Gold Coins: American Eagle, Canadian Maple Leaf & Austrian Philharmonic

So you’ve decided that you want to invest in gold and you’re wondering how to buy gold coins. This assumes that you want to buy physical gold to hold rather than having it stored in a vault somewhere.

How To Buy Gold Coins

It’s a lot easier today to buy gold than in the past. Before the internet came along, the only easy ways to buy gold coins was from a bank that sold them (and not all did) or you’d go visit a local coin dealer. The more adventurous might have used mail order options but would have literally been buying coins sight unseen.

Today, the easiest way to to purchase coins is online. There are many reputable merchants and vendors to choose from but before I tell you the best places to go, first I’ll talk about the kinds of coins that are available.

Weight And Spot Price

The Gold Spot Price for June 2016

The unit of measurement for Gold (and silver) is the Troy Ounce. This is not the same ounce as is used in cooking! It’s an imperial measurement which still dominates the precious metals market. For those more familiar with the Metric system of measurements, 1 Troy Ounce equals 31.1 grams.

If you check the Gold Price Chart, you’ll see that the price is quoted per Troy Ounce. At the time this post was written, Gold was trading at $1,278 per ounce. That price is called the “Spot Price” of gold and you’ll pay more than that for a 1 oz coin.

The difference between the Spot Price and the retail price of a coin is called the “Premium”. It’s usually in the 3% – 7% range and depends on a number of factors. 1oz Gold Eagle coins from the USA are selling for $1,337.56 each while the Spot Price is $1,278.

Prices will be different whenever you are reading this post as the Spot Price of gold is updated every couple of minutes and the price is currently on the rise.

A Gold Coin’s Price Depends On Who Minted It

Gold Coins From the Perth Mint (Australia)

The two most popular 1 oz gold coins are the American Eagle (U.S. Mint) and the Canadian Maple Leaf (Royal Canadian Mint). Both coins are the same weight – 1 oz – yet their prices are different. The Eagle sells for $1,337.56 and the Maple Leaf sells for $1,313.84.

One reason for the price disparity is that Gold American Eagle coins are not pure gold. They do contain 1 Troy Ounce of gold but they weigh 33.931 grams. That extra weight comes from silver (3%) and the balance in copper. American Eagles are 91.67% gold. South African Krugerrands are 92.5% gold in comparison whereas Canadian Maple Leaf coins are 99.99% gold.

Other popular 1oz coins include the Austrian Philharmonic ($1,317.43), the Australian Kangaroo, Kookaburra and Koala coins seen above ($1,320.43) and the Chinese Panda 30g coin ($1,312.18). All of these are 99.99% pure gold.

I buy the Maple Leaf gold coins because they are as pure as you can get and they’re cheaper than American Eagles.

Nevertheless, $1,300+ for a coin is a hefty amount of money to spend and outside the budget of many.

But you should keep in mind that when you acquire gold, you’re not buying it in the same way as you buy a disposable good. You’re converting today’s currency into another form of money that holds its value over time, unlike currency does. If you want to know the difference between currency and money, watch the video on this post.

Gold Coin Sizes

American Eagle Gold Coin Sizes

Gold coins come in a range of sizes: 1/20 oz coins, 1/10 oz, 1/4 oz, 1/2 oz and 1 oz. There are also 15 gram and 30 gram coins available but these tend to come from China. These may be more suitable if you’re on a tight budget.

The Smaller The Coin The More You Pay For The Gold In It

Coins smaller than 1 oz in weight are not the same fraction of the price. What I mean is that a 1/2 oz coin isn’t half the cost of a 1 oz coin. It’s more than half the cost. The smaller the size of the coin, the more you pay for the gold in it. So it’s best to buy the largest coin you can afford.

Here’s the prices of smaller coins based on the $1,278 Spot Price of gold:

Coin Price Physical Value*
1/2 oz Maple Leaf $692.95 $656.92
1/4 oz Maple Leaf $360.01 $328.46
1/10 oz Maple Leaf $145.60 $131.38
1/20 oz Maple Leaf $  88.13 $  65.69
1/2 oz American Eagle $692.95 $656.92
1/4 oz American Eagle $360.01 $328.46
1/10 oz American Eagle $145.60 $131.38

*What you’d pay for that fraction of a Troy Ounce if there was no markup on fractional coins.

What About Numismatic Value?

Commemorative Gold Coins

Some people collect coins because they like the look of them. They may have unique designs, such as commemorative coins, and/or have limited mintage. These coins are considered collectors items and command higher prices than standard bullion gold coins.

Such coins can be a good investment but you’re relying on the hope that the coin will retain its collectible value in the future and still command a premium over the then Spot Price of gold.

My opinion is to buy the cheapest, highest quality coins you can afford and put the excess money you’d pay for a numismatic coin into buying more bullion coins.

Coins From Different Years

Gold Coins From Different Years Can Be Different PricesYou may be surprised to learn that the same coin but minted in different years can command different prices. This may be due to a mint using a new design each year and some designs are more appealing to collectors than others.

To be honest, I haven’t found an answer as to why coins from different years (like American Gold Eagles) command different prices. It may be that fewer coins were minted in previous years so there is a rarity element. Or maybe it’s down to coins being of generally better quality from given years.

