Gold coins are some of the interesting items in the „Coins“ subcategory in the platform for online auctions BalkanAuction. A lot of people think gold coins are related to past times, but they also have quite big appliance nowadays. But this appliance is not just about collectible value of gold coins. They are a very good investment tool which brings a great number of assets and benefits. Starting from the guaranteed by the issuing countries gold content and going to the extremely good demand of gold on the world market. First, the history of gold coins’ development, spread and role to the society will be reviewed. Then the accent will be on the main assets of gold coins as an investment tool.
History of gold coins dates back to the beginning of the Old World when the first major civilizations began to emerge. For example, the ancient Egyptians and the people who lived around Mesopotamia, spreading between the Tigris and Euphrates rivers in today’s Iraq. Materials such as gold and silver play an important part in the trading during the development of these civilizations. The chance of using them as an exchange or payment tool turns out to be convenient for the traders, handling great quantities of goods. These were mostly people who carried out their activities with help of vehicles such as ships or caravans. Once after gold has proven its appliance in the sphere of trade, people gradually started to think of ways to make it smaller in order to be used in different situations. This is how the transition between metal pieces with no precise shape and value and gold coins, which still preserve their significance for people and business, has begun.
The first coins in history of mankind were cut between 700 and 600 BC. in the Lydia region, which today is in the west part of Turkey. However, they are not entirely gold. For their production is used the substance Electrum, which is a mixture of gold and silver. Entirely gold coins are cut around 200 BC, on the territory of the Roman Empire. These gold coins are called „aureus“ and in most cases have 22 carats. Gold coins gradually became the most precious and important means of payment to the military legions, guaranteeing the security in different parts of the Roman Empire. Which is why during 1st century BC Emperor Julius Caesar introduced the regular use of the gold coin aureus. This first type of gold coin keeps its part and spread up until 4th century AC when it is replaced by another gold coin called solidus, which was released by Constantine I The Great.
The times of Roman Empire are related to an exceptional improvement not only in terms of civilization and formation of unified and working state institutions, but also of trading and using gold coins as basic payment means. At the end of the Roman Empire and the entry of Europe,in the era of the so–called „Dark ages“ the cutting of gold coins also starts to decline. During this era, the tradition of gold coins is preserved only in Constantinople, the capital of the Byzantine Empire (heiress of the Eastern Roman Empire).However, in Western Europe gold coins bring their spread, role and importance in terms of trade and public life back, but after almost a thousand years.
The revival of gold coins as a payment means begins around 1253. Then, in the Italian city of Florence, cutting gold coins called „Florin“ was launched. „Florin“ is the first gold coin after 7th century, which was cut in big enough quantities to have an important part in the sphere of trading. „Florin“ spreads pretty fast from Florence to other West European countries which issue their own gold coins, following Florence’s sample.
At the same time, increasing the trading force of Venice and turning the prospering Italian city into a carrier of goods between the East and the West make the process of accumulating great quantities of gold on the territory possible. This establishes the role of Venice in terms of cutting gold coins. After 1284, the Venetian gold coins called „Ducat“ begin consistently to be imposed as a payment means in different parts of Europe. In fact, the possession of large quantities gold coins of this type becomes a symbol of wealth, power and good position in the society at that time. The role and importance of gold coins „ducat“ to the trading and public life maintain in the next 300-400 years in Europe’s history.
During 16th century a new boom of processing gold and cutting gold coins begins. A few important factors have impact on this process. Firstly, the extraction of this precious metal in West Africa and its transport via sea to the European continent. During this period America is also discovered and explored. The continent becomes another source of gold. The European countries that played the greatest part in the overtaking and settlement of the new lands become centers of gold coin production. In Portugal are processed gold coins called „cruzado“, which are made entirely from African gold. In Sevilla are used the newly discovered troves in South America in order tosupply with sufficient quantities of precious metal for the production of gold coins. Gold coins also begin to develop in France, Great Britain, Italy, etc.
A key moment in the history of money is the appearing of paper bank-notes. They are used for the first time in Sweden in the end of 17th century. The spread of this new payment means takes some time, but gradually people realize the convenience and the assets of using bank–notes as a payment means. On the other hand, excessive cutting of gold coins decreases their value. All these lead to making paper bank-notes a legal payment means. Of course, this doesn’t mean that gold coins lose entirely their appliance in public life. Even today governments and banks all over the world pay in bank-notes, but pile up gold coins in their treasures. Nowadays gold coins are quite useful investment tool which brings solid guarantees to consumers and is well–demanded on world markets.
