Gold has always been a valuable asset, with its limited supply and high demand making it a popular choice for investors. Today, it remains one of the most traded commodities worldwide, offering numerous advantages for those looking to diversify their portfolios.
When investing in gold, there are various ways to buy it. Options include gold bars, coins, and even unique novelty items. Among these, 1-ounce gold coins are a particularly appealing investment option. But are they really worth your money?
Let’s explore why 1-ounce gold coins might be a smart choice for your investment strategy.
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Why 1-Ounce Gold Coins Can Be a Good Investment
Gold itself can be a good investment, but 1-ounce gold coins stand out for several reasons:
1. Affordable Entry Point
While you can invest in multi-ounce gold bars, their high price tags — often costing tens of thousands of dollars — make them unattainable for many. On the other hand, a 1-ounce gold coin costs around $2,100, offering a more accessible entry point for investors. This affordability makes them a practical option if you want to invest in gold without a hefty financial commitment.
2. Possible Tax Advantages
Gold coins can be added to a self-directed Gold IRA (Individual Retirement Account), which may come with tax perks. If you invest in gold through a traditional self-directed IRA, you make contributions on a pre-tax basis. With a Roth IRA, you can enjoy tax-free growth on your investment.
Additionally, some states offer sales tax exemptions on gold coins that meet certain requirements. For instance, in Michigan, investment coins like gold or silver are exempt from state sales tax if they have a higher market value than their face value. It’s worth checking your state’s tax laws to see if similar benefits apply to your area.
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3. Collectible Appeal
Aside from being an investment in gold, 1-ounce coins may also be collectible. Some coins feature unique designs like animals, historical figures, or nature scenes. Since these designs are often minted in limited numbers, they can become highly collectible over time. The rarest coins typically command the highest prices, adding another potential layer of value to your investment.
Other Reasons to Consider 1-Ounce Gold Coins
Beyond affordability and collectability, 1-ounce gold coins have other attractive benefits:
Inflation Hedge
Gold is often seen as a safe haven during inflationary periods. When inflation rises, the purchasing power of the dollar tends to decrease. Gold, however, can retain its value, making it a solid hedge against inflation.
Portfolio Stability
Gold isn’t just useful during inflation — it’s also a safe bet during times of economic uncertainty. According to Steve Azoury, ChFC® and owner of Azoury Financial, gold coins can help stabilize your portfolio when other investments might be too volatile.
Diversification Benefits
Gold’s value typically moves independently of stocks, bonds, and other financial assets. By adding it to your portfolio, you diversify your holdings and reduce overall risk. This lack of correlation makes gold an attractive addition for any investor.
Conclusion
Investing in 1-ounce gold coins can offer several advantages. They’re more affordable than larger gold bars, may come with tax benefits, and can even hold collectible value. Additionally, their role as an inflation hedge and diversification tool makes them a strong consideration for investors looking to add stability and long-term growth to their portfolios.
Ethan is a passionate rare coin collector with years of experience uncovering the stories and history behind unique coins. His insightful articles are a go-to for anyone curious about coin values or their fascinating backstories.