Gold Coins Allowed as Legal Investment
In American Individual Retirement Account (IRA)
American Eagle Silver and Gold Bullion Coins
Are Most Wanted Coins for USA Tax-Sheltered IRA Accounts
Silver and Gold Coins Which Are Eligible Investments for IRA Plans
- Silver and Gold American Eagles which were introduced by the U.S. Mint in 1986 as bullion coins are the only coins specifically approved for a U.S. Individual Retirement Account (IRA). Until 1997 they were the ONLY form of physical gold or silver eligible as an investment within an IRA. After 1997, Platinum American Eagles became approved coins as well. You may hold the Eagle coins and other coins in just one IRA. All of the American Eagle coins are U.S. legal tender and denominated in dollars. The one-tenth ounce $5 Gold Eagle coins are .9167 fine and contain .10 troy ounce of pure gold, which by law must be mined in the USA. The U.S. government guarantees the weight and precious metal content of the American Eagle coins. They have become the most recognized and easily traded coin throughout the world.
- Other gold and silver coins must be at least .995 fine in purity (meaning they are at least 99.5% pure gold or silver) and be "legal tender" coins. Thus legal tender gold coins which are 24K do qualify, while 22K gold coins do not - unless they are the 22K Gold American Eagle coins.
By meeting both these "purity" and "legal tender" requirements, these popular .999 or .9999 silver and 24K gold coins may also be legal investments for a tax-sheltered American IRA...
- American Gold Buffalos
- Canadian Gold Maple Leafs
- Austrian Philharmonics
- Australian Kangaroo-Nuggets
- Australian Lunar Series from Perth Mint
- Canadian Silver Maple Leafs
- Mexican Silver Libertad
This same "purity" requirement that the coins be at least 99.5% pure precious metal means these other gold and silver coins WILL NOT be an eligible investment for an American IRA...
- South African Krugerrands. These gold coins issued since 1967 contain only 91.67% pure gold.
- Old American Double Eagles. These U.S. $20 gold coins were used as legal tender from 1850 to 1933 and came in two designs: the St. Gaudens (Walking Liberty) and the Liberty. They contain 0.9675 ounce of gold and fail to meet the 0.995 "purity" requirement.
- Old American gold and silver coins issued before 1965. Though they are "legal tender", these coins contain only 90% pure gold or 90% pure silver. The 1965 to 1970 Half Dollar coins contain only 40% silver.
- Old Canadian silver coins issued from 1920 to 1967 are 80% pure silver and also fail to meet the "purity" requirement, so they are not eligible investments for an IRA.
- Sterling silver coins are only 92.5% pure silver and fail to meet the 0.995 "purity" reguirement. Various Sterling silver coins were issued by Canada until 1919, by Great Britain (UK) until 1919, and by Australia until 1945.
Acquiring and Storing Silver and Gold Coins for an IRA Plan (or Roth IRA)
The assets included in a tax-sheltered IRA plan must be held in trust by an authorized third party known as a Custodian or Trustee. The Trustee of the IRA must be the purchaser of the asset (such as gold coins) and must have the ability to take delivery and store the physical gold or silver in an approved depository - which is usually a secure place such as a bank vault or precious metals depository.
There are two ways to put funds into your new IRA account. The first method is a "transfer." You can do this at any time with your existing IRA, but the assets (all or a portion) must be transferred directly from the old IRA custodian to the new IRA custodian. The assets or money do not pass into your hands at any time. The distribution check from the old IRA custodian must be made out in the name of the trustee or custodian of the new IRA account. You may make as many direct transfers as you wish, as often as you want, without incurring any tax liability.
The second method is called a "rollover". You personally withdraw and temporarily receive money into your own hands from an existing IRA, and then personally deposit the money into another IRA with a different custodian or trustee. Once you have withdrawn the funds from your old IRA, you must deposit the funds into a new IRA within 60 days or you would be liable for taxes and penalties. The same money may be rolled over only once every 12 months. Doing a rollover according to the regulations will maintain the tax-deferred status of your IRA.
