May 23, 2011 – There is another option for gold and silver investments for investors who are wary of the volatility in daily prices – rare gold and silver coins.
“Common wisdom” says that the additional premium imposed on collectible coins makes for a poor investment. But that premium is an investment in itself, which is much more stable than the precious metal content of the coins.
Rare coins have the interesting attribute of fixed supply. That means there never will be any more produced, and the available supply is almost certain to diminish as interest in them grows. Even with supply and demand static, the rarity premium would remain a constant value relative to currency, that is, it will rise with inflation.
Investor demand, however, is steadily growing, heating up competition for the gold and silver coins in greatest demand. As investor participation in the physical gold and silver market continues to grow, rare coins’ double potential for returns will become ever more appealing.
There is a common misconception floating around that the risk of being sold forgeries or overvalued coins is too great for anyone but expert numismatists. But that is totally unfounded. Modern grading and certification services make it possible for even novice investors to buy rare gold silver coins with total confidence.
There is little doubt that gold and silver will continue to follow their strong upward trends for years to come. Over time there will of course be peaks and valleys, and we can expect a few to be severe. Today’s prices are hanging in one of those valleys, and that just makes this an ideal time to buy.
And if price volatility makes you nervous, consider rare coins. Their content of gold and silver will grow with the trends and their premium will grow with demand while their status as collectibles will smooth out most of the bumps in the road.
Senior Staff Writer – GoldSilver.org