But dates on coins are something to keep an eye on. The only thing that really matters is how much gold is in a coin and you should pay the lowest price for that gold as you can get regardless of all other considerations.

Proof Coins

A Proof Gold American Eagle
A Proof Gold American Eagle on eBay selling for nearly 3 times what a regular American Eagle costs. Click the image for a larger view

The coins you buy from dealers are as shipped from their respective mints. However, coins can be sent to coin grading services where the quality of individual coins are assessed. This can have a huge effect on the value of the coin.

General coins like Eagles and Maple Leafs can be sent for assessment. Each coin is slightly different in quality and that level of quality will dictate the value of the coin. The best coins can be declared Proof or Proof-like. This basically means that the quality of the detailing on a coin is as good as it gets.

Grading services encapsulate assessed coins in transparent, airtight slabs which also show the coin’s quality. An American Eagle which cost $1,340 to buy but is assessed as being a top-quality coin (like in the image above) can sell for several thousand dollars!

The buyer, however, must foot the bill for shipping coins to and from a coin grading service as well as the grading fees. It’s a gamble that you don’t lose money getting coins appraised. But it can pay off.

Some mints may sell Proof coins directly. These coins go through a special minting process and so are expensive to buy from the start. I don’t recommend buying Proof coins if you’re only starting out.

Where To Buy Gold Coins?

Here are three easy methods for buying gold coins and bars online:

Amazon – prices tend to be higher here as dealers and merchants are selling largely to an uninformed public who are probably not aware that they’re paying over the odds for coins. However, you do have great buyer protection. Most coins are shipped direct from merchants rather than from Amazon directly. I prefer to buy my precious metals directly from dealers.

– You can certainly pick up bargains on eBay, but always check bid prices against SD Bullion to make sure you’re not paying too much. Many eBay sellers cover their fees and add a bit of margin into their shipping charges. You need to factor those fees into the overall cost. Insurance or a tracked shipment may be extra.

There’s less buyer protection on eBay and there’s always the possibility of being scammed with fake coins. Counterfeiters are getting very sophisticated with their coins. A common ploy is to have a tungsten disk layered in real gold. The coin may still weigh 1 Troy Ounce but only have a fraction of the gold you expect.

I do not buy gold coins on eBay simply because of the fear of being scammed. I do buy silver coins there from time to time though.

SD Bullion – a dealer in gold bullion. Their prices are much better than you typically get on Amazon and eBay. They also stand over their bullion, having brought it in from reputable sources. All orders are shipped fully insured via USPS, UPS, and FedEx. If an order goes missing before it gets to you, they take responsibility for it and they will replace your order or refund you.

This is a company I do buy from. If you’re outside the USA, you will need to place an order by phone as they don’t accept international orders via their website.

Low Cost Bullion – Another online dealer I’ve used to buy coins. They’re marginally more expensive than SD Bullion (a couple of dollars more expensive on the price of gold coins) but they do offer free and insured shipping, so there’s a saving there. They don’t accept International orders.

CoinInvest – If you’re in the EU, then this is a good online option. They’re the cheapest for gold coins which are shipped securely anywhere in the EU. They have a huge range of coins from around the world including Eagles and maple Leafs.

CelticGold.eu – Another dealer for those in the EU. Marginally more expensive for gold coins but they’re marginally cheaper than CoinInvest for silver. Coins are shipped securely throughout the EU.

By way of comparison, here is what a Gold American Eagle is selling for on three of the above platforms. There’s quite a disparity in the price. All coin prices were checked at the same time when the gold spot price was $1,278:

American Gold Eagle Prices
American Gold Eagle prices on Amazon, eBay and SD Bullion. Actual coin sizes are the same, they’re just displayed at different sizes on the threes sites
Mints – some mints will sell directly to the public though they may impose limits on the number of coins you can buy, especially when coins have limited mintage. Common coins like the American Gold Eagle or the Canadian Gold Maple Leaf do not have limited mintages, so order limits are rare. They could still happen if there’s high demand for particular gold coins though.

Many mints are geared towards creating collectible gold coins which do have limited mintage or have high relief detailing. These are numismatic coins and so you’ll pay more for those than a standard 1 oz gold coin.

Conclusion

Buying gold coins is a simple process online. Prices vary quite a bit depending on who you buy from so make sure that you are not over-paying for coins. Keep an eye on shipping charges too, especially where eBay is concerned.

Buying from a reputable dealer, especially a precious metals merchant, is the best way to go. They have a greater range of coins in stock consistently and should have no supply issues for the common gold coins.

Even though coins contain 1 Troy Ounce of gold, they are not all pure 99.99% (or .9999) gold. The American Gold Eagles fall into that camp whereas the Canadian Gold Maple Leaf coins are 99.99% gold.

Coins from other countries may have different gold content as well, so always check the gold content in the description of a coin. Krugerrands (South Africa) are 92.5% gold for instance.

You pay more for the gold in the smaller coins (fractions of a Troy Ounce), so if you can afford it, buying in multiples of 1 oz is the best and most cost-effective option.

Gold is expensive and buying 1 oz coins maybe outside your budget. If that’s the case, then look at buying 1 oz silver coins as well. They’re about 70 times cheaper per ounce.

Hopefully you’ve now got a better idea about how to buy gold coins and where to buy them. If you’ve any questions, sound off in the comments below.

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