Why do gold and silver bullion coin premiums vary by government?

If you are new to gold and silver investing you may have noticed that the coins minted by various nations appear to have a lot in common, the exception being their respective costs.. Coins minted in the United States are notorious for bearing higher price tags than their overseas counterparts. For example, two of the most popular gold bullion coins are the American Eagle and the South African Krugerrand. The Eagle is available in one-ounce examples and is comprised of 22-karat gold. The Krugerrand, or “Krug”, is also a 22-karat, one-ounce coin. Yet, consumers pay an average of 2.5 percent more per coin for Eagles.

US consumers are fiercely loyal and the US Mint has recognized this fact. Many American investors are willing to pay a little more for an American-made coin. There is nothing wrong with this strategy but investors should not expect gold Eagles to be more profitable than other bullion coins; all bullion bars and coins buy back at virtually the same price.

Many US-minted coins that seem identical on paper have different prices from one another. The US Mint varies its gold and silver bullion coin premiums greatly to meet the needs of a variety of collectors and investors. The 24-karat American Buffalo gold bullion coin premiums are some of the lowest in the market for pure gold bullion coins, but the 24-karat American Buffalo Proof gold coin costs a great deal more. Why?

Proof coins are recognized as collectibles that may have the potential to rise in value beyond their inherent precious metal content. Modern-day coins do not have any collector appeal and their values are limited to the gold and silver in them. The historical profitability of rare gold coins and the speculation over their future worth causes prices to rise in a way that bullion coins cannot match.

Investors who have questions regarding specific gold and silver bullion coin premiums are encouraged to contact our Help Desk toll-free at 1-800-394-3337. Gold Silver’s coin specialists are extensively-trained, non-commissioned representatives who can answer your questions without bias or an angle. Feel free to call us today to diversify your portfolio or Contact Us today using the link in the top-right corner of this page for your free copy of Real Money Magazine and our 2014 Insider’s Guide to Gold and Silver Coin Investing.

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