Not all Custodians or Trustees will have the ability to acquire and store coins, so you will need to choose yours carefully if you wish to include eligible silver or gold coins in your IRA. One Trustee which can hold gold and silver coins in an IRA is Sterling Trust Company in Waco, Texas. You then direct your new IRA Trustee to buy the coins for you from the dealer you have chosen as your source for gold or silver coins.
IRA regulations prohibit you from depositing coins which you already own into your IRA.
After depositing funds to your IRA, or having sufficient funds already available in your IRA, you must direct your Trustee to purchase the silver or gold coins from a dealer of your choice and have them shipped directly to the approved depository. You cannot hold the coins yourself while they are an investment of your IRA.
At some future time when you choose to withdraw assets from your IRA (which would create a tax liability) you may request the coins be shipped to you, or you may direct your Trustee to sell the coins and send you a check for the proceeds of the sale.
Note that some Trustees will require a minimum investment, which might be more than you are legally allowed to (or are able to) deposit into your IRA in a single year. So you may not be able to start a self-directed IRA with too small an initial deposit, and may have to wait until you have built up sufficient funds in your IRA which you can transfer to the new Trustee. The Trustee may also have a minimum investment level, such as $1,000, so be sure to check the contract and fee schedule of the Trustee you choose to handle your IRA.
Usually there will be a transaction fee for every purchase or sale of an asset in your IRA, an annual fee for managing the Trust, and an annual fee charged by the approved depository which stores your silver and gold coins and/or bullion. There may also be a fee charged when you close your IRA account.
1986 to 2007 American Eagle Gold Bullion Coins - An Ideal Investment for IRAs and Roth IRAs
Minted bullion coins may be more desirable than silver or gold bullion bars, or than bullion wafers or rounds. Here's how you can benefit from buying bullion coins...
- The American Eagle coins do not require any assay to be done to establish their real weight and metal content. Their weight and purity are guaranteed by the U.S. government, and it is virtually impossible to shave or adulterate a minted coin without the tampering being obvious. People anywhere in the world just naturally trust that an uncirculated American Eagle silver or gold coin contains exactly the amount of precious metal it contained when minted. Saving the cost of an assay helps reduce the overall cost of the silver or gold in the coins when compared to the cost of buying and selling bullion bars, wafers, or rounds.
- Silver and gold bullion, on the other hand, can be shaved or adulterated (by adding cheaper metals such as lead) without the tampering being easily detected. And fresh-cast bullion bars always vary in weight when manufactured. Thus a sale of bullion requires that the bars be assayed to assure the buyer of the weight and purity of the precious metal. The cost of the professional assay adds to the cost of acquisition of the bullion. Further, there might be additional costs for more assays to satisfy IRA rules concerning an annual audit of the value of the investments.
- When it comes time to withdraw funds from the IRA, the coins need not be sold, but can be delivered to your home and conveniently stored or hidden in various places. If a financial crisis or national disaster should occur, having some easily carried and easily recognized silver and gold coins at hand may be a lifesaver when paper dollars are not being accepted in exchange for food or fuel or other goods necessary for survival. It would be problematic to try to use bullion bars or wafers to make everyday purchases, and it would be more risky to personally carry that much gold or silver. The one-ounce Silver Eagle coins and one-tenth ounce Gold Eagle coins would be the ideal sizes for everyday use.
- Because the coins come in smaller sizes from 1 troy ounce of silver or 1 troy ounce of gold, and also .5 and .25 and .10 ounces of gold, they can be purchased in small quantities and for smaller amounts of money than bullion bars or wafers. For the smaller investor, minted bullion coins like the Silver and Gold American Eagles may be the best or the only choice. Even though some mints sell small-sized bullion "rounds", often there is a minimum purchase of 10 or more required. You can buy a single American Eagle $1 silver coin for US $13 to $15, or a single American Eagle $5 one-tenth ounce gold coin for $65 to $85 (based on the spot price of silver and gold at time of writing). Note that purchases of $1000 or more of American Eagle coins are not subject to any state tax.
To buy the one-tenth ounce Gold American Eagle is the best way to acquire gold coins at a low price and in the most convenient form. They are easily transported, are recognized and accepted world-wide, and are easily traded for cash close to the current spot price (meltdown value) of the one-tenth troy ounce of pure gold metal they contain.
