5 Tips When Buying Gold Coins

Gold coins have gone up a great deal in value in the last couple of years and since they are now so expensive, there are a few things you should watch for when making your purchases. With the advent of the internet, you are not limited to the local coin dealer anymore. This can give you the opportunity to get better prices on many coins, but also may introduce a few more things for you to think about when buying your gold coins.

1. Whether you are buying from a bricks and mortar dealer or buying online through a website or and auction site like EBay, check the reliability of the dealer first. For a store, at least check with the local Better Business Bureau. If the dealer is a member of the Professional Numismatists Guild (PNG), that is a big plus. For an EBay auction, check the seller's feedback rating. If it's very low, or there are many negatives, think twice (and a third time) before spending a large sum with them. Even if the feedback seems good, look closer, some people will buy or sell a number of very inexpensive items to build up their ratings, then jump in selling big ticket items. On large ticket items, ask if the seller will agree to use Escrow.com. They act as a middleman in the transaction and the money doesn't pass to the seller until the buyer is satisfied with the item. There is a charge, which the buyer would be expected to pay, but its well worth it when big money is changing hands.

2. One of the biggest problems buying collectible gold coins is grading. Your idea of an MS65 may be different than the dealer's. Many coins have a huge gap in value between grades. Avoid the issue by buying only coins that have been graded by one of the third party grading services. Make sure that you only accept the major services (ANACS, NCG, PCGS, NCS, ICG) grading, there are some lesser known grading services whose grading may be suspect. You should also want the grading to have been done in the recent past. Grading standards have changed over time and what was an MS65 five or ten years ago, might only be an MS63 or 64 today.

3. Make sure the seller has a return policy that will allow you a refund if you are not satisfied with the coin. This should apply to both on-line and off-line dealers. This is especially important if you are buying a non-certified coin. You want to have the option to return it if your grading service returns a lower grade than you bought it at.

4. Buy the scarcest coin in the best condition that you can afford. Many collectible gold coins sell near the melt price of gold because there are more than enough around to cover demand. This is especially true in the lower grades. When gold increases or decreases in value, these coins will follow by a like percentage. But the higher the grade, the lower the population and demand will push up the price rather than just following the price of gold.

5. Try to invest regularly. As with the stock market, it's very difficult to call the tops and bottoms of the coin market. Over the course of time, you will fare better by dollar cost averaging than investing a large amount at one time.