Smartest investment and life plans in UAE

Busted! 8 Myths about Gold Coins as an Investment

By
  | Published: 11 February 2020 | Last Updated On: 18 January 2021

Invest in GOLD and give a boost to your investment portfolio

Average Rating / 5 (ratings ) | 1205 Views
Investment in Dubai

T&C Apply

Smartest investment and life plans in UAE

By Clicking on "Proceed", I declare that I am a resident of UAE and hold a valid Visa and consent to my information being sent to Policy Bazaar’s Insurance Partner(s) to promote and provide me more information about their product. I also confirm that I agree to the website Privacy Policy and Terms of Use.
There are numerous ways by which investors can put their money in the gold market. They can choose to purchase gold coins, gold bars, invest in gold exchange traded funds, jewelry or scrap gold.

Any person, who is considering investing in gold coins that are also referred to as “rare” gold coins, should be aware of the several myths that exist about such an investment.

We will be considering the gold rate in UAE as an example in case of any clarification of concepts.

Here are some of the most common myths about investing in gold coins:

Myth No.1: Rare Gold Coins are Like Gold Bullions

Truth: The prices of bullions track the spot price of gold closely and the value of bullion is nothing more than its metallic worth. Rare coins are an entirely different species. The majority of the gold rate in UAE for the coin is tied to market worth and rarity of the fact that they are collectible coins.

Myth No.2: The Price of Rare Gold Coins Is Expected to Increase

Truth: Gold coins have the possibility of increasing in value, but the retail markups are generally very high. Therefore, in rare scenarios such as a purchase in bulk, you are likely to lose money at the given gold rate in UAE that may be offered to you.

Myth No.3: Gold Coins Are an Investment in the Market of Precious Metals

Truth: Gold coins are made of gold, however, a majority of its resale value is based on their worth as a collectible investment.

Myth No.4: Gold Coins Are Extremely Liquid and Can Be Sold Easily

Truth: It is a misconception that gold coins are highly liquid. In most cases, an investor has a difficult time selling them. Rare coins are a form of collectible investment and are difficult to sell unless a willing buyer is present.

Myth No.5: Gold Coins Are Easy to Store

Truth: Rare gold coins need to be insured and stored in someplace safe, something like a secure vault or locker. This is because they are exposed to the risk of theft.

Myth No.6: Reading Articles or Books Helps Investors in Mastering the Market of Rare Coins

Truth: The rare gold coin market is volatile and complicated. It requires a depth of knowledge that requires longer than just days or weeks of knowledge. You can gain some knowledge by talking to a trustworthy coin dealer.

Myth No.7: Rare Gold Coins Are a Great Investment

Truth: If you know someone who is trustworthy and has a good experience of investing in the rare gold market, then investing in gold coins can be the option for you. This is because one needs to understand the fact that this requires a long holding time in order to be profitable for them.

Myth No.8: Gold Coins Are a Smart Investment and Can Be Used as Money at Face Value

Truth: It is a big misconception created by many sellers that rare gold coins can be liquidated at the market gold rate in UAE and at face value. It is not a good idea to consider a rare gold coin as a financial cushion for stressful times.

In a Nutshell

People who are considering investing in gold coins should be aware of what they are doing or have someone trustworthy to advise them. There are many myths formed when it comes to investing in gold coins and one should consider all of the facts well before making any decision. Even a small amount of rare gold coins can in total cost a lot and not turn out to be very liquid.