Note that all the Gold American Eagle coins are 22K, or 91.67% pure gold. Because of the addition of some metal alloys to make them harder and more durable and less easily scratched than 24K pure gold, they are made slightly larger in size and weight than a .999 fine gold coin so that they will contain the full specified amount of pure gold, plus the alloys. In other words, a one-tenth troy ounce $5 Gold American Eagle coin contains exactly 0.10 troy ounce of pure gold, plus some alloys like copper (increasing the coin's actual weight to 0.1091 troy ounce), and the one troy ounce $50 Gold Eagle coin contains exactly one troy ounce of pure gold, as much gold as an American Buffalo 24K gold coin or a Canadian Maple Leaf 24K gold coin.
Why a $50 Gold Eagle is Worth Much More Than $50
The nominal "dollar value" appearing in the design of the American Eagle coins harks back to the historical value of earlier silver and gold coins once commonly used as currency in the United States of America when people had real money, not just paper receipts printed by the government. From 1850 to 1933 an American $20 gold coin was in circulation as legal tender. It contained 0.9675 troy ounces of pure gold - almost one ounce.
Comparing the dollar amount of a 1993 American $20 gold coin to the much greater value of the gold metal in that coin in terms of 2007 US dollars is a reminder of how many U.S. dollars it now takes to buy the same amount of goods or services that the original $20 coin would buy in the 1933 - well over $600 dollars!
In other words, if someone had saved an American $20 gold coin in 1900 or 1933 it would be worth $600 to $700 U.S. dollars in 2007 for its melt-down gold content at 2007 gold prices - and it would still buy about the same amount of food or gas or clothing, or would rent a small apartment for a month. But if someone had saved a U.S. $20 bill in 1900 or 1933, it would only buy $20 worth of food or gas or clothing today - and wouldn't pay a month's rent anywhere.
So would you want to save your hard-earned money in paper money that shrinks in value over the years - or in real silver or gold money that keeps its value over the years?
That is why it makes economic sense to store some of your retirement savings in silver and gold. When it comes time to stop working due to retirement (or illness) and you must depend on the value of that savings fund as your sole source of income, you want your saved money to still buy what you need to buy to survive.
What you don't want is for that saved money to be worth less than it was worth when you worked hard to earn it. Yet that is what happens when governments keep printing more and more paper dollars, which devalues the paper currency and makes all previously saved paper money worth less.
They call it Price Inflation when prices rise because it takes more dollars to buy the same goods and services. But really it is Dollar Devaluation. Dollars become worth less over time because they are instrinsically "worthless".
Do you want YOUR hard-earned dollars to be devalued? What will happen if you reach retirement age and stop working, then find that the dollars you saved up for retirement will only buy 80% or 50% of what you need to have a comfortable life after retirement? Devaluation of paper dollars robs citizens of their retirement lifestyle, whether they invested their savings in stocks, bonds, savings bonds, or cash in bank accounts. Anything based on paper dollars are worth less when the value of the dollar goes down.
Read what Congressman Ron Paul of Texas has to say in 2007 about inflation and the devaluing of the U.S. dollar at
Commodities tend to keep their value over time, and the only commodities which can be easily stored for long periods are precious metals like gold, silver, palladium, and platinum. Of these, only gold and silver have been used as circulating "currencies" or "money". So gold and silver are the only "real money" that keeps its value over time.
No one trusts paper dollars to do anything but decrease in value over the years. That has been an historic fact, since all governments have always spent more than they took in as taxes, and simply printed more paper money to cover their deficit spending.
That is why professional financial advisors are now recommending that we hold 5 percent to 20 percent of our savings and investments in gold and silver to protect us against the further devaluation of paper dollars.
But you won't get that advice from stockbrokers or mutual fund salesmen or insurance salesmen - or anyone who is trying to earn commissions by selling their own financial products instead of recommending gold or silver coins or bullion. It is the unbiased experts who are selling their expert advice, and not selling a financial product, who are advising their wealthy clients to put gold and silver into their investment portfolio as a hedge against inflation and devaluation of the dollar.
How to Protect the Purchasing Power of Your Retirement Savings
You may not have any control over the dollars held in your company pension plan or Social Security pension fund, but you can still hold real gold or silver money into your own Individual Retirement Account instead of paper dollars. And you can also keep some gold and silver coins in your home where you could immediately access them if a national disaster strikes and the banks and bullion vaults are closed.
