According to coin dealers, new buyers concerned with the safety of their money are buying gold. What form of gold might be best to own?
First, forget jewelry. It's rarely pure, and the markup is substantial. And you have to pay sales tax on jewelry. For gold coins, no tax is levied.
Far and away, the most recognized and tradable gold coin is the American Eagle. A close second would be the Canadian Maple Leaf. Other countries also produce gold coins, but the Eagle continues to be the international "gold standard."
As ailing as our economy may be, the world still looks to the United States as a financial bellwether. So, too, with gold coins.
Gold Eagles are minted in four sizes: 1/10 ounce, 1/4 ounce, 1/2 ounce and 1 ounce.
Because of minting costs, the smaller the size, the greater the premium over the price of gold. For instance, if gold is $900 an ounce, a one-ounce Eagle might cost $950. A 1/10-ounce Eagle might sell for $110 – the equivalent of $1,100 an ounce.
However, dealers also pay a hefty premium, so you get much of that back when you sell.
Some retailers advertise gold at "the lowest prices." Maybe, but the gold market is highly competitive, and rarely are prices dramatically different from one dealer to the next. One caveat: When buying from out of town, you may incur shipping costs. As with most anything you buy, it always pays to shop around.
Peter Rexford writes for Creators Syndicate. Contact him at P.O. Box 50377, St. Louis, MO 63105.
