Sovereign vs Non-Sovereign products: How to Choose?

Both sovereign coins and non-sovereign rounds and bars are portable, stackable and durable. Both are pleasing to the eye and are worthy forms of investment. So how do you choose the right Precious Metal product for you?

The choice between non-sovereign bars and rounds and sovereign coins depends entirely on your investing goals. Before making a purchase, it’s important to consider what’s most essential to you and your future objectives: Do you want your investment to have numismatic, or collectible, value? Is it important that you can use it as currency? While both sovereign and non-sovereign products function as worthwhile assets, their qualities and features are very distinct.

The benefits of sovereign coins

Gold eagle

2015 Gold American Eagle Coin

If you answered yes to both questions above, you’re likely interested in sovereign coins. These coins, regardless of their Precious Metal content, have a face value and can therefore function as currency as well as an investment. Examples of sovereign coins are the popular 1 oz Silver Maple Leaf or the 1 oz Gold American Eagle coins.

Why does it matter if they’re sovereign?

silver maple leaf

1 oz 2015 Silver Canadian Maple Leaf Coin

Sovereign products are backed by the government of a sovereign nation. The country that issued them assures their purity and Precious Metal content. Some investors choose sovereign coins specifically because they can be easier to sell back than non-sovereign rounds or bars.

Furthermore, sovereign coins can have substantial numismatic value. Not only do coins often have stunning, historically relevant or patriotic designs, certain coins’ value may exceed their physical worth depending on their age, condition and rarity. This does not apply solely to coins from the United States, like the American Eagle, that are popular with coin collectors. Some of the most popular sovereign coin products on APMEX.com come from around the world, including the Canadian Maple Leaf, the Austrian Philharmonic and the South African Krugerrand.

The benefits of non-sovereign rounds and bars

Like coins, non-sovereign rounds and bars are easy to transport and store and are nearly indestructible. If there’s a natural disaster or catastrophic event, chances are your rounds or bars will be in one piece. Though they may be very much the same physically, non-sovereign rounds and bars differ from coins in one essential aspect: they have no face value and therefore cannot be used as currency.

sunshine round

1 oz Silver Sunshine Mint Round

Non-sovereign rounds and bars can be manufactured by either a national government or a private mint. Their value is entirely dependent on their purity and Precious Metal content. While they have little value as a numismatic collector’s item, non-sovereign Gold or Silver rounds can be a prized investment.

In the event of a monetary collapse, it is more likely that bars and rounds will continue to hold their value. Many choose to purchase this form of asset precisely because Gold has maintained its value while even the most trusted currencies have fluctuated. Furthermore, because they don’t have as much numismatic potential as sovereign coins, non-sovereign rounds or bars tend to require less upfront cost.

Some of the most commonly purchased non-sovereign products on APMEX.com come from widely recognizable private mints like Johnson Matthey, Credit Suisse, Engelhard, Sunshine Minting, PAMP Suisse and even APMEX. Some examples of non- sovereign products are the 1 oz Silver Buffalo round or the 1 oz Gold APMEX bar. Non-sovereign products can be as small as 1 gram and as large a 1,000 oz bar!

Are sovereign coins or non-sovereign rounds and bars right for you?

APMEX Silver bar

10 oz Silver APMEX Bar

If you prioritize an investment in Gold, Silver or Platinum based on the numismatic and currency-based value, consider choosing a sovereign coin. A non-sovereign round or bar, on the other hand, is ideal if you’re more interested in the outright value of the Precious Metal. Many people consult a financial advisor before making any investments to discuss the best options for their personal financial plan. However, with online Precious Metals dealers like APMEX, it’s easy to purchase your products online at any time of the day or night.

Regardless of your preference, APMEX carries a vast selection of coins, bars and rounds. We’re happy to cater to your needs and investment goals. Please contact us with any questions you may have about Precious Metals, including sovereign coins and non-sovereign rounds and bars, at (800) 375-9006.

