Would you buy gold coin instead of a gold bar? Do you understand the differences between an investment in bullion and one in coins? Interestingly enough, not many people realize that coins offer a unique, and quite rare, opportunity in the world of investment. What is that? They offer insurance against a complete and total loss of the investment capital. Choosing coins means that the investor gets the value of the precious metal, but it also means they get the backing of the government currency too.

Just consider the facts; when you buy a gold coin that has been officially minted by a government agency, it usually comes with a permanent face value. For instance, a one-ounce American Eagle made from nearly pure gold is always going to be worth fifty American dollars. This value will hold regardless of the market value of gold as a precious metal.

So, the investor could buy a gold coin such as this, or even a large number of them, and consider them for their intrinsic value – the value of the metal – as a means of increasing their portfolio or personal wealth. Should the value of the metal disappear or drop dramatically (which is not likely to ever occur when looking at the history of gold), the investor could then turn to the extrinsic value of the coins – the value given to it by the United States government. This means that, unlike bars of bullion that base their value entirely on the market price of the precious metals from which they are made, the coins offer a bit of protection or insurance on the investment.

Why not buy a gold coin from a dealer offering rare or scarce coins instead? Wouldn’t that be a faster way to obtain coins made from gold and which have a reliable value? While many investors do decide to add rare coins to their portfolio, these often come at prices that are incredibly competitive or high, due to the fact that collectors are seeking them too. If you have ever entered into a bidding war at a live or online auction, you will know that the items are often far over-priced by the time the bidding ends. This is not the wisest method of investing because the coin or coins might be a worthwhile purchase, but they may not reach the “break even” point in a realistic or reasonable amount of time, and yet standard gold coins will do so almost immediately.