Many new buyers of gold coins worry as to the authenticity of their purchase. Obviously the lack of familiarity with gold coins can leave new buyers more vulnerable to fake coins. Firstly fake coins are not that common but they do exist and a buyer needs to be able to detect one.

Buyers need to aware of the fact that Gold is extremely dense, it is the 7th most dense metal, and the other 6 with the exception of platinum are unsuitable for the production of coinage. Platinum is a different colour and rarer than gold, so it is often more expensive than gold.

When it comes to purchasing gold coins, investors are often split between buying 22k and 24k coins.

Firstly to those who are unfamiliar with the terminology carat simply means simply a level of purity for gold alloys, the purity is measured as 24 times the purity by mass. In lay terms 24 carat is 99.99% gold (none or minimal alloy), and 22 carat is 91.66% (22 parts gold and 2 parts alloy). Understanding this leads to the question, why use an alloy? The primary reason is due to gold’s inherent softness, pure gold is extremely soft and malleable, in jewellery or coinage this is often unsuitable. Unsuitable because coins in distribution are susceptible to wear and tear, the alloy toughens the coin and copper is much harder. The alloy(typically copper but sometimes silver) that is added changes the colour of the coin, copper adds a red-ish brown colour(as evidenced in the Krugerrand) and silver being a less dominant colour softens the gold colour(as evidenced in the American eagle).

Accompanying the stock market rise in the last 6 months we seen a rise in bullish sentiment among financial commentators and analysts so along with metals, treasuries have suffered as investors look for ‘risk on’ higher yield investments. This is all predicated on the idea that the US economy is racing out of recession and there are blue skies ahead. However when the herd all rushes to one side of the room a degree of scepticism should be employed. There are some serious problems with the idea of a resurgent US economy unfortunately. One of those factors (which everyone is trying to explain away) is that US GDP actually shrank in Q4 2012 by -0.1% the first time we’ve had negative reading since Q1 2009.

Buyers are often unsure whether to buy coins or bars when it comes to investing in gold. Firstly people need to be aware that they are investing in gold not the coin or bar, coins or bars are simply different forms of the same product. That is not to say they are exactly the same value, there are advantages and disadvantages to both, but for the average investor who is unaware of these it is worth pointing them out.