Top 10 Terms You Should Know Before Buying Precious Metals

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  •    Spot Price: Describes a one-time open market cash transaction price of a commodity, where it is purchased “on the spot” at current market rates. In other words, it’s how much the metal is worth at the time, which is determined by the London Bullion Market. Spot Price flexes just like the stock market. Prices rise and fall throughout the day. Every minute. Simply put, it’s the value of the metal.
  • Premium: The additional cost of a coin or bullion item, over and above the spot price of the Precious Metal contained in the coin. The premium includes the costs of fabrication, distribution and a minimal dealer fee. Rare coins carry an additional premium representing numismatic value, which is based on scarcity, quality, demand and intangible factors.
  • Bid: The price at which a dealer is willing to buy.
    Ask: The price at which a dealer offers to sell.
  • Bullion: Bullion items are purchased for the metal content and investment aspect of the Precious Metal. They can be Gold, Silver, Platinum or Palladium coins which closely follow spot prices and have little or no numismatic value (such as restrikes and modern sovereign mint bullion coins). It can also mean the form in which metal is shaped, such as bars, ingots or wafers. The most commonly traded Gold bullion pieces among individual investors in the United States weigh 10 ounces or less.
  • Numismatic Coins: Coins whose prices depend more on their rarity, condition, dates and mint marks than on their Gold or Silver content.
  • Market Loss Policy: It is common for Precious Metal companies to have a cancellation and Market Loss policy. For example, when purchasing from APMEX, once a confirmation number has been issued, the price is locked in for you and the transaction may not be cancelled, but only offset at our current ask price. Any deficit between the price at which APMEX sold  and the offsetting purchase price and or prices, is the purchasers responsibility only if the item(s) is cancelled or returned.  Any market gain on cancellations would remain the property of APMEX. Just like with Stocks, you never know what is going to happen the next trading day.
  • BU: Brilliant Uncirculated; used to describe a coin in new condition. It is for a coin that has no wear and shows original luster, but it may have light handling marks or other imperfections.
  • Fineness: The purity of a Precious Metal measured in 1,000 parts: A Gold bar of .995 fineness contains 995 parts Gold and 5 parts of another metal. The American Gold Eagle is .9167 fine, which means it is 91.67 percent Gold. An American Silver Eagle has a fineness of .999, meaning that it is 99.9 percent pure.
  • Obverse: The front of a coin. The device on the obverse usually consists of the image of one or more people or which contains the principal design of the coin.
    Reverse: The back of a coin. The device on the reverse of a coin usually consists of a country’s coat of arms or an insignia.

We hope that this information provided in this post gives you a better understanding of the terms that are commonly used among the Precious Metals community. For questions or to find out more information contact APMEX at (800) 375-9006 or visit http://www.APMEX.com.

Product Spotlight: 1 oz Sunshine Silver Rounds

For thousands of years, people have used Precious Metals as currency. In more recent years, investors have utilized coins, bars and rounds as investments. Buying Silver and Gold bullion is a great way to add to an investment portfolio because their value is based on the metal content, not the collectibility or numismatic value. The 1 oz Sunshine Round is a great example of a Silver bullion round. The reason this is called a round and not a coin is due to the lack of a government-backed face value. sunshine roundSunshine Silver rounds have a simple yet striking design that makes them appealing to investors and collectors alike. The obverse of the Silver round shows an eagle, the Sunshine Mint’s icon, while the reverse lists the .999 fine Silver purity. Because they have an unlimited mintage and no face value, these are referred to as bullion rounds. Primarily desired for their metal content, investors purchase these products as a hedge or general investment. Other buyers purchase these coins as a possible monetary source in the event of economic collapse.

One unique feature of 1 oz Sunshine Silver Rounds is the MintMark SI™ security feature, which provides buyers the confidence that they’re purchasing a legitimate product from the mint. Sunshine Minting also offers avalidator special item called the Sunshine Minting Decoder Lens (sold separately). This lens offers buyers of Sunshine bullion the ability to see the word “Valid” when held up to the product’s security feature. Additionally, when the lens is turned 90 degrees, a sunburst appears in the same location.

