Investing in gold and silver coins can be a wise financial decision. However, it can be difficult to know if silver or gold is the better choice in the long run. Keeping an eye on the market for both is important, but having a general idea of what you can expect with the two types of coins is also beneficial. Here is a look at the pros and cons of each option.
Silver Coins
Buying silver coins will be less expensive than gold, so it can be a better investment if you are looking for a larger collection or have less money to invest up front. Silver coins are usually found as either junk silver or collector’s coins.
Pros of Buying Silver Coins
- Junk Silver: Junk silver is a silver coin that is bent with a hole placed in the center. These coins maintain a fairly consistent value while still looking like unique coins. This is because their value is based on the silver content, not the collectibility.
- Lower Prices: A lower price point makes silver coins a wiser investment for those wanting to limit the money they spend on their coin collection. While the price of some gold coins can potentially be as much as thousands of dollars, you can find collectible silver coins for as little as $600 a piece.
- Price Increase: Silver has increased from 2005 to 2011 from $7 per troy ounce to $35 per troy ounce. This means that the value of silver, by percentage points, has actually risen more than gold.
Cons of Buying Silver Coins
- Coinage Cost: With silver coins, you will be paying a premium price for coinage above the spot price for silver. This means that you will have further to go before your investment makes a good return.
- Buying Rounds: Availability usually means buying silver rounds instead of actual coins. Rounds are simple disks of silver that were not minted by a government mint and will typically hold less value than a minted coin.
- False Coins: Especially with foreign silver coins, forged coins are more common with silver investments. Additionally, forged silver coins can be harder to avoid than with gold.
Gold Coins
Buying gold coins is a larger investment. Since many gold investments are made in bars, gold coins are usually found as collector’s items. However, the price of gold can bring a very large return on your investment.
Pros of Buying Gold Coins
- High Value: Gold coins have a higher value than silver coins. This means that even with a lesser percentage growth in price, gold will still bring a larger monetary return.
- Direct Money: Minted gold coins are still accepted in many places as a form of currency. While this is also true for silver, gold is more easily accepted worldwide for a higher value.
- Availability: Gold coins are a common form of investment for those not wishing to use gold bars. This means that minted gold coins are easily found most everywhere.
Cons of Buying Gold Coins
- Number of Coins: There are many different types of gold coins that are available. While silver coin investments usually only offer one or two types of coins, gold coins are much more numerous and widespread. This can sometimes lead to confusion during the process of investing in gold coinage.
- Premiums: As with silver, gold coins have a premium over the spot price of gold. However, due to the higher prices, this premium can be tougher to deal with.
- Price Fluctuations: Gold retains value, but the higher value of gold means that there is more room for the value to fluctuate. If you do not purchase while prices are low, you can lose a lot of money buying gold coins.