With respect to savings plans and tax-sheltered retirement plans like an IRA, we have been discussing the benefits of U.S. government-issued and government-guaranteed, mint-fresh, brilliant uncirculated, American Eagle gold bullion coins for savings and investment purposes, acquired for their real gold content at the lowest premium over the melt-down price of the pure gold they contain.
Remember, you can't deposit coins you already own (such as your coin collection) into your IRA. To acquire numismatic grade Gold American Eagle coins or Silver American Eagle coins in "proof" condition will cost you a hefty premium over the actual value of the gold or silver they contain - an additional cost you may or may not recover when you sell your coins at a later date. Only a coin collector will pay that extra money for that proof grade coin with its plastic casing, fancy box and certificate of authenticity, so it is a lot harder to find a willing buyer for a collectable coin than for a bullion coin - unless you offer the collectable coin at a price close to the spot price of the gold or silver it contains.
In terms of US dollars, from January 2006 to December 2006 the spot price of gold increased 22.5 percent, and the spot price of silver increased 44.3 percent. Did any of your mutual funds, stocks, corporate bonds, government savings bonds, or treasury bills in your IRA give you a better return on your investment? How much did they really go up in value after you take inflation into account?
Don't forget that if you were to earn 2 percent on your investment, but if over the same time period the rate of inflation was 2 percent, then your net gain would be zero. If the rate of inflation (cost of living) were to increase by more than the rate your investments grew in dollar value, then you would be losing money! And when you retire, you would have even less money to buy the things you need.
If you live in the U.S.A. you may not have noticed that the U.S. dollar has been declining in value against other world currencies, while the dollar value of gold and silver has been climbing higher.
This means that any of your savings and investments denominated in U.S. dollars - corporate bonds, government bonds and treasury bills, and bank accounts - have been declining in value too! And so has your future retirement income if your IRA or pension fund contains these dollar-denominated investments.
We call it "inflation" or "rising prices" or "an increase in the cost of living" - but the real truth is that things keep costing more because the paper dollars go down in value, so it takes more of them to buy the same amount of goods and services. But gold tends to keep its value over time, and still buys about the same amount of goods and services today as it did 50 or 100 years ago.
In general, gold and silver appear to cost more when it takes more dollars to buy them. But really it is the dollars that are going down in value. When gold goes up in price, it is usually a sign that the dollar is going down in value. And governments will try to keep the price of gold down by selling off some of their reserves of gold. Governments want to keep people from noticing that it is actually their paper money which is being devalued - because governments keep printing more paper money so they won't have to raise taxes and be accountable for their spending. They know that politicians who raise taxes tend to lose elections.
But that newly-printed paper money only serves to make all the existing paper money worth less. Those who worked hard in the past to earn money and saved some for their retirement end up with paper dollars that are worth less than when they first set them aside for their future. The price inflation caused by printing more dollars is robbing them of much of their retirement savings.
Here is an example that may shock you. In 1920 an American $20 gold coin OR an American $20 bill would both pay for a good tailored suit of clothes. In 2007 that same $20 gold coin will STILL buy a good tailored suit of clothes. But that U.S. $20 bill will only buy a nice tie. So which type of currency would you want to save up for your future? Will you rely on real gold that maintains its purchasing power when you need it - or will you rely on those empty paper promises that keep losing more and more of their purchasing power over the years?
Today, silver may be a better indicator of the actual devaluation of paper money because no government has any large store of silver these days, so governments cannot control a rise in the price of silver by selling off their reserves of silver to drive the price back down. Thus the price of silver can be more responsive to true market sentiment than gold. When silver starts to cost more in terms of U.S. dollars, it is a sign of decreasing trust in U.S. paper money. Then the smart investors start trading paper money for real money - silver and gold. In 2006 silver increased in value at nearly twice the rate of increase in gold.
You can protect the purchasing power of your savings and your retirement fund by trading some of your paper dollars for silver or gold coins or bullion now, before those paper dollars shrink even more and rob you of the retirement you planned to enjoy.
