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| June 24, 2021

How Buying Gold Coins is a Good Investment?

The gold coin is among the most preferred choices of investment, especially in India. With the availability of various loan schemes against gold, people have started to consider investing in a gold coin as one of the best ways to save money. It is not just a low-risk investment option but also offers better security, hence making it a stress-free way of investment.

Gold is said to be a tangible asset and has always commanded a good market value for centuries. Hence, buying gold coins for investment lets you stay assured of good future returns. While other investment options might be risky, gold is relatively stable and you will always be able to protect your money in the long run. In this regard, let us carefully understand why buying gold coins is a good investment with the benefits explained below.

Benefits of Buying Gold Coins for Investment

  • Protects against inflation risk
    Gold is said to have a hedge against inflation. There are studies stating that gold has outperformed the inflation rate and reduced the risk by a huge margin. Many people even look at gold as an alternative to the currency, particularly where the native currency loses its value. Gold is a real physical asset that tends to hold its value in the market, which, in turn, proves that buying gold coins is a good investment option.

  • A good way to save money
    Buying gold coins is a good way to save money for those who cannot do so in currency. The reason for gold’s importance in today’s economy is that it has been able to successfully preserve wealth throughout thousands of generations. The same, however, cannot be said for the paper-denominated currency, hence adding to the benefits that make gold coins a good investment option.

  • Easy to buy and sell
    Buying gold coins for investment is relatively easier than jewellery. It gives you the option to buy it in the purest form possible and in the minimum weight with little to no making charges in comparison to other ornaments. Besides, owing to the high demand, you can always check the latest market price and sell it without any hassle. If you do not wish to sell, you can pledge the same to take a loan from any of the trusted financial institutions.

  • No maintenance required
    The best part about buying gold coins for investment is that you do not have to worry about its maintenance to get the best returns, unlike other tangible assets. You can easily keep the gold coins safe at home for hundreds of years and sell them whenever you want at the then market price. This makes it one of the key benefits of investing in gold coins to secure your and your family’s future.

  • Stability in price
    Price stability is an added advantage of buying gold coins for investment. When compared to other investment options in the market, the price of gold never falls by a huge margin and is rather stable even during a global financial crisis. People turn towards investing in gold whenever there is a crisis, thereby leading to soaring in price in no time.

  • Easily transferable
    Once bought, gold coins can be easily passed on to generations without any hassle of paperwork, unlike other investment assets. And that is exactly what has been traditionally happening within families. Most people give gold coins and ornaments to their children or relatives during important events like marriage. This makes for a good way to give when you want them to save money in the long run and safeguard their future.

  • Does not deteriorate with time
    As discussed earlier, gold coins do not lose their sheen even after decades and their market value keeps on increasing irrespective of their age. Unlike other tangible assets, which are subject to lose their value and demand over time. Despite the economic ups and downs, gold coins remain firmly synonymous with stability, security, and longevity.

In addition to the above benefits explaining how buying gold coins is a good investment option, they are easily available for purchase on online and offline stores. Also, the price of gold coins is justified for their value and availability in different sizes.

Things To Keep In Mind

Buying gold coins is a good option for investment, however, subject to the following factors that one needs to consider while purchasing.

  • Purity of gold coin
    Always measure the purity of the gold coin before buying to ensure that you get the best return on investment. There are two ways to measure the purity of gold coins - Karat and Finesses. Karat (KT) is a commonly used term with 24 KT being the purest form followed by 22KT that contains 22 parts of gold and 2 parts of other metals like silver and zinc to make it more durable. Finesse, on the other hand, defines the weight of gold in proportion to the total weight and is expressed in the units of part per 1000. The purest form of gold, when measured in Finesse, is 999.9 parts per thousand of purity.

  • Hallmarking
    A crucial factor when buying gold coins that can make your purchase to be a good option for investment. One should always check that the gold coin is stamped with a BIS mark, which certified the level of its purity. The Government of India has set up the Bureau of India Standards (BIS). This ensures to eliminate the risk of fraud when buying gold in any form. There are four components of a genuine BIS hallmark.

    1. [BIS] logo
    2. Year of hallmarking
    3. Purity mentioned in Karat or Finesse
    4. Jewellery identification mark or registration number

  • Denominations
    The gold coins in India are currently available in denominations ranging from 1 gram gold coin, 2 grams, 5 grams8 grams, 10 grams and 20 grams. However, the availability of gold coins you wish to purchase depends on the seller. Sometimes, they even customize the sizes to fit the buyer's requirements and budget, starting from as low as 0.5 grams.

  • Making charges
    Making charges on gold coins are relatively less expensive than buying jewellery, owing to the relatively uncomplicated design. Also, the making charges are not borne by the next purchases when you plan to sell the gold ornaments in the future. Hence, buying gold coins is a good investment option as you can get better returns when compared to other forms of gold.

We hope that the article was helpful to you in understanding why buying gold coins is a good investment option.

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