The 1 oz Sunshine Silver round is a great Silver investment. APMEX carries a wide selection of Silver and Gold products, including a variety of Sunshine Mint  , Silver bars and  . If you have questions about these products or about investing in Precious Metals, APMEX has a customer service staff ready and willing to help at (800) 375-9006.

1-oz-Sunshine-Silver-Rounds

How A Gold Backed IRA Can Help Protect Your Retirement

*This article was originally posted on LenPenzo.com.  If you’re interested in a Precious Metals IRA from APMEX visit http://www.apmex.com/irabenefits.

The stock market made great gains over the last several years. This year alone, we’ve seen the Dow Jones Industrial Average and the S&P 500 break multiple records. Even so, if you have a traditional IRA or 401k, your retirement funds could be at risk. In fact, if you read between the lines, there is plenty of evidence to at least suggest that there is major danger ahead for the stock market.

Thankfully, there are ways to protect yourself. One way is by diversifying your portfolio with a gold backed IRA.

What Is A Gold Backed IRA?

A gold backed IRA is a retirement investment that works much like a traditional IRA. In reality, there is one essential difference: With a gold backed IRA, you’re investing in gold, rather than the stock market. Therefore, your gold backed IRA will realize gains whenever the price of gold increases and losses when the price of gold decreases.

How A Gold Backed IRA Can Help Protect Your Retirement

There are several red flags that investors are beginning to notice. Between the fall of oil prices, the poor economic conditions in the Eurozone, and poor geopolitical conditions around the work; many investors feel as though we’re looking a market correction — or worse — dead in the eyes. The good news is: gold can help protect you from losses. Here’s how it works:

When investors start to get concerned with their ability to realize gains in the stock market, a sell-off typically ensues. That means that thousands of investors start to sell billions of dollars worth of stocks that they own. As a result, a market correction — defined as a period of time where the stock market value drops by 10% or more — takes place. In these cases, traditional retirement investments that are backed by stocks would take substantial losses.

However, when investors pull out of the stock market, many of them look for another type of investment that they believe will work well for them. The industry calls these investments “safe havens.” One of the most common safe haven investments is gold. So, as market values fall, demand for gold has a tendency to increase. As more and more investors start to purchase gold, the supply of the precious metal starts to decrease.

Following these trends, the basic law of supply and demand tells us that the price of gold will eventually increase.

In theory, while you may take losses in the stock market, you should also realize gains on investors’ flight to safety into gold because you’ve got a gold backed IRA. As a result, your losses would be tempered by the gains, assuming you were properly diversified.

Final Thoughts

Geopolitical conditions, economic conditions, and market conditions around the world suggest more turbulence ahead in the markets. The good news is a market correction doesn’t guarantee you have to be a victim. By protecting your investments with gold, you can minimize — or possibly even eliminate — your chances of losing a big chunk of your retirement funds.

Top Reasons to Buy from APMEX today

Whether you are already investing in Precious Metals and want to diversify your portfolio or you are looking to make your very first investment, APMEX is a great place for you to shop. But why? What makes us stand out from the competition? Consider the following reasons why you should buy from APMEX today!

  1. Our Selection – APMEX is proud of the huge number of different products we carry. We have arguably one of the largest selections for investors, offering options in Gold, Silver, Platinum and Palladium coins, bars and rounds from many worldwide mints, including classic pieces. Additionally, we carry the accessories and equipment you need to make investing easy.
  2. Useful Tools – We make it easier for you to keep track of your investments with tools available directly on our website. Our price charts help you see what has been happening in the world of Precious Metals and we offer tools for tracking your entire portfolio.
  3. Education – An educated investor is a smart investor and at APMEX, we strive to help our customers be as educated as possible and have a comprehensive understanding of the market and how to wisely invest. Because of this, we provide a number of resources to help you learn more about investing in Precious Metals of all types.
  4. Concierge Customer Service – Our customer service is unmatched. We offer live chat, email and phone-based customer service — basically whatever it takes to meet your needs and exceed your expectations.