In a "worst case scenario" there could be a sudden devaluation of the U.S. dollar if too many people around the world suddenly lose trust in the value of those paper dollars and start trading them for gold or silver, or for more attractive currencies from other countries. Then anyone holding U.S. dollars or investments denominated in U.S. dollars would see a sudden drop in the value of the money they had earned and set aside for future use. By 2006 the government of China held over one trillion U.S. dollars which they had accepted in payment for all the cheap Chinese goods imported into the USA in recent years. What will happen to the value of the U.S. dollar when the Chinese start trading those dollars for gold and silver?
This kind of loss through devaluation of the currency already happened to the unfortunate citizens of Chile and Argentina not long ago, when their currency was devalued by their own governments. And when Brazil defaulted on its international debts, the value of its paper currency dramatically dropped in value. Those who saw the signs of the coming devaluation and converted their paper assets into commodities like gold and silver protected the value of their savings; while all those who were still holding their country's paper money lost much of their savings.
Those paper and electronic dollars (known as "fiat money") have no intrinsic value, so the value of the U.S. dollar depends entirely on public sentiment - how much the people of America and the rest of the world trust in the U.S. government and its economy. As that trust lessens, the perceived value of the U.S. dollar lessens too.
Already some oil-producing nations have stopped accepting payments in U.S. dollars and prefer to take euros in exchange for crude oil. Asian central banks have recently been converting their holdings of U.S. dollars to other currencies or are using their U.S. paper dollars to buy gold. They have lost their trust in the dollar, and this is a bad omen for the future of the U.S. dollar.
As the value of the dollar goes down, the value of gold and silver coins and bullion usually goes up - which is why gold and silver serve as a hedge against the devaluation of the dollar (or any country's currency).
What would happen to your plans for retirement if the U.S. dollar dropped 20 to 30 percent in value by the time you stopped working? The income you were expecting to live on after retirement would then buy 20 to 30 percent less than you expected. Would you have enough money left to live comfortably for the rest of your life? Or would you have to try to find another job just to pay your living expenses? And what jobs will be available for a person past retirement age?
In America, only 3 percent of the population owns ANY gold or silver. Most likely that is because they simply don't KNOW they could, or WHY they should. No one told them.
The average person has no financial expert advising him on his personal investment strategy. He might have a stockbroker or mutual fund salesman advising him to invest in the financial products which will earn the salesman a commission on the sale. But since the broker or salesman won't earn any money by advising his clients to buy gold or silver bullion, very few of these financial advisors even mention it as an option. And many of these advisors don't even know that the average person CAN buy gold and silver bullion coins for his IRA, or how he can buy it.
Meanwhile, all the real financial experts who are well-paid to give sound investment advice to the wealthy people are telling their clients to hold 10 to 20 percent of their investment funds in gold and silver bullion, or in bullion coins, as a hedge against loss of purchasing power and the possible devaluation of paper currencies.
You certainly don't want to be holding a lot of paper money when it suddenly drops in value. Gold and silver provide a hedge against a devaluation of any currency, which is why the prudent investor also holds some gold or silver in his portfolio. When dollars go down, gold and silver tend to go up. A balanced investment portfolio will have precious metals to balance the potential risk of devaluing dollars and devaluing dollar-denominated investments like stocks and bonds.
Gold and silver mining stocks, or exchange-traded funds (ETFs) holding a variety of good mining stocks, can also be a hedge against devaluation of the dollar, and can even provide a higher leverage that might produce greater gains than holding physical gold or silver like bullion or coins. But mining stocks also provide a much greater risk of loss because individual mining companies can be subject to negative factors which do not affect the price of gold or silver itself. And the stocks themselves are denominated in dollars, so when you sell them their value may be negatively affected by a declining value of the dollar. Be aware that some former favorites among mining stocks have suddenly gone down in value to almost zero.
No one has ever gone broke by buying and holding real gold or silver. These precious metals have kept their value for thousands of years, and that is why people put their trust in gold and silver, not in the broken promises of politicians who print paper money and pretend it has some real value.
Paper money is like an I.O.U. that will never be paid back in full. The longer you hold it, the less you will get paid for it. To see why this is so, play with the U.S. Governament's own online Inflation Calculator. Enter $1.00 in the first box, then select the years 2000 and 2006 in the next two boxes. Then press the Calculate button to see how much money it would take in 2006 to buy the same amount of goods or services that one U.S. dollar would buy at the start of this century.
