At around 560 BC, King Croesus of Lydia is said to have coined the first gold coins in the history of mankind, and in 700 BC, King Pheidon of Argos minted the first silver coins. During the sixth or fifth century BC, the Chinese started minting the Ying Yuan, their gold coin. The twentieth century, however, saw the decline of gold coins as a form of money, and their disuse finally became apparent and ascertained in the 1930s when the world felt the terrible economic crisis of the Great Depression.
While countries the world over have stopped making and using gold coins, gold-colored coins have successfully made a comeback and have enjoyed patronage in several currencies. Furthermore, there are some countries that continue to make legal tender gold coins not for circulation, but for collecting and investment purposes. When Double Eagle coins were struck by the US Mint in 1933, they were surrendered and melted down, leaving only a few of them to survive. Then, in 2002, Sotheby's sold a very rare $20 1933 Double Eagle gold coin for $7,590,020, which is record-breaking and makes the said coin the most valuable coin ever sold. Collectors are known to covet the Solidus, Aereus, and Spur Rval.
There are several factors that determine the value of a gold coin, including its age, condition, rarity, and the number originally minted. For most of history, however, the correct amount of the precious metal it should contain was the basis for the value of a gold coin. The right weight and purity, which is also called as fineness, were given more importance than on the factuality of where a gold coin was said to be made and under which party it was ordered to be made. To avoid time-consuming tests in transactions that take place every day, the genuine appearance of a gold coin was referred to.
A gold coin is denser than a silver coin and all other coins made by other metals. This characteristic makes gold coins incredibly hard to fake, since the tests of volume and weight prove enough to determine a gold coin's genuineness. Platinum is denser than gold and costs more, so it would be futile to use them to fake gold coins. Other metals are either too light or cannot be made into the right coin size. In theory, fake coins could only be made by uranium, thus making the dilemma a most unpractical one. Indeed, it is mission impossible to fake even just one gold coin.
However, there are counterfeit gold coins in circulation and they appear to be well-made. The Saint-Gaudens Double Eagle omega counterfeit, for example, is notorious for its complexity and has managed to fool and mislead several numismatics experts. There are also poor counterfeits. Some double eagles contain gold and copper alloys have not been thoroughly mixed and have a mottled appearance; others do not use the correct amount of gold and weigh less; and still others are larger or smaller in size.
Gold in the history of mankind has always been the standard of wealth and prosperity. Back in the beginning of time, gold symbolizes affluence. Mankind has always been enthralled by this precious metal through the wearing of jewelry, of precious love through a wedding ring, or of wealth as demonstrated by stories of gold bullion hoarded or stolen. In the present day, gold is considered by many to be a safe investment amongst the dizzying array of financial investment tools. Today's market stocks rise and fall in response to economic forecasts, company performances, and world situations. The risks are generally high. Only gold can hold its weight on its own and can not be influenced as much as the world situations.
One way to do gold investing is to start gold coin collecting. The value of your collection are determined on the coin's condition, the history and their uniqueness.
Plus, there are other specific financial benefits to gold coin collecting:
Inherent Value
Gold has historically been the de-facto standard that reflects wealth since the beginning of time, and this is true both for the individual, as well as the nations of the world. The value of gold is inherent in this precious metal as gold continues to play a key role as part of the reserves held by central banks, nations and supranational organizations such as the IMF.
Gold cannot be duplicated or be manufactured by man as it is a resource and often, when stocks rise and fall, the value and steadiness of gold remains constant. Besides, gold is durable and cannot be created nor can it be destroyed; therefore, collecting gold coins is an exciting and fairly secure investment.
Portfolio
So how should you determine your portfolio? Gold coin collecting is financially characterized as being a safe and steady investment. The best part is that it is easily transferable into immediate cash based on its being legal tender.
Again do note that as with any other investment there are risks based on market fluctuations. However, gold coins have traditionally been strong performers and have provided good returns on the investment. Thus through gold coin collecting, you allow some diversity in your investments portfolio and it also adds a safety net through the historical and consistent value placed on gold.
Tax Benefits
Well what do you know! Gold coin collecting actually is a legal way to defer taxation on your investment. What this means is that as your return on this investment increases, your investment is not subject to taxes until those coins are liquidated or sold. Only then when those profits realized are then subject to capital gains taxes. In addition, there are no taxes imposed if you choose to take your gold coin collecting to the level of exchanging or trading your collection for an equal or higher valued coin collection.
Gold coin collecting is not only a fun and interesting hobby but it is also a rewarding one that can bring you handsome returns. However, you must do your research before you embark on any investment.
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