While you can buy Gold online from a number of sources, there’s no reason to shop with anyone but the best — AMPEX. Let us show you what makes us special. Contact us at (800) 375-9006 if you have any questions or want to place an order. We are always here to help you, every step of the way.

Product spotlight: South African Krugerrand

Of all the notable South African coins, none is as well-known to collectors around the world as the Gold Krugerrand. This coin was first minted in 1967 as a way to market South African Gold to collectors around the world. By 1980, it was by far the most popular Gold coin in production around the world.

2015 gold KThe name Krugerrand is a blending of the words Kruger, for South Africa’s first and only president Paul Kruger, and rand, the unit of currency in South Africa. The obverse of the coin features the likeness of Paul Kruger while the reverse shows a Springbok antelope, the national animal of South Africa, along with the year of minting and the Gold weight.

The Gold Krugerrand is composed of a troy ounce of Gold, making it an easy way for investors to gather and hold on to Gold in coin form. The purity of the coin is .9167 fine Gold — one of the highest amounts available in a Gold coin. Krugerrands also contain a small amount of Copper to create their specific look.

It is important to note that production numbers of the Krugerrand vary greatly from year to year based on demand from the year before as well as certain international sanctions put in place at different times. This means that for collectors, certain years have a higher value than others. However, if you are investing in the Gold value of the coin, the weight and purity are always the same. It is important that you understand these differences when choosing coins for investing versus collecting.20156 gold K 2

Collectors may also be interested in purchasing a Proof Gold Krugerrand instead of a “regular” bullion coin. These are easily distinguishable from the bullion coins because they have a higher number of serrations on the edge and a mirror-like finish, providing added beauty. If you are planning to keep the coins for long-term collector value, choosing these proof coins may be a good option.

The history and elegance of the Gold Krugerrand makes it a desirable piece for any collector. The Gold content makes it a perfect piece for any investor.

State of the Market

With the State of the Union just behind us, investors are questioning what is the State of the Market? Where is the Precious Metals Market today?. Where has it been and where might it go? Let’s take a closer look.

The Past and the Present:

So, exactly where has the market been and where is it now? Let’s take a look at Gold first. Since the beginning of recorded history Gold has been a commodity recognized around the world. Gold stayed relatively constant through the 80’s and 90’s but in early 2000’s the price started to increase dramatically, specifically during 2006. As the economy and Wall Street fell, the price of Gold climbed reaching a peak in September, 2011. Since mid-December, 2014 Gold has seen a 10% increase in prices and continues to hover consistently around that mark.

Gold prices

Interactive spot price chart. Available at http://www.apmex.com/spotprices/gold-price

Looking at Silver we see much of the same trend in its history. With a lower entry point into collecting and purchasing Precious Metals, Silver bullion and Silver coins have long been a traditional investment and collector’s item. After the economic collapse in 2008, Precious Metals, both Gold and Silver, went from being traditionally overlooked to a go-to hedge for investment portfolios. Silver reached a nearly record-setting high price on April 28, 2011 second only to the long-standing record holding of $49.45 on January 18, 1980. Just like Gold, the month of January, 2015 was good for Silver showing the connection between the two metals.

Silver prices

Interactive spot price chart. Available at http://www.apmex.com/spotprices/gold-price

The Future:

With the inverse relationship between stocks and bonds with Silver and Gold, it’s hard to predict extremes but often we can find some expected market behavior. Gold analyst Ronald Stoeferle released a prediction and model for 2015 Gold prices saying “Monetary policy will undoubtedly be the key driver for markets, money and metals in the years ahead.” We will, “experience unintended consequences of these monetary interventions resulting in increasing volatility.”

The chart below from www.gold-eagle.com shows the probability distribution of possible scenarios relating to this same theory.

goldsilver122414-2As always, none of these predictions are certain. The one thing that is certain about Precious Metals, like life, is they’re unpredictable. Do your research, find a reputable purchasing source and go with our gut.

Cheers to 2015.

*The information in this article should not be taken as financial advisement from APMEX. The article is purely information and should only be used to help inform and help develop one’s own opinion about Precious Metals and their future. APMEX is not a licensed financial advisor.