When first taking part in the coin collecting community, it can be difficult to understand where your eyes should focus. What collections should you attempt to complete first? Where do you begin looking for coins, whether in person or online? How long is it going to be until you understand what it is you are looking for? Although all of these questions have multifaceted answers, there’s a simpler question we should consider first; one that is likely to save you time and money in the long run: What is the difference between a bullion coin and a collectible coin?
Bullion and collectible coins might have some similarities, but there are differences that make them wholly unique from one another, especially when it comes to price. We’ll explore the primary differences between these two types of coins here, particularly to help you avoid being swindled by an unverified coin seller.
Bullion coins are coins made from very fine metals, most often from gold or silver. These coins are not bought for collecting reasons; they are purchased for financial purposes, either as a hedge against the USD or for investment purposes concerning the future. People investing in bullion coins are usually setting them aside to allow their worth to grow. They’ll either be placing them into a precious metals individual retirement account (IRA), setting them aside in their homes as a means of being unbanked, or to horde them in the event that apocalypse strikes humanity—monetarily surviving from the moment modern financial systems collapse. Bullion coins such as American Gold Eagles or Canadian Silver Maples are bought and purchased as a future investment. These are coins that will remain valuable for some time to come, making them a safe and secure asset to support your future with.
Sometimes referred to as numismatic coins, collectible coins are older coins, ones often no longer minted, sought after by hobbyists and coin specialists. Whereas bullion coins are valued solely for their metallic content, collectible coins are valued based on a significant number of factors, including their historical significance, rarity, physical condition, and more. These latter coins are usually valued above their metallic content.
While some collectible coins might be considered an investment, they are often not seen that way; rather, they are valued and collected for their worth within the field of numismatics. These coins can include Pre-1933 Eagles and Peace Silver Dollars. When first buying coins, pricing can be a tricky subject to attempt to tackle, especially if you’re buying from a local seller who doesn’t offer resources to verify their merchandise.
One of the best things you can do for yourself prior to making any purchases is to brush up on basic knowledge concerning the field of coins. Once you have a few resources on hand, you’ll want to begin asking yourself basic questions to determine which coin it is you’re looking for: Are you more interested in owning coins with historical value? Are you purely purchasing coins as a future investment? Are you concerned about the future of the global market? If you find yourself intrigued by the former option, you might be more of a collector; if you’re interested in the middle or latter ones, you’d be better off purchasing bullion.
Last, the moment of purchasing then becomes reliant on understanding what prices you should be looking at. If you need something to evaluate numismatic coins, you can never go wrong with the current year’s Annual Red Book of United States Coins. This resource is an apt way to double check the usual selling price for collectible coins, allowing you to determine if the price you are being asked to pay is fair or far too high.
For bullion coins, your best bet is to look for the current spot price of the precious metal your considering of purchasing. With this information, you can see how the seller’s evaluation of the coin compares to its spot price. Remember that most sellers will have coins slightly above the spot price, as there will be included premiums that come with the market; however, if you ever feel the need to double check, considering reaching out to a hobbyist forum or simply comparing the price from one site to another.
Take Your Time
Purchasing coins doesn’t have to be rushed. Take your time and determine just what it is you’re looking for before taking the leap into precious metals!