Golden Coins on white.
If you’ve ever watched late-night infomercials or at-home shopping channels, you’ve no doubt encountered gold-plated coins. These are often sold with promises of a great investment. Even better, you can buy them at a fraction of the cost of gold bullion. So, is this the best way to invest in precious metals?
Unfortunately, many people who purchase these items don’t get what they expect. The companies selling them aren’t technically lying about the coins, but they are offering false hope that they could be worth more one day. This typically is not the case, and people end up with nearly worthless investments.
At Silver Gold Bull, we think it’s important that everyone is informed about their investments. This means knowing exactly what you’re buying before purchasing it. Obtaining precious metals is a great way to invest in your future, but if you’re buying gold-plated coins, you’re probably just losing money.
It’s common to come across gold plating — also known as gold layering — in the collectible coin world. You’ll typically find this feature on extremely common coins that may otherwise only hold face value. Gold-plated coins are those which have had a thin layer of pure gold applied to their surface.
In most cases, you’ll find these coins sold in beautiful presentation boxes or capsules. Certificates of authenticity abound in this world, and as long as you’re buying from a real company, it’s typically safe to say these certificates are legitimate. In some instances, you’ll even find these gold-plated coins in sets.
Here are a few of the most common coins you’ll find with gold layering:
One important thing to note is that the Sacagawea dollar does not have gold layering right out of the mint. It simply has a gold-like finish due to its alloy metals. Like other common releases, though, it has found its way into gold-plated coin sets.
In most cases, gold-layered coins will have 24 karat coatings. The thickness of this layer, however, is only about 0.003” thick. To new collectors, this may seem like a simple way to add incredible value to an otherwise common coin. In reality, it does little more than add a bit of luster while retaining face value.
Common coins with gold layering certainly hold some worth. Unfortunately, it’s typically just the coin’s face value. The gold contained in the added layer may be worth mere pennies — literally one or two cents. A sympathetic coin dealer may offer you $0.30 for a gold-plated quarter — if you’re lucky.
Unfortunately, many people don’t learn this hard truth until they try to sell their sets. For instance, you can purchase a 50-state quarter set with gold-plated coins for $200 online. The face value of these coins, however, is only $12.50. The gold value is worth far less than that. So, why are people spending money on these?
It all comes down to price. People want to invest in bullion — especially when the price of gold is at record-high levels. When you have the option of buying a solid gold coin for nearly $2,000 or a gold-plated coin for $5, the choice might seem simple if you’re trying to save money.
Unfortunately, you’re essentially tossing money out the window. There are much better ways to invest in gold — even when you don’t want to spend very much. You will also come across collectors who believe gold layering devalues a coin. In the end, you’ll never get back the value you’re paying.
Many collectors believe that any gold layering devalues a coin. In reality, this isn’t always true. Gold plating and other alterations sometimes add a measure of collectibility. Unfortunately, that’s not what you’ll find on late-night infomercials. Very few coins gain value from this process.
There are three words to remember when judging the value of a layered coin: third-party plating. If a random company takes common coins and adds gold plating, it’s nearly guaranteed that they’ve added no value. When you find coins layered by issuing governments, though, it’s a different story.
Consider a few of the common layered coins issued by public mints:
These aren’t gold-plated coins, but they’re examples of layering performed by government mints. This does add a level of collectibility to the coins since they’re official releases. In most cases, though, you won’t find gold plating from these mints. Even worse, you may find copycat coins.
Consider the colorized American Silver Eagle as an example. An official release came from a partnership between the U.S. and Perth Mints. Long before this partnership, however, you could find coins colorized by third parties. Collectors would typically consider those damaged coins.
The lesson here is that altering coins doesn’t always detract value. Even gold-plated coins will retain their face value. Unless a public mint performed the layering, however, the coin is unlikely to hold any additional value.
People looking to save money on gold investing will often shop outside of traditional channels. Unfortunately, they frequently fall victim to fake gold coin scams. Without buying gold-plated coins or risking the purchase of counterfeit items, though, how is a person supposed to save money on bullion?
Fortunately, there are a variety of ways to do this. When you see American Gold Eagles selling near spot price, some people may think buying gold is a pipe dream. The important thing to remember is that you don’t have to buy an entire ounce of bullion when you make a purchase.
Governments understand there’s a demand for small quantities of gold. In fact, when demand for the precious metal reached a new all-time high in 2020, it was gram bullion bars and small coins in the highest demand. You can get these at a fraction of the cost of a 1-ounce bar.
Here are just a few affordable options that avoid the pitfalls of gold-plated coins:
You can find each of these items far below the price you’d pay for a 1-ounce bullion coin. The best thing is that they hold real worth as opposed to the false implied value of most gold-plated coins. This may sometimes come in the form of collectibility, but it’s a much better investment than a minuscule coating of gold.
Of course, there may be some coins you simply want to own with a gold luster. If these coins did not originally feature gold, what option would you have other than gold layering? The answer depends on the coin you’re seeking.
Gold-plated coins are almost always made from the most common currencies available. Fortunately, this doesn’t mean every gold coin that looks like a common issue is layered. For instance, the U.S. Mint began producing a 1-ounce American Gold Buffalo coin following decades of the Buffalo nickel’s popularity.
This is where things can get tricky. While the American Gold Buffalo issued by the U.S. Mint contained .9999 pure gold, there are also gold-plated varieties on the market. These are produced by private mints as collector’s items, and they hold nowhere near the value of the bullion offering.
This shows the real danger of gold-plated coins. It’s terrible that a person may pay $5 for a coin that’s only worth $0.25, and that’s why buying items from infomercials is never a wise decision. When someone buys a gold-layered coin thinking it’s pure bullion, though, that’s where big losses can happen.
This is why it’s so important to only buy coins — whether they’re bullion or layered — from reputable precious metals dealers. This will at least ensure you know exactly what you’re paying for.
When people purchase gold-plated coins, it’s typically because someone convinced them they hold value. After all, any amount of gold holds some worth. Unfortunately, the precious metal content you receive is almost next to nothing. With layered coins, you’ll usually end up with a common coin and worthless plating.
At Silver Gold Bull, we strive to ensure every purchase our clients make is a good investment. That’s why we offer authentic gold bullion coins with our Best Price Guarantee. Don’t waste money on gimmicks with no value when you can own actual precious metals. Visit our Gold Bullion page today to learn more!
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