Are you thinking of investing in gold coins?
According to reports, only just over 10% of Americans own gold.
But this doesn’t mean gold is a bad investment. On the contrary, gold could be one of the savviest ways to store wealth, especially in the current economic climate.
Research shows that gold can hold its value against even the highest rates of inflation in US history, often outshining traditional assets.
If you want to invest in gold, you might be wondering whether now is a good time to buy a Queen Elizabeth gold coin.
Given current events, Queen Elizabeth gold coins are getting a fair amount of attention. But are they a good buy?
Keep reading for an in-depth breakdown of the benefits of buying a Queen Elizabeth coin, as well as more information on sovereigns and gold coins in general.
Reasons to Invest in a Queen Elizabeth Gold Coin
As you probably know, Queen Elizabeth II, the longest-reigning monarch in British history, passed away at the age of 96 on the 8th of September, 2022.
Her passing has generated a lot of interest among coin collectors and investors. During the Queen’s reign, a number of gold coins were minted, and some have already gained significant values far beyond the intrinsic value of the gold they contain.
With the passing of the Queen, additional commemorative gold coins have been minted. Most of these are purely collector’s items and aren’t minted as legal tender.
If you’re wondering whether you should invest in some of these gold coins, here are the two main benefits of investing in a Queen Elizabeth gold coin.
Opportunity for Appreciation
Unlike gold bullion, gold coins have the potential to appreciate in numismatic value. Gold bullion merely commands a spot price, but gold coins can increase in value with age and scarcity.
For instance, a rare Queen Elizabeth I coin was recently auctioned in Germany for $770,000, the highest price paid for a coin in the country. Experts estimated the coin’s value to be around $274,000, but it went for far more on the auction block.
Originally, the coin was purchased for $1,187 by a coin merchant more than 90 years ago.
There’s no guarantee that a Queen Elizabeth coin from the recent monarch will sell for such a sum, but there could definitely be room for appreciation.
Depending on the rarity, age, the asking price you pay, and the length of time you hold the coin, a Queen Elizabeth gold coin could gain significant value.
The Queen’s passing means that the supply of Queen Elizabeth II gold sovereigns and coins has permanently ended. There might still be some commemorative coins minted in her honor from countries around the world, but the British mint cannot produce any more Britannia coins from her reign.
As soon as supply is cut off, this intrinsically increases potential value, especially for collectible items that hold numismatic value.
If you’re looking to buy gold as an investment, you might not be interested in the sentimental value of gold coins.
However, it’s definitely worth mentioning the historical value of holding a Queen Elizabeth gold coin.
Recently, there have been certain speculations that the Queen’s death might be the start of the end of the British monarchy. If the British monarchy is abolished, it’s almost certain that the value of Queen Elizabeth coins and many other gold sovereigns will rise significantly.
Without the British monarchy, the British mint will no longer be able to produce coins with the monarch’s image. Not only will this spell the end of an era, but it will also place irreversible limits on supply.
Potential Drawbacks to Purchasing Queen Elizabeth Coins
We’ve covered the benefits of buying a Queen Elizabeth gold coin, but are there any drawbacks to think about?
Overall, we’d deem Queen Elizabeth gold coins to be a potentially solid (pardon the pun) buy for investment purposes, providing you don’t pay an inflated price.
However, as with any investment, there are always considerations to factor in. Here are a few of the things you should be aware of if you want to invest in gold Britannia and Queen Elizabeth II coins in the US.
Limited Selection in the US
One of the first things to consider if you want to buy a Queen Elizabeth gold coin in the states is that there might be a slightly limited selection.
Naturally, most Britannica coins are more widely available in the UK. This doesn’t mean you can’t find Queen Elizabeth gold sovereigns in the US, but there may be less variety.
This can inflate the price to a certain extent, compared to coins that are minted on home turf.
Of course, if you’re more of a collector at heart, rather than an investor, this geographical-related rarity could be a draw.
What’s more, given the globalization of trade and easy access to reliable shipping solutions, you might still be able to source a Queen Elizabeth gold coin at a favorable price in the US.
If you decide to purchase a Queen Elizabeth gold coin, you should also be aware of the potential tax implications.
In the UK, gold sovereigns and Brittanica coins are still classified as legal tender. Legal tender is not subject to capital gains tax. This means that Brittanica coins sold in the UK don’t trigger capital gains tax.
However, this does not apply here in the US. Brittanica coins don’t fall as legal tender in America. The same tax laws around collectibles that apply to precious metals in the US apply to Brittanica coins.
In short, for tax planning purposes, be aware that Britannia and Queen Elizabeth gold coins are subject to the same CGT rates as gold bullion.
As we mentioned above, prices for Queen Elizabeth gold coins may be slightly higher in the US thanks to lower availability.
This is natural, given that there is a wider supply of Brittanica coins in Britain.
