Over recent years an increasing number of bars and coins is made from gold/silver without being made as a straightforward investment: Because it is made, possible just sold, at a higher premium, justified by its special appearance or link to a popular cultural phenomenon.

In this article we will examine this form of purchasing gold and silver, to determine its merit. Should be noted that at moment of writing it is primarily gold and silver, other precious metals are also suitable, manufacturers simply have not gotten around to using them yet. Though platinum is gaining momentum. Copper is also not that rare, if you know where to look.

Pros

• It will always have the metal value. In some cases, a part of the sum paid, premium can also be added to a certain and very variable degree.
• One of the reasons that you are charged beyond mere market value is the quality of the item, usually proof-like or proof. Both of which are far prettier than regular, partially due to the addition of a nice box. It is likely that profit margin is only marginally different; batches are regularly upwards of 500 after all. But this does not matter much, you are willing to pay more for it, so they charge you more.
• Some of the collectibles are tied to childhood memories, so you get to feel nice by simply looking at them. Not that looking at regular precious metals is unpleasant.
• Once you have gotten started on buying them, remember that old coin restrikes also fit the bill: Made in small(er) batches for collectors and, presumably, sold with an extra high profit margin. The fanbase for these tends to be a lot bigger, as some are yearly editions, or simply because they are made by the official country mint; this greatly helps in maintaining value for a future sale.

Cons

• The premium paid over spot is unlikely to be fully recovered, if at all. There is an abundance of special strikes and only those coveted by the masses gain in value. Selling to a private collector directly could turn this around, but that would require effort and presumably some cost in searching. You can think of this as the price difference between two virtually identical product, just more extreme.
• The specially made boxes take up more room, making it hard to store or even buy them.
• Displaying your collection is difficult for two reasons: 1 Silver is burnt by the sun, it is possible to work around this but impractical and always a risk. Gold does not carry this risk but is smaller and usually they mint more in silver than gold, so displaying it is very pricey and less impressive. 2 Publicly displaying high value items is like inviting robbers to your house.
• The sole point of these special editions is to sell you more stuff. Therefor it does require you and you alone to see the value in them, beyond the metal content.

Conclusion

These are primarily to be considered as collectibles, which happen to be made out of something valuable. You can buy them, either as a (pricey) investment in precious metals and wait a bit longer for it to turn a profit, or simply as a collectible. Just be mindful of the added cost in getting it.

It is also a fun way to build your portfolio, certainly something which you can enjoy looking at and keep on collecting.