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Numismatic vs Bullion vs Semi-Numismatic Coins: What to know

If you want to purchase coins, for investment or collection reasons, it is important you understand the different types of gold and silver coins that are available out there. Some coins derive their value from their gold content, others get their value from their rarity and history. The terms numismatic, semi-numismatic and bullion often come around when talking about gold coins. Do you know the differences between these 3 types?

Quick Introduction to Gold Coins

If you are looking to invest in gold coins for investment purposes, then it is vital that you know which type of coin to buy. Many first time investors make uninformed decisions that end up costing them quite a bit of money.

This article is going to enumerate the differences between the various types gold coins currently being offered for sale. If you are looking for gold coins strictly for investment purposes you need to steer clear of numismatic coins. People who want to safeguard their wealth against economic collapse and inflation should focus on bullion coins. The reason for this will be explained below.

Numismatic Coins

Numismatic CoinNumismatic coins are valuable because of there age, rarity, or collectable worth. The actual weight in gold is often times less important than the year the coin was made, the condition it is currently in, or the state of the coin collecting market. Coin collectors collect certain coins, such as the Morgan Silver Dollar, for its historical value. These dealers will often charge much more than the coin is worth in pure metal content.

There is a highly speculative market in numismatic coins. A silver or gold numismatic coin will often be brought and sold at high markups. The flip side of this is that these coins can plummet in value. They are simply not a safe investment.

There is a common misconception that it is better to invest in numismatic coins because they cannot be confiscated. This is a devious marketing ploy. The claim is based on the 1933 executive order that called for the confiscation of all privately held gold. There was an exception for coins that held a special value for the private collector.

Coin dealers use this anecdote to scare investors into buying high priced numismatic coins. The problem with the story is that it does not tell the whole story. Most people simply never turned in their gold coins. That is why so many of the gold coins of that era are still in people’s private collections. The order was never enforced.

Numismatic coins are fine for people who are collecting coins as a hobby. If, however, you intend on investing in gold coins as a safe investment vehicle, you must avoid any form of numismatic coin.

Bullion Coins

BullionBullion coins are ideal for investment. Bullion coins are not designed to be used in regular circulation. They are created specifically for those people who wish to hold money in the form of precious metals. Bullion coins have no face value. Instead, they are described by their weight. For instance, a 1oz American Gold Eagle is a popular investment grade bullion coin.

Individuals who are looking to invest strictly to prevent equity loss due to inflation and economic troubles should focus on gold bullion coins. These coins are valued strictly according to the value of the underlying precious metal. Unlike numismatic coins, you will not find yourself paying a premium for an exotic or a particularly rare coin that might drop in value.

Bullion coins are universally considered one of the safest forms of investment. There value is determined by looking at the spot price of gold. If you want to invest in gold, then buying and possessing bullion coins is the best way to do so.

Semi-Numismatic Coins

semi-numismaticSemi-Numismatic coins are coins that are a cross between Bullion and Numismatic. They are collectable, but also have worth due to their inherent gold content. The problem with these coins is that they are often inflated due to speculation. Coin dealers often charge a high premium on these coins.

Often times a semi-numismatic coin will be put up for sale at a very high premium. The dealer will suggest that the coin has both collectible value and precious metal value. This is something to be wary of. We have seen how collectible value can rise and fall and it is therefore not a stable metric for investing.

Bullion coins are the clear choice for the conservative investor. If you want to own gold, then you should buy gold bullion coins. They are valued at the gold spot price. If you choose to buy a numismatic coin you might end up paying much more than the coin is worth in gold. The value of a numismatic coin can rise and fall independent of the gold market.

The safest investment is always going to be in coinage that is strictly based on gold. For this reason it is best to choose a gold bullion coin. Find a reputable online site and choose the particular gold bullion coin you like and then make your investment.

  • Bob Arnold

    The term smi-numismatic still confuses. The page above shows a British royal sovereign. Would modern day proofs with very low mintage be cosidered semi-numismatic coins. Say for instance the 2008 Buffaloes or the 2009 ultra be considered numismatic. I am just asking where is the line that divides bullion from sem-numismatic. Does it have to be any coin minted before 1933? Where is the line drawn from semi numismatic to bullion. Thanks

  • Bob Arnold

    From what I gather from the reading. Low mintage coins even modern day that are priced far above bullion are semi numismatic. The Ultra the prroof short printed Buffaloes are semi numismatic