However, since the monarch’s passing, reports show that collectors have been clamoring for rare Queen Elizabeth coins and notes.
Thanks to the current attention on Queen Elizabeth gold coins, you may find that prices are significantly inflated.
If you’re buying gold for investment purposes, you will need to work with your adviser to determine whether you might be able to secure a better price in the medium-term future, or whether you should lock in current prices before they rise further.
Other Gold Coins to Look Into
Given the inherent supply restrictions, Queen Elizabeth gold coins have the potential for appreciation, provided you don’t buy at a highly inflated price.
If you cannot source reasonably priced Queen Elizabeth gold coins, you can also look into other gold coins that might be more readily available in the US.
For instance, American Eagle gold coins are widely available in the states, and they have both intrinsic and collector’s value. Reports show that demand for American Eagle gold coins has skyrocketed as economic uncertainty increases.
As interest rates rise and inflation continues, many Americans are looking to shift wealth into assets that can retain value even in the toughest economic climate. American Eagle coins offer investors the chance to do just that, while also holding the potential to increase in numismatic value over time.
Besides being more widely available, American Eagle gold coins also have an inherent tax advantage. US bullion gold coins are classified as legal tender here in the states. Because of this, they aren’t subject retailing and wholesaling B&O tax and retail sales tax.
Buying New vs Gold Sovereigns
Whether you’re looking to buy Queen Elizabeth gold coins or locally minted American Eagles, it’s a good idea to get to grips with the variables around buying new vs old gold coins and sovereigns.
If you buy old gold coins or sovereigns, you’re likely to pay a much higher price. Most older coins have already amassed a significant numismatic value. By buying old, or rare historical coins, you will be investing in something that already has proven appreciation potential.
Older coins can be a surer investment, but, they might not have as much potential for appreciation as newer coins.
For instance, let’s say you purchase a Queen Elizabeth II commemorative coin or a newly minted American Eagle. There’s a good chance that you’ll get most newly minted coins at a comparatively low price.
If the coins you buy increase in scarcity over time, and they’re kept in mint condition, they’ll most likely appreciate in value. Depending on how long you hold the coins, their value could increase significantly, far outstripping their weight in gold.
However, it’s not guaranteed that all newly minted gold coins you buy today will increase dramatically in numismatic value.
If you hold them for a very long period, and societal conditions allow for a sustained collector’s market, you’re almost guaranteed to make a substantial profit. However, if you want to sell your gold coins in the near future, there isn’t a solid guarantee of appreciation in numismatic value.
Buying Gold Coins vs Gold Bars
If you want to invest in gold coins, you might also be wondering how this compares to investing in gold bars.
Newly minted gold coins usually sell for less than gold bars, simply because they contain less gold. This makes it easier for investors with less capital available to get started investing in precious metals.
However, gold coins are typically more expensive per gram than gold bars. With gold bars, you’re simply buying the gold. With gold coins, you’re not just buying the weight of gold, you’re also paying for the minting of the coin, and the potential value as a collector’s item.
Overall, both are worthy investments. Gold bars are a good option if you want to simply invest in the inherent, tangible value of gold and its power as an inflation hedge.
Gold coins allow you to leverage these same benefits, at a higher price per gram, but with the possibility of accrued numismatic value over time.
Tips for Buying Gold Coins
No matter what type of gold purchase you want to make, it’s essential that you work with a company you can trust. This is even more critical when it comes to gold coins.
Because gold coins have numismatic value, pricing is a little more complicated than for gold bars. This can make it easier for new investors to get ripped off. Unscrupulous dealers aren’t above inflating the numismatic value of gold coins.
If you work with a trusted gold and financial services company, you won’t need to worry about this. You can also rest assured that any direct gold purchases will be securely delivered, either to you personally, or to a storage facility of your choice.
Buying Gold Coins via a Gold IRA
Most people who want to invest in gold do so either by buying physical gold or via ETF shares. Both of these avenues can help you diversify your portfolio and hedge against inflation.
But did you know that you can also leverage the tax benefits of an IRA for buying gold?
This is what’s known as a gold IRA. Gold IRAs function the same as regular IRAs. But they also allow you to invest in gold and other precious metals, which traditional IRAs don’t.
If you want to learn more, read our guide to what is a gold IRA.
Are You Looking for a Trusted Precious Metals Company?
Whether you want to purchase a Queen Elizabeth gold coin, an American Eagle, Krugerrand, or gold bars, the most important thing to do is find a reputable precious metals company to buy through.
Allegiance Gold is America’s #1 most trusted gold company. We hold the highest possible rating with third-party consumer protection agencies. Allegiance Gold is also a member of the industry’s leading watchdog groups, including the ICTA, ANA, and US Chamber of Commerce.
Through us, you can directly purchase gold coins and bullion. We also administer gold IRAs for those looking to diversify their retirement investments.
Browse our gold products to get started. Or, contact us if you have any questions.