Nowadays a lot of people choose tocount on gold coins as an investment tool and such decision is logical and economically understandable. Gold coins have a great number of assets such as their resilience, smooth transfer, sustainability to inflation, etc. In the lines below the accent will be on every one of these gold coins’ assets:
1. Gold coins: opportunity for diversification of the investment wallet – this gold coins’ asset is quite important and at the same time not so familiar to most users. „Diversification of the investment wallet“ means making investments which are independent to each other. This way, if there is a problem with one of the investments, it won’t affect the whole wallet. Gold coins are an extremely appropriate tool to the diversification of the investment wallet’s goals. The main reason for the gold coins’ advantage is related to the features and specificities of the gold market. It is not that linked to stock markets, so it doesn’t follow their trends. It is very likely that if a stock market collapses, the gold market still thrives. There are a lot of cases to prove that. During both stock market crises (in the 70’s and 2008) white gold marks a significant increase in its demand and market values. Gold coins are a great way to diversify your investment wallet and make it more resistant to crises and emergency situations.
2. Gold coins: great future outlook – investing in gold coins guarantees you good enough financial outlook in the near future. This is due to the growing economies all over the world, which are making more and more investments in gold. This way they increase the demand for gold coins. China and India are some of the countries which consume the greatest quantity of gold and gold coins. The reason is not just the practical assets which gold coins bring to the finance. Maintaining personal savings in gold has its deep roots in Chinese and Indian traditions and cultures. On the other hand, the demand for gold and gold coins slowly, but positively increases in other world economies. Huge financial companies play an important part of this process, because they count on the assets of gold and gold coins as a secure and profitable investment tool.
3. Gold coins: higher prices – the good outlook of gold coins is not just related to the demand all over the world, but also to the movement of their prices. In near future the value of gold coins will not only be kept, but also constantly increased (even with a relatively slow pace). This is linked to the mining of gold in different parts of the planet. Nowadays the number of mines where gold could be found becomes smaller and that limits the gold quantity which will be available to the future generations. This tendency will continue in the following years. The higher the demand for a product is, the higher its price becomes. This applies to gold coins, too. Their owners will undoubtedly continue to benefit in near future.
4. Gold coins: protection against inflation – the resilience of gold and gold coins to inflation is practically an undisputed fact. Such proofs can be found in databases from the years when the greatest inflation happened in the USA. During this crisis periods the return on US stock market investment is only 12.33%. But the case about gold and gold coins was entirely different. The precious metal brings its owners a return of 130.4%. Such significant difference shows that in case of inflation and crises, gold coins are a safer and more reliable financial tool than stock market investments. Some older gold coins also have a collectible value, which makes them even more attractive and beneficial to the investors.
5. Gold coins: smoothly transferred – gold coins are small and easy to transfer. You may keep the necessary gold coins’ quantity in your home or even carry them with yourself. This way you can use gold coins in case of an emergency situation or if you just need them. Gold coins are a symbol of security and financial independence. They limit to a great extent the attempts of governments of different countries around the world to establish complete control over the lives and finances of their citizens.
Investing in gold coins (just as in any other financial tool) is a process which requires a great deal of attention and excellent assessment from the user. There are a few factors which should be considered. From the gold market trends to the terms of a particular deal. In the lines below will be shown some common advice which should be followed when investing in gold coins.
- checking the gold index – this undoubtedly is the first important element for people who have decided to bet on gold coins as an investment tool. It doesn’t matter if you are planning to buy or sell gold coins, you should be aware of the trends, changes and fluctuation of the gold market around the world. You should also constantly check the movement of the gold index. Current and reliable information is critical to the ability of a person to form an adequate assessment and to realize a successful and profitable financial deal.
- determining the investment goal – every serious and responsible to their finances person should have a clearly set goal and a future outlook when making a particular investment. One of the most important questions which should be answered before investing in gold coins is „What do I expect to achieve as a result from this investment?“. The person should know if making fast and high profits is the most important or the idea is to guarantee the reliability of the investment. When such questions receive their accurate answer, the amount of investment, type of gold coins, value and return over time will be clarified.
- reliability of the trader – another element that matters when buying gold coins. Make sure the trader who makes the offer is actually correct and reliable and that they won’t mislead you. If you are buying coins from popular online platforms, then you should definitely check the user’s rating. If it is too low or you have found unusually negative comments for previous deals, think again if it is worth risking your finances.
