Panda Gold Coins
Given that modern economies do not rely on gold-backed currencies and have not done so for a long time, the continuing popularity of gold coins can seem surprising. In the past gold was seen as the ideal store of value and medium of exchange because of its rarity, durability and beauty. Trusted by everyone and supremely useful as a basis for trade and commerce, gold formed the basis of most societies' economies for most of recorded history.
So how to account for the steadily increasing price of gold in all its forms in recent times? The answer lies in people's desire for safety in uncertain financial times. When property, stocks and bonds fall in value, gold prices rise as investors flock to buy a commodity regarded as recession proof.
The Panda gold coins issued by China are one of the most popular ways for investors large and small to acquire gold. Famed for the delightful images of China's iconic pandas depicted on one side of the coins, they have been eagerly snapped up by buyers every year.
History of Panda Coins
The first set of Panda gold coins was produced by China in 1982. The largest coin was minted at one troy ounce with a purity of ninety-nine per cent. Smaller coins were also issued at weights of half an ounce, a quarter of an ounce and one-tenth of an ounce. In the following years, the Chinese also issued a one-twentieth of an ounce coin as well as much larger five and ten ounce coins.
The reason for the enduring popularity of the Panda coins was the fact that a new image of a panda was designed and issued almost every year. This immediately attracted the interest of collectors, who naturally felt the need to acquire every new coin as it was minted and sold. The only exception to this policy of having a new image every year was in 2002, when the new coins turned out to be identical to the previous year. An outcry from coin collectors led to the Chinese changing course and reverting to the policy of producing a new design every year.
The Value of Panda Gold Coins
The original intention behind the issue of these Panda coins was simply to provide a means of acquiring gold bullion. The value of the coins therefore was tied directly to the price of gold on world markets. A one ounce coin would be worth one ounce of gold in any form.
However, the fact that the coins became collectible changed all this. The limited supply of each new design and the desire of collectors to buy them gave them a premium value over and above the price of the gold they contained. Of course, this premium also piqued the interest of canny investors, who recognised that buying the most sought-after Panda coins could lead to healthy profits.
One thing to be aware of when looking to acquire Panda coins is the question of how many are issued each year. Although the Chinese government releases figures detailing these numbers every year, the numbers are not necessarily correct. The official figure is usually just the target set by the government and is subject to revision over time. Since this revision is usually upwards, it is wise to take it into account when making the decision of whether to buy or not. Simple economics dictates that increased supply will lead to a fall in price.
Another factor to take into consideration before buying Panda coins is their condition. In the first few years they were regarded as mere bullion and treated as such. Many coins were stored rather carelessly and this meant that they could have become scratched. This has an obvious impact on their value to collectors, who like their coins to be in mint condition.
Conclusion
For new and experienced investors alike, Panda gold coins are a very good way to buy and profit from gold. They are easily available and because of their popularity are often worth much more than coins from other countries with a similar weight of gold. Given the upward trajectory of the price of gold in recent years, they could turn out to be an ideal investment.
