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The Price of Gold and the Relationship to Coins
by D. L. Crane
Coin collecting is a hobby that dates back
centuries. There are literally millions of coins
that can be collected from all over the world; a
person could spend 50 years collecting and still
come across only a fraction of the coins
available. That is part of the allure of
collecting coins. You are always on the lookout
for that rare piece, or that coin that is worth
a fortune.
What determines the value of a coin? Is it the age?
Vintage? Gold and silver prices? Actually, it’s
all of the above and more. The price of gold
and the relationship to coins is an
intricate one, and should not be taken lightly.
Gold prices have a lot to do with how much your
coins may be worth, both today and in the
future.
In 1965, the U.S. began the process of switching
the composition of nickels, dimes and
half-dollars from silver to a metal composition
of nickel and copper. If you have coins in your
collection that are dated before 1964, they are
going to be worth more than post-1964. The price
of silver will have a direct effect on the price
you can get for these older coins.
The same principle can be said for gold. With
the fluctuation in gold prices, a coin can be
worth one hundred dollars today and eighty
dollars tomorrow; alternatively they could be
worth one hundred dollars today and one hundred
and twenty dollars tomorrow. As you can see,
the price of gold and the relationship to coins
is a very close one.
Knowing how much gold your coins have will also
affect the overall price of them. Some coins are
100% gold, while others are a composition of
gold and other metals. Obviously, the more gold
it contains, the more it will be worth. Value
and price, however, is not always the same
thing. A coin can hold much value in a
collector’s case, but not be worth much money.
Perhaps it holds sentimental value, and no
matter what it’s worth, a collector will never
give it up.
There are other definitions as well. The price
is what a collector paid for the coin; the value
is what a dealer or other collector is willing
to pay for that same coin. If it is a
sought-after or rare coin, the value can
increase exponentially over time. The price
of gold and the relationship to coins is not
the only factor in determining a coin’s value,
as you can see.
The grade and condition of the coins will also
be used to determine a coin’s price and value.
The best type of coin is one that is
uncirculated, and in pristine condition,
preferably in a protective case. Coins from the
U.S. and Canadian Mint are among the highest
valued coins, because of the quality of the
commemorative coins they produce. They are among
the highest quality in the world.
The price of gold and the relationship to coins
can be described as almost synonymous. When the
price of gold goes up, so does the value of the
gold coins in your collection (each dependent on
the amount and quality of the gold.) When the
price of gold goes down, so does the value of
your coins. A serious coin collector will keep
meticulous records as to how much was paid for
each coin, and the certificates and grades of
each. They will monitor the price of gold on a
daily basis and estimate the value of their
collection periodically.
The price of gold is determined by trading in
the derivatives market, and is valued through
its troy weight, as well as the number of
carats. The higher the carats and weight, the
more valuable it becomes. The weak U.S. dollar
has created an increased demand for gold the
past few years, and prices have jumped
accordingly.
The price of gold and the relationship to coins
can be complex and there are many other factors
involved in determining a coin’s value, other
than the market value of gold. Always buy your
coins from a reputable dealer, and if possible,
get a certificate of authenticity so you know
you are buying quality coins that will increase
in value.
Expert's Guide to Collecting & Investing In Rare
Coins
Red Book Guide to help with U.S. Coins
Coin Collecting for Dummies
Click Here for More Information on Rare Coin
Investing
Click here for U.S. Coin Price Guide
Go to
www.bestcoin.com
for great prices on all coins and currency.
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