Adding 1-ounce gold coins to your portfolio can make a lot of sense, but be sure to know what you’re getting into.
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For centuries, gold’s finite supply and hefty demand have made it a valuable investment asset — and, these days, it’s one of the most traded assets on the planet. And, this precious metal offers several other unique benefits to investors, making it worth consideration as an addition to most portfolios.
For many, though, gold coins make sense to invest in — and the 1-ounce gold coin is a popular investment option in particular. But are 1-ounce gold coins a good investment?
Are 1-ounce gold coins a good investment?
Gold can be a good investment, but what about 1-ounce gold coins in particular? They can be, and there are a few reasons why:
Low cost of entry
You have the option to purchase multi-ounce gold bars when you’re investing in gold. But at today’s gold prices, doing so could cost tens of thousands of dollars — which would put the investment out of reach for many people.
However, you can purchase a 1-ounce gold coin for around $2,100 — which is about comparable to what you could purchase a 1-ounce gold bar for. That lower buy-in price makes these coins more accessible to the masses than larger gold bars.
Potential tax benefits
You can also add gold coins to your self-directed gold individual retirement account (IRA). Adding gold to a traditional self-directed IRA means you’ll make your investment on a pre-tax basis. Or, adding it to a Roth IRA means tax-free growth on your gold investments.
Moreover, some states offer sales tax exemptions on gold coin purchases that meet specific requirements.
For example, according to the Michigan Legislature, investment coins are exempt from state sales taxes. These coins include “numismatic coins or other forms of money and legal tender manufactured of gold, silver, platinum, palladium, or other metal and issued by the United States government or a foreign government with a fair market value greater than the face value of the coins.”
State tax regulations vary from one state to the next, though, you may or may not enjoy the same tax benefits outside of Michigan. It may still be worth it to check your state tax laws, however, to determine if there are any additional tax benefits associated with purchasing gold coins.
Potential for collectability
When you buy gold coins, you’re making an investment in gold — but you may also be purchasing a collectible asset. For example, some 1-ounce gold coins have collectible value because they feature striking depictions of animals, political figureheads and nature — and the mints that produce gold coins only make a limited number of the most collectible designs.
The rarest coins tend to have the highest collectability value — and therefore generally garner the highest prices.
Other reasons to invest in 1-ounce gold coins
There are other reasons to add gold coins to your portfolio, including:
Inflation hedge: “Gold is a popular investment when inflation is high, as it is seen as a price stable, safe haven asset when consumer prices are rising,” says Steve Azoury, ChFC® and owner of Azoury Financial. “The theory is that the purchasing power of the dollar falls, and gold can retain the value during inflationary times.”
Safe-haven investment: Gold isn’t just safe during inflationary periods. A gold coin “can be a good investment to help settle down your portfolio during uncertain economic times,” says Azoury. “Ultimately, it could help mitigate some of the risk other assets carry.”
Diversification value: Gold’s value isn’t typically correlated with stocks, bonds and other assets. So, adding it to your portfolio is generally a good diversification strategy.
The bottom line
There are several reasons to consider investing in 1-ounce gold coins. These coins are often collectible and have a relatively low cost of entry. Moreover, the potential tax and diversification benefits that come with gold coin investments can be hard to ignore. Compare your gold investing options online now.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
