Government Coin vs. Generic Bar or Round Bullion

Government Coin vs. Generic Bar or Round Bullion

Government Coin vs. Generic Bar or Round Bullion

I have been investing in silver for many years. I started to invest to secure my kids future because I do not trust the banks, it’s as simple as that. Recently I have been looking to start investing in gold and copper. I want to go ahead and discuss something that a lot of investors like myself get confused at, and that is whether it is best to purchase government coins in gold, silver, platinum.. etc, or to purchase generic rounds or bars.

There are advantages and disadvantages to both from being able to sell the investment in the future.

2014-american-gold-eagle2Government coins

Government coins are generally easier to sell. the reason being is that the purity of the precious metal is backed by the government, so what ever government that coin was minted by, they stand behind the purity of the coin.

A disadvantage of a government coin would be that they are often counterfeit. In particular the Chinese gold and silver pandas, there is a lot of counterfeits out there so it takes a lot of time for someone to validate that it is indeed authentic.


Generic bar or round bullion

With a Generic bar or round, the advantage is that the government doesn’t own it. It’s purely precious metal that has been stamped with a companies logo or work of art. With a private bar or round all that one is concerned with is the purity and the amount of precious metal in that bar or round. Another advantage is that they can come in various sizes amounts and weights, this makes selling easier and more economical.

The disadvantage of a generic bar or round is that there is next to little possibility that there will be a collector premium on top of the price over spot. Where as, with some bullion coins like the pandas and especially the Perth mint, a lot of those coins are carrying a heavy premium over spot so you’re getting the spot price of the precious metals content plus the collectors value.

With that, however, comes purchasing a government coin, typically the purchase price over spot, even before the collectors are alerted what it might actually be worth from a collectible perspective are often a few dollars over spot than a generic, private mint bar or round. The advantage to the generic, is that one can purchase a greater quantity because it usually costs less over spot price of that precious metal than a government coin that contains the same quantity of that precious metal.

Other precious metals

The newest metal that a lot of people have started to invest in is copper. People have been investing in copper for many years but it is only recently that mint companies have been making copper rounds and bars. These have taken off quite successfully, i personally have a small collection of copper rounds.

For a 1 oz copper round it cost me 99 cents. Copper is one of the fastest raising metals available today. is copper a good investment? I think it’s a great way to start investing and it is always a good idea to have a wide portfolio when investing in precious metals.

Copper is a base metal not a precious metal. This is not necessarily a bad thing but as it is a base metal it’s not weighed in a troy ounce 31.1 grams, It is weighed as a regular ounce which is 28 grams.

The disadvantage of buying copper rounds is that the current price of copper is around 23 cents an oz, if you look for the cheapest copper rounds on the internet you can pick an oz for around 99 cents. That is way over spot price. So you have to think is it really worth paying nearly triple what it is worth. Some say it is because you are diversifying your portfolio and if SHTF the copper value won’t matter and it will be down to the individuals to barter for for and with.

That being said, there are other metals to look into like platinum, palladium and even rocks like diamonds. The world is your oyster and sometimes thinking outside of the box and stepping away from spot prices and think about what these precious metals may be worth if disaster strikes is needed if you are truly going to succeed when investing your hard earned cash.

Resources:

1. http://www.jmbullion.com/guide/

2. http://www.tradeservice.com/copper_pricing/

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