That extra 17 cents per dollar means that the accumulated inflation has been 17 percent over the last 6 years - an average of nearly 3 percent per year. If you have not earned more than 3 percent after taxes on your investments, you have been losing purchasing power.
Try entering the amount of money you hope to have as an annual income when you retire, then enter a starting date equal to 2006 minus the number of years to your anticipated retirement date (e.g. 2006 - 10 = 1996 if you plan to retire in 10 years). Press Calculate and see how much more money you would need to live on now if you had retired that many years ago. That may be a good estimate of how much more money you will need to have when you retire, compared to what you think you need today. The 1996 example shows that people would now need 28.42 percent more income by 2006 if they had retired 10 years ago.
How many of them do you think are getting 28 percent more today from their pension funds? Chances are, they have had to reduce their spending by 28 percent and live a more modest lifestyle, because inflation has reduced the purchasing power of their savings by 28 percent over just 10 years. Did you ever wonder why so many men and women who look like they are past retirement age are still working as Wal-Mart greeters?
How would it affect your current lifestyle if your income were suddenly reduced by 28 percent? Would you be happy having to live that way?
What will you do to ensure that you will have enough money to live the way you hope to live when you retire? Are you planning to play a lot of golf - or work all day at Wal-Mart?
You can start by saving and investing more money now, and investing some of it in gold and silver to protect its future purchasing power. American citizens now have a negative savings rate - which means they are borrowing and spending more than they earn and save. Many made a foolish financial decision when they found their homes had gone up in value in recent years - they refinanced with a variable rate mortgage with a low initial interest rate, took money out of their home equity, and then spent it on things they didn't really need, like a brand-new gas-guzzling SUV or huge-screen plasma TV.
In the "land of plenty" the average American now has less savings and more debts than the average citizen of any other country with a large economy. It's time to reverse that trend towards bankruptcy, before it's too late.
Silver and gold go up and down in price, but over the long term they have always gone up in relation to the value of any paper currency. These precious metals have protected the purchasing power of those who buy and hold them when their prices are at bargain levels. Now is one of those times, and so was the beginning of 2006.
Those who invested in gold in January 2006 saw their investment increase by 22.5 pecent by the end of the year. Even after losing about 3 percent to inflation in 2006, they were still far ahead of those who bought savings bonds or kept their dollars in a bank account. Gold also outperformed the stocks in the Standard & Poor’s 500 Index by almost 10 percent in the year 2006. In just the first month of 2007 gold prices rose another 2.7 percent.
Don't make the common mistake of waiting until gold or silver is already rapidly rising in price, for that is a losing game (as it proved to be in May of 2006 when gold and silver prices temporarily spiked upwards). There is always a "correction" after greed and wishful thinking drive prices up beyond realistic and sustainable levels - and the last ones to buy always lose when the price drops back to a more a realistic level. A few years ago you saw this happen when the NASDAQ stock bubble burst after the "dot-bomb" fiasco. After experiencing some heavy losses, many stock market investors who hoped to retire by now are still working to make ends meet.
The worst time to buy commodities or stocks is when you are already regretting that you didn't buy at the beginning of a bull run when you had the chance, and your frustration or guilt leads you to make an irrational decision to buy in at unrealistically high prices just before the "feeding frenzy" ends and the smart speculators are already selling out to take their profits. Or the speculators might be selling short because they already anticipate a coming "correction" will soon drive prices down. The last ones in are usually the first to lose.
You need to buy when the general public is still unaware of economic factors that make gold or silver worth more than their present prices, when they are not interested in these undervalued commodities and their prices are still at bargain levels. Doing this increases your potential for gain and decreases your risk of loss.
We have been discussing savings and retirement and your IRA here, not speculation. The prudent plan is to "buy and hold" the gold and silver to protect your purchasing power, not take short-term profits. The goal is to get your gold and silver at bargain prices now, and not sell your gold or silver until you need cash for living expenses.
