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Monday, April 10, 2006

How Much are Gold Coins

How much are gold coins is a question that is asked everyday as the value of gold moves fluctuates.

When you buy gold coins you also pay for the dealers mark up or premium as well as shipping and sometimes insurance costs. Because of this additional cost it can take a while before you recoup the value of what you have spent.

But gold has been rising and has jumped from around 250 US dollars per ounce five years ago to over 600 USD an ounce. If you bought a one ounce gold coin 2 years ago you would have paid the value of one ounce of gold plus some extra to the dealer, maybe an additional 20 percent as well as shipping, another 5-10 dollars maybe. However, since gold has risen so dramatically, you will have doubled the value of your gold coin to cover the dealer's profit and the shipping and made a profit yourself, if you were to sell of course.

According to the U.S. Geological Survey, "Of the 193,000 metric tons of gold discovered to date, 62% is found in just four countries on earth. All the gold discovered thus far would fit in a cube 22 meters on a side." 20 to 30 percent of this is held in bank vaults and the balance, 70 to 80 percent, is mostly held privately in the form of jewelry, coins and bullion.

Gold coins are a significant part of the total gold in the world.

It is quite likely that gold will continue to rise and that, even though buying gold coins now while gold seems 'high' may not look like a good idea, gold is something that has traditionally held its purchasing value for over 200 years. It seems it is fiat currency (the dollar) that is losing its purchasing value. It makes sense therefore to keep and even add to one's own gold ‘reserves’ in the long term.

'How much are gold coins?' becomes not such an important question then as 'How much gold can I own?'

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