©iStockphoto.com – npix

Question: What is your opinion on investing in gold nuggets?

Answer: Another awesome question! This is actually a topic I had thought about before, but never quite pulled the trigger because I know so little about gold nuggets. However, after reflecting a bit, I do feel I have some value to add on the topic. Thanks so much for the question - read on for my thoughts about gold nuggets.

Let's start with the obvious: Gold nuggets are just plain cool. Check out the gold nugget in the picture above, it's quite amazing. There's something mysterious yet beautiful about gold nuggets - they represent gold in its purest form and bring us back to the days of the California Gold Rush. For these reasons alone, I think it's a great idea for gold investors and collectors to own at least one gold nugget in their portfolio. I don't own one just yet, but it's definitely something on my list!

While I think it's a neat idea for everyone to own a nugget in their gold portfolio, I also must highlight that you should be careful and not deploy too much capital, unless you really understand gold nuggets. One of the best things about modern gold bullion coins such as the South African Krugerrand and the gold American Eagle are their uniformity. These coins are well known around the world for their gold content and purity. You can buy and sell these coins anywhere! Unless the are damaged (which is not too common given the relative strength of 22 karat gold), the value of these coins is undeniable. However, there are many factors at play with gold nuggets. What is their weight? How about density? How much gold content versus quartz content? Due to these factors, you only want to spend a lot of money on gold nuggets if you're an expert and can decipher their true value. These things are beyond me right now, but definitely something I'd like to learn about. The greatest thing about the gold world is the limitless niches within the hobby, creating years and years of learning.

So, you know my position for beginners: Tread lightly and pick up a gold nugget or two for fun, keeping the purchase price to a minimum. However, what if you're an expert? If you're an expert on gold nuggets, I'd imagine you can pick up some bargains! With more complexity is more opportunity. This alone could be reason to become an expert. Once you pick up some bargains, however, you'll want to keep in mind that it won't be super easy to sell them. The market for gold nuggets just isn't liquid like it is for gold bullion coins. One option might be melting your nuggets into bars which tend to be more liquid (especially if you get an assay certificate when you create the bars) but then again doing so will destroy the beauty of your nuggets (and cost you some serious money)!

Another interesting point about gold nuggets: I have been researching the world of gold prospecting a little bit. There still exist a variety of places where you can hunt for gold nuggets on your own. This requires expertise and equipment. Don't have any friends who are gold prospecting experts? Don't worry! I have found vacations where you can get a guide to show you how to hunt for your very own gold nuggets. One example is Arizona Gold Adventures. This is something else that I'm looking forward to doing one of these days. One thing is fore sure: I continue to enjoy the many niches within gold and precious metals and gold nuggets are very neat!

Buy Gold Nuggets on eBay

Related Gold Images

American Eagle 22 Karat Gold Coins
South African One Ounce Krugerrands