When your goal is long-term, you don't have to worry if gold and silver prices go back down temporarily. That would just present a good opportunity to buy more at bargain prices! When you are accumilating gold and silver for the long term (such as to build and protect your retirement savings) then you don't have to worry much about the actual price - you just keep buying over the months and years at whatever the price is at the time, expecting that gold and silver will continue to rise in price until you need to sell some of your precious metals to provide money to live on when you retire.
As long as the price you get when selling your gold or silver at that time is higher than all the earlier prices, then whatever price you paid over the years would have been a profitable investment. And the purchases you made while gold and silver were at their lowest price would be the most profitable investments of all.
You also need to buy BEFORE an unexpected world event - like rising oil prices or a war on Iran - takes place and the whole world suddenly wants to buy gold because they fear the worst. Those who already hold the gold will gain the most. Oil is currently undervalued, and when oil goes up in price, the price of gold usually goes up too.
If you believe that current conditions indicate that gold and silver will rise in price, then if you are not able to move a significant portion of your investment portfolio into precious metals right now, then you can still start buying smaller quantities as your finances will allow. Legal tender gold and silver coins may be your best option.
Buying Gold Coins at Low Prices
A good Gold Dealer can sell you American-made, mint-fresh, gem-brilliant uncirculated, "bullion" grade minted coins so that most of your money gets invested in real gold - without paying a high "premium" for the artistic craftsmanship and beauty of newly minted, collector grade, double-struck "proof" coins with mirror finishes sold in fancy display cases.
These American Eagle bullion coins are still beautiful specimens that appeal to the collector of gem brilliant uncirculated coins, but they are minted and sold as a convenient form of gold or silver bullion and are delivered in rolls of coins, not in individual plastic casings and fancy boxes. They come direct from the U.S. Mint to one of the five authorized Mint dealers, then to a wholesale buyer, who is the retail Dealer who sells them to you.
Some might have a small scratch from rubbing against another new coin in the roll, but otherwise they are in gem-brilliant, uncirculated condition, fresh from the Mint. Until supplies of the 2006 Eagle coins run out you will receive the 2006 issue, then you will receive the newly minted 2007 American Eagles.
Like any other uncirculated legal tender coin, they might increase in value as a collectable coin, but they are not intended to be "numismatic" coins like the American Eagle "proof" coins sold by the U.S. Mint to the public at a much higher price per coin. Proof coins are minted in fixed quantities per year, which makes their supply limited and makes them more desirable to coin collectors who appreciate their relative rarity and hope that this will increase their future value as a numismatic coin. The bullion version of the same coins are minted each year in whatever quantities are required to meet the continuing demand of the public to buy them.
The Mint does NOT sell the American Eagle bullion-grade coins directly to the public, only to the five authorized U.S. Mint dealers, who then sell them to other coin dealers at wholesale - or directly to the public at retail prices.
For the average investor, the best way to buy smaller quantities of gold bullion is to buy cheap gold coins at a price which is as close to the current spot price of gold bullion as possible. The American Eagle bullion coins have been sold since 1986 for exactly this purpose. Minted coins always sell for a premium above the spot value of the precious metal they contain, because it costs money to make and market the coins. But the premium is relatively small, and worth paying for the extra benefits offerred by a minted coin, as compared to bars of bullion (see above).
The selling price per coin varies daily based on the current spot price of gold or silver bullion. Call for current quotes Monday through Friday using the phone number on the coin dealer web site (see below).
If you are arranging for the Trustee of your IRA to purchase coins on your behalf, note that the Trustee will usually charge you a fee for handling the transaction, as they would for any other investments you acquire for your self-directed IRA account. And there will likely be an annual fee for safe storage of coins or bullion in the vault of some bank or other secure facility.
Be wary of buying from newer and lesser known dealers you find online, who might take your money and not ship the coins. Be aware that almost all reputable silver and gold bullion coin dealers will require payment by bank wire transfer, certified check, or money order before they will ship your coins. Do not expect to use a credit card to purchase low-cost gold or silver bullion, because the lower price is based on a cash sale. Dealers who do accept credit cards for bullion coins will have to charge you a higher price to cover their added cost for processing a credit card payment, often about 2 percent more.
Your goal is to acquire your gold or silver coins at the lowest cost over the spot price of bullion, not to pay 2 to 3 percent more to make the merchant's credit card processor more profits.