- option of returning gold coins – it is highly recommended that there is such option, regardless of how reputable and reliable the particular trader may seem. There may still be a problem with the gold coins- they may not match the description or price. The return option may be used if the gold coins do not match your expectations or desire. In such cases you have the option to return the gold coins to the seller in an exact period of time and to receive your money back.
- comparing prices between different traders – it is definitely not a good idea to rush and finish a deal with the first gold coins seller you find. Preliminary exploration and consideration of multiple offers will let you compare the prices of gold coins from different traders and choose the best and most profitable option in terms of your interests. However, make sure that you are actually comparing the same items and that there is no difference between the gold coins with regard to their appearance, value and other important elements of their characteristics.
- avoiding rare gold coins – buying rare gold coins requires certain experience in the sphere. Even if two gold coins look very much alike, they may have great differences in terms of their quality and value. Those differences may equal large amounts of money to the particular investor. Which is why you should be very careful when buying rare gold coins. However, if such gold coins have captured your attention, seek advice from experts or people who are well-familiar with the gold coins market before finalizing a deal.
- investing in gold coins on a regular basis – deals with gold coins are similar to those of stock markets. It is quite hard to foresee the ups and downs of the gold coins market, which makes investing a considerable amount of money in gold coins at once risky. It is more reasonable (in terms of security and financial benefits in the long run) to make small investments on a regular basis, while following the current process and trends of the gold coins market.
- gold coins as a tool for portfolio diversification – gold coins are used to diversify the portfolio for a better security and resilience in case of emergency market situations by a great number of investors around the world. If that’s the situation with you, it is highly recommended to match the percentage of gold coins in your portfolio with those recommended by most industry specialists. When using gold coins for diversification, they should be no less than 10% and no more than 30% from the whole portfolio of the investor.
- keeping gold coins safe – unlike other investment tools such as shares or funds, gold coins are a material estate. That requires you to keep them in excellent condition and to also find a secure and suitable place for keeping gold coins. The most common options are two. First, you can keep gold coins in a special safe-deposit box in your home, if this safe guarantees high enough level of security against thefts and different unpleasant accidents. You can also keep gold coins in a bank vault, but in this case you should pay a certain yearly fee. It is entirely up to your priorities, preferences and security ideas on which of these two options for gold coins protection you will count on.
- security – it should be considered again as it is such important thing when buying gold coins. Because not everything shiny is gold. In case of the slightest doubts it is recommended to back off or at least to rethink carefully. Your goal is to gain a financial tool which will bring you the desired profits in the long run. And this will definitely not happen if you come across unreliable sellers and gold coins with lower quality than the expected.
BalkanAuction is a platform for private online auctions aiming to connect users from Romania, Bulgaria, Greece and other Balkan countries. In it there are offered gold coins in the „Coins“ subcategory along with silver, bronze and other coins. The users of BalkanAuction can find a great number of gold coins with different quality and value. For example, gold coins used as an investment tool or old ones with collectible value. The gold coins offered in BalkanAuction are made during different historical times and come not only from the Balkans, but also from a lot of different countries. If you are looking for full and diverse gold coins collection, BalkanAuction is undoubtedly the best place for you. Here are the main accents from this product category:
- investment gold coins – in BalkanAuction you will find a great number of investment gold coins with different value. The diverse choice and the opportunity for negotiating for the best price for both the seller and the buyer are amongst the great advantages of the platform in terms of buying investment gold coins. Negotiating happens thanks to the online auctions made in BalkanAuction. They have different options aiming to make the interaction between the seller and the potential buyer of a particular item (in this case– a gold coin) easier. However, the rating system, based on comments from a user to another, lets every of the users learn more about the reliability and correctness of the other person. This helps the user decide if the deal is worth it.
- gold coins with collectible value – besides the typical investment gold coins, the users of BalkanAuction can also see coins with collectible value. These are gold coins from different historical times which have become extremely precious objects because of the scars of time they wear and the fact that they are quite rare and demanded by many people. It doesn’t matter if you are interested in having gold coins because of their aesthetics or you hope to sell them at a considerably higher price after some time, in BalkanAuction you will find suitable for your needs and necessities gold coins.
- gold coins from different countries – gold coins offered in BalkanAuction do not come only from Romania, Bulgaria and Greece. In the platform you can find gold coins which carry the tradition, history and culture of different countries around the world. From gold coins from the time of the Third Reich in Germany to American dollars, issued in the middle of the last century. Just spot your desired gold coins and take part in online auctions constantly made in BalkanAuction.
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