Myths about Gold Coins – Demystified

by admin on November 30, 2013

Gold coin trading is a lucrative business and good gold coins act as brilliant financial investments. However, there is quite a lot of confusion shrouding gold coins. This brief guide shall look at a few myths surrounding gold coins.

A Rare Coin’s Value is Directly Proportional to its Population

Population reports are carried out by certification services; they give an idea of how rare a certain type of coin is. As such, some people work out the value of a coin dependent upon the population reports. However, these reports aren’t necessarily all that reliable.

A common high-mintage modern coin might come up with a low population in a report, but this isn’t due to rarity, it’s due to the commonality of the coin. It’s so common that people don’t often submit their coins for gradation as it won’t be worth it.

Gold coins are brilliant financial investments.

Alternatively, if people resubmit a coin for gradation in the hopes of an increased value, the same coin is listed in the report twice. As such, rare coins can appear to be more common than they actually are.

Gold Coins are Always More Valuable than Silver

You may assume that gold coins are more valuable than silver coins; this would follow naturally as gold is a more valuable metal than silver. However, gold depreciates in value if not looked after just like any other metal. As such a well-maintained or especially rare silver coin can really outshine a gold coin, for more information click here.

Therefore, when investing in gold coins, you need to make sure that they are in great shape; otherwise they could be far less valuable than you thought.

Rare Coins are traded on Wall Street

There are rumours that certain coins were used as investment vehicles on Wall Street. This was true at one point during the 1990s as Lynch and Peabody set up a limited partnership. However, this soon liquidated due to disastrous results.

Therefore ignore what people may say to try and sell coins to you, Wall Street is not an established or legitimate place of sale for gold coins, nor does mention of it add to the coin’s value.

Coins Only Perform Well During Inflation

While it is true that there has been a marked trend of coins doing well financially during times of inflation, this is not the only thing that means coins perform well. There have been times where fear of inflation has encouraged people to choose to invest in more tangible alternatives, and as such the coin market flourished. However, during other periods of inflation-related fear, the coin market hasn’t been affected. Equally there have been times when the value of coins has rocketed due to demand completely independent of inflation.

Therefore gold coins can be a valuable investment, even when inflation fears aren’t present.

Most Certified Coins Trade Sight-Unseen

There is the view that now there are various gradation systems in place for valuing gold coins, the need for viewing them beforehand has been negated. While this may be practically true in a sense, it is very difficult to replace personal verification and most coins still trade on a sight-seen basis.

Although the grades are usually pretty reliable, there is space for quality differentiation within the grades, and buying sight-unseen means you take a risk of accepting the lowest quality coin within that grade.

However, with some more popular and common coins that act as wise investments but don’t change much within each grade boundary, dealing on a sight-unseen basis is often a simple and practical way of doing business.

Gold coins are more reliable than most other investments.


Gold coins are a great investment and can be more reliable than some less tangible alternatives, but there are some common misconceptions around the industry. Hopefully this article has cleared up a few of them allowing you a more informed entry into the gold coin market.

Image credits: tsuihin – TimoStudios and motoyen

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