With so many factors contributing to the recent record prices of gold, many experts are recommending that investors buy coins, such as government minted bullion coins, to protect wealth and create a valuable addition to a portfolio. Since the removal of the gold standards, consumer confidence is the only thing backing modern paper currencies, and consumers have little confidence left in the strength of the dollar, or any other national fiat money. The potentials for inflation increase dramatically as nations around the world devalue their currency by printing more to boost their exports. Investors are faced with exciting potentials and wealth protecting measures when they buy coins or other forms of gold bullion.
When they buy coins for bullion investing, people gain ownership of an alternative currency. Gold has always fulfilled the requirements of money as it is a store of value, a unit of account and a medium of exchange. Fiat currencies have proven to fail as a store of value, and with potentials for continuing declines, may even be unusable in the future, thus becoming useless as a medium of exchange as well.
When an investor makes the decision to buy coins, they are choosing to own a tangible asset that is accepted world wide as an object of value. Purchasing bullion coins, such as the Gold American Eagle or Gold Vienna Philharmonics, allows investors to own a commodity that is guaranteed, by the nation minting the coin, to meet an exact standard in weight and purity. This tremendously boosts the power of gold as a medium of exchange and a unit of account by providing an easy way to appraise its value and buy and sell the precious metal.
Since gold cannot be created, it remains in limited supply. Unlike fiat currencies that become devalued as more and more are printed to boost export power and payoff national debt, gold is finite. This combined with its tangible nature create a commodity that typically increases in value as inflation rears its ugly head. Investors buy coins as a hedge against inflation, and make a solid choice in doing so.
Many experts believe that the price of gold will continue to rise as the potential of currency wars drive down the value of global currencies and increase inflation. Gold still has tremendous room for growth when considering that its value still lies far below the inflation-adjusted price. Investors should buy coins and other forms of bullion to take advantage of the tremendous value of gold.