A. If you are thinking about long term investment, gold coins, or even gold ETFs are probably not the best investments.
Why gold coins are not good investments? For several reasons:
- Not cheap - a gold coin' value is not just tied to the metal itself, there is historical value attached to it too, consequently dealers tend to charge a premium to it.
- Poor liquidity - if you have many gold coins, you need a safe place for them, which means storage fees. Also liquidating gold coins could take time.
- No interest or dividend - gold coins won't pay you dividends or interests.
Compared with gold coins, gold ETFs such as SPDR Gold Shares GLD are probably a better investment vehicle if you really like gold, as gold ETFs offer liquidity and enable you participate gold's ups and downs.
If you want to avoid the volatility associated with a single commodity, you can invest in a diversified natural resources ETF such as iShares North American Natureal Resources - IGE which outperformed GLD in the past 5 years.