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Investing in gold coins: What are your options?

by , 26 May 2014

If you've decided that you want to buy gold coins, the next decision you need to make is what type of gold coin to go for? Do you go for Kruger rands? Or do you opt for a more collectible type of gold coin? There are pros and cons to each. Let's take a closer look at what each type of coin offers you…

Investing in Kruger rands

If you want to buy gold coins and are looking for pure exposure to gold, then Kruger rands are probably best for you. The value of Kruger rands follows the spot price of gold. So this changes on a daily basis, the research team at the Resource and Scarcity Report explain.

Kruger rands come in four sizes:
  • 1/10 of an ounce;
  • ¼ of an ounce;
  • ½ of an ounce; and
  • 1 ounce.
You can buy Kruger rands through dealers who sell coins.

When you sell Kruger rands, you’re liable to pay capital gains tax on any profits.

Investing in collectible gold coins

You can also invest in gold coins that are collectible in nature. These coins reflect the gold price to a certain extent, but they come with a premium. This premium depends on the rarity, condition and desirability of the coin.

There are various issues of coins or sets of coins, for example, attributed to Nelson Mandela. Some of these coins are rarer than others, and this gives rise to a higher premium. If you get your hands on a desirable coin that was minted in small quantities, you could stand a good chance of making some decent profits over the years.

Collectible coins are exempt from capital gains tax, unlike Kruger rands.

Examples of limited edition coins include:
  • The Big Five, minted in 1994.
  • The Monarch of Africa, minted in 1999.
  • Special edition Kruger rand sets.
These gold coins are not only in demand in South Africa, they’re popular around the world. If you’re interested in this type of coin, you need to find yourself a suitable coin dealer.

So there you have it, the options open to you if you want to invest in gold coins.

Investing in gold coins: What are your options?
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