Investing in Gold Coins

Gold coins have been used by the investors as a way of protecting wealth. It can provide a stabilizing effect on investment during economic uncertainty and help the investor to get back to back rates. In today’s instant world, we no longer use passbooks to maintain the details of an account. We never look at our money as a tangible object. That’s why there is something very interesting and satisfying and solid about investing in Gold coins.

Besides any other investment in Gold, is a good option. You can buy gold coins and sell in the future. Going to a gold shop and buying a gold coin is a simple kind of investment which gives you higher returns in the future. 

In the UAE, the demand for gold is increasing year after year. Some people think that investing in Gold is an outdated idea but investing in Gold is a smart idea. You can also invest in Gold without buying the physical stock of gold. This kind of investment can be made by purchasing Gold mining stocks, exchange-traded products gold certificates and other kinds of Investments. The investor can take advantage of the gold Hedge against inflation. 

What you should know before investing in Gold Coins?

Gold coins were used as a medium of exchange in trade during the ancient period. Even after paper currency was introduced the value of gold did not decrease. People continued to buy gold coins, bars and gold jewellery. Whatever form of gold you buy it helps you in fighting inflation. 

The following are the things that you should keep in mind before investing in gold coins. 

  1. Check for gold purity 
  2. Check Hallmark
  3. Tamper-proof packing
  4. Making charges
  5. Bargain 

1. Check for gold purity

The purity of gold can be checked with two factors such as carrot and fineness. The UAE law has made it compulsory for all the Jewellers to sell the gold coins which are with the Hallmark of metal purity. 24 karat gold is the purest form there are other carats of gold also available in the UAE such as 18 carats, 21 carats, and 22 carats. The gold purity is authenticated by the Dubai gold and commodities exchange.

2. Check Hallmark

When you are buying gold coins apart from the purity you must also check for the Hallmark. Dubai Hallmark has been made compulsory from the year 2015. The gold coins contain a tag which shows carat and gold weight. The Dubai Central Laboratories department works to ensure that customers are being provided with the purest form of gold which certifies the level of purity.

3. Tamper-proof packing 

Always remember to buy gold coins that are in tamper-proof packaging. This packaging ensures that gold coins are safe and are protected against damages, fraud and counterfeiting. When you want to resell the gold, tamper-proof packaging has higher marketable value.

4. Making Charges 

Making charges on gold coins are comparatively less than jewellery. The making charges in Dubai start from AED 10 per gram to AED 500 per gram.

5. Bargain 

Bargaining provides a facility to you make your final deal price as the best price. Making charges on gold coins can be negotiated. 

Check: 3D map for customers at Dubai gold souk

Advantages of buying gold coins

Gold and gold ornaments investments are a traditional type of Investments. 

  • Gold prices increase when other investments decrease and provide a stabilizing effect.
  • During inflation, Gold acts as a bulwark.
  • You are not supposed to pay any capital gains tax until you sell the Gold coins.
  • In the worst financial situations, especially during currency devaluation, we can use these Gold coins.

Disadvantages of buying gold coins

On the other hand, buying gold coins has some disadvantages.

  • Investment in Gold coins is not like an investment in a company’s growth, unlike bonds and stocks.
  • You can’t expect any interest from tangible Gold coins.
  • To get the profit you have to wait for years so that the value of Gold increases.
  • If you have solid Gold coins there are chances for theft.

Click here for Gold as an Investment

Popular Gold Coins in the UAE

Gold coins can be purchased from banks, jewellery shops, stock holding companies and even from non-banking Financial Institutions. The popular gold coins in the UAE are

American Eagles- American gold eagle coins are one of the gold coins produced in the US Mint. The residents of Dubai can purchase them in smaller sizes from the quarter, half or tenth ounce.
Canadian maple leaf gold- it is another most famous Gold coin available in Dubai, which is one of the purest forms of Gold in the whole world.
Emirates Gold Bars- These Gold Bars are the purest forms of Gold Bars available in Dubai. They vary from 1gm to 1kg.
Al Etihad Gold Bars- These are the oldest forms of Gold Bars, available from 100gm to 1kg. These Gold Bars were introduced in the 1940s.

Take away

As soon as you decide to purchase Gold coins, buy it from a reputed Gold dealer or any famous financial institution so that you can have the Gold coins’ authenticity verified first. The advantages will not be available if you purchase Gold coins from any unauthorized dealer or any other individual who may not be able to provide pure Gold coins. Once you buy the Gold coins they must be stored safely in their cases, away from any kind of damages. It is also advisable to rent a locker in a bank to safeguard the Gold coins.

Meet the author
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Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It’s a commercial mortgage banking company. He has a “Doctoral Degree in Commerce” and two master’s degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.







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