Once I decided to invest in gold I faced the next question, should I buy and sell ingots or coins? A bullion coin is a coin struck from precious metal and retained as an investment, rather than used in day-to-day commerce. Bullion coins are usually available in gold and silver, with the exception of the South African Krugerrand and Switzerland's Vreneli which are gold only. The American Eagle series is minted in gold, silver and platinum, and the Canadian Maple Leaf series is struck in gold, silver, platinum and also palladium.
Bullion coins are also typically available in various weights. These are usually multiples or fractions of 1 troy ounce, with a very few bullion coins minted, in extremely limited quantities, in kilograms (approx 2.2 pounds) and even heavier as special commemoratives.
Gold and silver are often seen as hedges or safe havens against inflation, political upheaval, social unrest, currency-based issues and economic downturn. Silver coins have become popular with collectors due to their relative low price compared to gold, and unlike most gold and platinum issues which are valued based upon the markets, silver coins are more often valued as collectables, sometimes far higher than their actual bullion value. Investors may also buy gold, silver, platinum, etc. during times of economic expansion for investment capital appreciation or to avoid inflationary impacts experienced with other investments.
Of all the precious metals, gold is the most popular as an investment.
Gold or silver, which were known to ancient civilizations, have a much longer history in financial markets than platinum. Platinum is relatively scarce even among the precious metals. As such, it tends to trade at higher per-unit prices than gold. Platinum is traded on the New York Mercantile Exchange (NYMEX) and the London Platinum and Palladium Market. Generally this trade is in ingots and not coins.
The price of platinum closely follows its perceived supply and demand. During periods of sustained economic stability and growth, the price of platinum tends to be as much as twice the price of gold. Since platinum has numerous commercial uses, such as with catalysts, during periods of economic decline, the price of platinum tends to decrease due to reduced commercial consumption and overall demand. Platinum's price peaked at almost $ 2,300 (USD) per troy ounce ($ 74 / g) in March 2008 driven by production concerns (arising partly from problems in South African mines). It later fell to $ 780 (USD) per troy ounce ($ 25 / g) in November 2008.
For this reason, I primarily consider gold and silver in both ingots and coins. I strongly prefer gold due to its global demand, but sometimes purchase silver, very sometimes. My ingot / coin "mix" of gold is approximately 25%: 75% since I consider gold to be a long-term asset. I appreciate the "collectability spread" inherent in gold coins, and also want some ability to sell gold if the situation warrants. Ingots would be the first to go, so I have diversified my precious metals holdings past simply "gold".
I have generally stayed away from mining stocks simply because they are a more complex issue than ingots or coins. To delve into gold and / or silver mining equities should require some research into energy requirements, environmental considerations and the political environment. I stick to the basic metal and bullion coins.
A very difficult decision is whether to take actual physical possession of a gold investment or not. Without going into the details of why, I'll simply say that I do NOT take possession of ingots. Now with coins, I usually do not take possession although I do have a few in a lock deposit box. Why? First these are usually physically the smaller issues and the ones I think are prettier. Sometimes I use these as gifts at graduations and weddings. In the last 20 years, only one (1) time has my gold coin gift ever been duplicated by a coin gift from someone else.
Generally, I have seen gold; my silver holdings just are not very significant, be a minor percentage but an important diversification of my long term assets. I have generally placed at least 10% and rarely over 20% of the total investment value into precious metals. Note that I have SOLD (ingots) to maintain the not-over-20% which has consistently resulted in realizing a marked profit from peaking gold prices. A simple strategy that totally removes "timing" from the investment buy-sell consideration.