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 down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