Shop online to check competitive prices, and be sure to check minimum quantity, and the quoted shipping, handling, and insurance fees, and any previously-unmentioned sales commissions, because these can vary widely among different dealers. Some well-known dealers have a minimum "shipping and handling" fee of $20 to $30 per order, and one even adds an "insurance" fee on top of their $30 minimum "shipping" fee.
Beware that the quoted selling price per coin you see on a web site may be lower than the final price you actually have to pay after all other fees are added. Some coin dealers will display a low price per coin just to appear competitive, but the real price after added fees will be higher. And the price you see on the web site may not even be today's price unless they have a live update that tracks the fluctuating market price of silver and gold in real time (the "spot price" of silver or gold bullion).
You will need to make a telephone call to get a realistic current price for uncirculated gold or silver bullion coins, since the actual selling price changes daily or even by the minute, depending on the current market price of gold or silver. The price quoted today could change by tomorrow morning.
After a little shopping at large, reputable dealers like Kitco or Monex and getting telephone quotes on the TOTAL cost including shipping and insurance and ALL fees, you will soon see how much you can save when you buy mint-fresh, brilliant uncirculated, American Eagle gold bullion coins through the recommended website.
There are at least five very important and compelling reasons why you should start trading American paper dollars for silver and gold coins NOW before the value of the U.S. dollar goes down and the price of gold coins and gold bullion goes up even further. The best way to protect the purchasing power of your savings and retirement funds is to use your paper dollars to buy and hold silver and gold bullion coins.
Remember, when the value of the dollar goes down, it takes more dollars to buy the same amount of gold or silver. The average person does not realize the truth that it is the DOLLARS GOING DOWN IN VALUE that makes gold and silver go up in price. The usual year-by-year cause of U.S. dollars going down in value is the constant habit of the Federal Reserve to keep print more and more paper dollars each year. But the dollar can go down in value simply through public "sentiment" - when people in America and other countries lose faith in the U.S. dollar, or when they become fearful because of an imminent war or some other negative economic factor like rising oil prices or rising unemployment or an anticipated recession.
Paper dollars and electronic dollars always go down in value, especially when the public starts to lose faith in those intrinsically worthless forms of currency - and that is why so many professional financial advisors are telling their clients to hold 10 to 20 percent of their savings and investment funds in physical gold and silver, not stocks or bonds or treasury bills that will be paid back in devalued dollars, or in any other paper currency.
If you don't believe that government-issued money is not going down in value, ask yourself why the U.S. government recently passed a law to prevent people from melting down U.S. copper pennies. Copper has gone up so much in price recently that people who own older copper one cent coins could receive more than double their face value by selling the copper metal they contain.
Even using cheaper metals like zinc as they have for some time now, today it costs the U.S. government more to make the one cent coins than they are worth as 1/100th of the current U.S. dollar. Why is that? It is because people now value the copper and zinc metals more than the value of the U.S. dollar, so it takes more dollars to buy a pound of copper or zinc and the prices of these commodities have skyrocketed. As often happens, when the dollars go down in value, the metals go up in price.
The same has already happened with nickel and five cent nickel coins. And it may soon happen with the precious metal commodities like silver and gold, whose price in dollars could skyrocket again like they did in 1980.
In 1980 gold and silver prices rose to historically high levels, with gold reaching $850 per ounce, but they have traded below those peak prices ever since. What most people do not realize is that when you take inflation into account ($1.00 in 1980 equals $2.44 in 2006) and adjust those 1980 prices to their equivalent prices in 2006 dollars, gold would have to rise to US $2,176 per ounce, and silver to US $122 per ounce, just to reach those prices they achieved in 1980.
Don't think it's not possible that gold and silver could ever rise towards those prices, because in 1980 they already did! Gold and silver are significantly UNDER-valued in 2007 U.S. dollars, and the market always adjusts itself eventually. Now is the time to buy gold and silver bullion and coins while silver and gold are still at bargain prices and you can get much more for your dollars.
Learn how to buy silver and gold bullion coins at the lowest price
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Bullion Gold Coins
The information provided on this page about silver and gold is intended for educational purposes only. It is not a solicitation to purchase any investment, and is not to be considered as advice on taxation.