Monday, 12 August 2013

How To Take Care of Your Bullion Investments

Investing in gold and silver bullion can be a great way to earn solid returns and protect your wealth. Every investment carries risks, of course, but bullion has proven to be one of the most stable and reliable investments around. For thousands of years, humans have sought to acquire gold and silver and have been minting coins. This long history of desire makes bullion an attractive investment. Still, caring for bullion does require a bit of knowledge and skill. In the following article, we will outline some key points to help you care for your bullion and protect your wealth.

Caring for Gold Bullion
Gold is one of the easier metals to care for. In fact, this is one of the reasons gold is such a sought after bullion metal. Gold is very difficult to tarnish, does not oxidize under normal conditions, and otherwise maintains its chemical and physical properties. Gold is nearly chemically inert and will not react with most chemicals or corrosive agents. Gold can be dissolved by nitro-hydrochloric acid, though it is unlikely you will encounter this strong corrosive agent. Gold is also highly resistant to scratches and scuffs.  All of these properties make gold easy to care for and as a result it is a favorite among investors.
One thing to remember, however, is that gold is a very soft metal. It is possible that you could dent a gold coin if you drop it onto a hard surface or from a considerable distance. For these reasons, it is often best to keep your gold coins in a sealed case and handle them sparingly. You should seal gold coins separately in their own sealed cases and keep them in storage as much as possible. Still, most gold bullion is valued for its metal content, so if you do damage a gold coin, not all is lost.
Caring for Silver Bullion
Silver offers another great investment opportunity. Besides gold, silver is the most common choice for bullion coins. Unfortunately, however, silver is not as  resistant to damage or wear and tear as gold. While silver is a resilient metal, it can oxidize under normal conditions. At the same time, silver is easier to tarnish, scratch, and scuff. Make no mistake, silver is not a fragile metal, but it will require a bit more care than gold.
Silver can easily be tarnished by Hydrogen Sulfide, which is found in numerous things, including fossil fuels, food, paint, and latex. So don't use latex gloves when handling silver and make sure your hands are clean! It is very easy for hydrogen sulfide to accumulate on your skin and then rub off onto your coins, if you should choose to handle them. For this reason, you should handle your silver bullion coins sparingly.
Like gold coins, you should keep your silver coins stored away and handle them sparingly. Silver coins should be either encased separately or stacked into a tube. Do not store them in a ziplock bag or in any other way that will allow them to rub up against one another (and thus cause friction and damage). In order to reduce tarnishing, you can also add some charcoal bought from a pet store and silica gel to reduce moisture and other conditions that could cause silver to tarnish.
Will Scratches and Tarnish Diminish the value of Bullion Coins?
It is important to understand that scratches and tarnishes generally do not affect the value of bullion coins. Bullion coins are valued for their weight and purity, not their shine or condition. Of course, a large gauge in a bullion coin could reduce its weight, but usually small scratches or a thin layer of tarnish will have little impact on the value of a bullion coin.
That being said, scratches and tarnishing can have a slight impact on the value of bullion coins. The simple fact is that people are drawn to things that are in “mint” condition, including bullion coins. This means that sometimes people, especially in the secondary market, may be willing to pay a bit more for a mint condition coin. Mint condition coins may also be more liquid as there will be higher demand for them. Dealers, however, usually pay more attention to weight, purity, and where the coin was minted.
The value of a numismatic coin, on the other hand, can be greatly impacted by scratches and tarnishing. Numismatic coins refer to coins that are valued for reasons beyond their weight and purity. Ancient coins from past civilizations, for example, are no longer valued for their metal content but instead as ancient artifacts. The value of these coins can be greatly impacted by tarnishing and scratches.
Wrapping Up: Keep Your Bullion Protected
While bullion coins are relatively sturdy, that doesn't mean that you should neglect them. Remember, bullion is an investment, and like any investment you should care for your coins to ensure that they remain in the best shape possible. Careful handling and storage can ensure that your investments retain their value. Don't treat your coins like toys and only handle them when necessary. By and large, you should keep your coins safely stored away, and only take them out for cleaning, to be sold, or for other important purposes.