How to make money on coins from precious metals

What are the coins

When talking about investing in precious metals, we are talking about special coins that are issued for investors and collectors. They have a face value, but they are not allowed into circulation, that is, at the checkout in Pyaterochka, you will not be given a coin made of precious metal. If you want to find treasure in store change, read the article about how much coins are worth in your wallet.

Coins made of precious metals are investment and commemorative.

Investment coins are, in fact, the weight of metal guaranteed by the state, designed in the form of a coin. The circulation of such coins is large, tens and hundreds of thousands, so they are not considered rare and they have little collection value. But they are easier to sell. For investment in precious metals, it is better to buy bullion coins.

Commemorative coins are usually minted on the occasion of important historical dates. Usually circulations are small: from 100 pieces to 25 thousand. The main value is collectible. The price of commemorative coins depends mainly on demand from collectors, so they are more difficult to buy or sell, and investing in them is more risky – but potentially more profitable.

Formally, investment and commemorative coins of the Central Bank of the Russian Federation are just coins.

Coin quality

Investment and commemorative coins always look “smart”, as they are minted on special equipment with high quality minting. Most often they are released in one of two states.

Excellent condition, or AC – from the English UNC, Uncirculated, – “were not in circulation.” In this state, investment coins are more often issued.

Improved quality, or Proof, – when the surface of the coin becomes “mirror”. This makes them even more attractive in appearance, but increases the cost. In this state, the Central Bank more often mints commemorative coins.

How to determine the value of a coin

Precious metal coins are not a currency, so there are no official rates at which they are sold or bought. To assess how favorable the conditions are offered to you, you first need to calculate the value of the coin. Most of all, it is influenced by two factors: the mass of the metal and the circulation.

The amount of metal can often be found on the coin itself, the mintage can often be found in the reference materials of the banks or the mint that made it. Information on Russian coins is published by the Central Bank.

For example, let’s take the silver investment coin “George the Victorious” of 2017:

Metal: silver 999/1000.  This confirms the sign Ag 999 on the coin on the left.

Weight of metal: the content of chemically pure metal is not less than 31.1 g. The same weight is engraved on the coin. 31.1 grams is 1 ounce. According to international tradition, the weight of coins made of precious metals is a multiple of ounces.

Circulation: up to 500,000 pieces. This is a lot, so the first time the circulation will not affect the value of the coin. An asterisk near the circulation indicates that this is a plan, but how many will actually be minted is still unknown. If there is less than the plan, then the coin will become rarer and its value will increase.

Conclusion: the silver coin “George the Victorious” is the Russian equivalent of 1 ounce of silver 999. The accounting price of the Central Bank for silver on February 8, 2022 is 54.76 R per 1 gram. The metal in the coin is worth 31.1 × 54.76 = 1703 R.

Accounting prices for precious metals

The cost of investment coins is relatively easy to calculate, because it is highly dependent on the amount of precious metal. With commemorative coins, everything is much more complicated: their value depends more on the circulation and popularity of the coin among collectors. For comparison: the silver coin “155 Years of the Bank of Russia”, in which one ounce of 925 silver, retails from 3000 R – an almost 100% markup. And maybe 200, and 500% – and this depends little on the metal.

The Central Bank does not publish prices for commemorative coins. Therefore, if you are not an expert, it remains to focus on the prices of different sellers. It is easier to compare them in catalogs, for example, in the Find-coins catalog of commemorative and commemorative coins.

How to choose investment coins

Investment coins are, in fact, bullion of precious metals, so for an investor there is not much difference between them. They are distinguished from ingots by the absence of 18% VAT upon purchase and the possible collectible value. It is usually small for investment coins, but there are factors that can increase it: for example, a small circulation or a popular theme. Collectors are more willing to buy sports or animal coins, and if the coin is also quite rare, its value grows faster than the value of bullion.

To increase the profitability of their portfolio, investors usually choose the most promising coins and buy several dozen. Let’s look at investment coins on the website of the Central Bank and choose those that have a higher collection value.