gold Coin Overview
Official gold coins in the United States are known as Gold Eagles and come in several denominations, containing between 1/10 and 1 troy ounces of gold. Every Gold Eagle is composed of mostly 22 karat gold with a small amount of silver and copper. Somewhat related are Silver Eagles, which are the corresponding coins for silver. Many other countries have similar systems with government-issued coins, such as the Canadian Maple Leaf or Chinese Panda Gold Coin.
The most important thing to understand about gold coins is that the face value is not their actual value. The value of a gold coin is directly dependent upon the current price of gold rather than the number that is stamped on the coin. For instance, a 1 oz Gold Eagle has a face value of $50, but the gold alone is worth over $1000. Although Gold Eagles could technically be used as legal tender, it is a much more profitable idea to buy and sell them based on the price of gold.
Coins are Collectible
Bars and coins are quite similar, but there are a couple of differences, One of the most important things for a casual gold trader is the collectible aspect. You can gather coins from different countries, and many of them will have unique designs. Bars are quite unassuming small rectangles of metal that don't quite carry the same appeal to anyone interested in collecting.
If you'd like more information about buying or selling gold, contact a gold buyer like Ed's Coins.