What are fractional gold coins? They are gold bullion coins which contain less than one Troy ounce of gold. For example, a ½ oz gold bullion coin is a fractional gold coin.
Why would one want to buy gold coin in fractional sizes? There are three main reasons. Most bullion coin issues are available not only in one-ounce sizes, but also as a half-ounce, quarter-ounce and ten of an ounce.
1. You don’t have to spend as much all at once.
With gold now selling at over $1,300 an ounce, buying even a single coin can be a stretch sometimes. And the more prices go up, the harder it will become to find the spare cash to buy more coins.
For this reason, being able to buy gold bullion coins in smaller sizes enables you to buy gold more often, at a more affordable price per purchase.
2. When you buy gold coins as a gift.
Gold bullion makes for a wonderful gift, whether at Christmas, for a birthday, a wedding or for some other special day or event.
If you want to give a one-ounce coin, or more, that’s fine. But if your budget or the circumstances call for a more modest expense, you can buy a fractional gold coin and give it as a gift.
3. More flexibility when you sell.
If and when you want to sell any of your gold coins, it makes sense to have them in different sizes, with different values. Maybe you want to convert some gold to cash, but if you have only one-ounce coins, you are going to have to convert a minimum of one coin for $1,300 or so in cash.
But what if you only want a few hundred dollars in cash, and want to leave the rest in gold?
If you own some fractional coins, it does give you a lot more flexibility when it comes time to sell.
On last thing…
When you buy fractional coins, your dealer costs will likely be proportionately higher than when you buy one-ounce coins.
Keep this in mind. Think about how much gold you might want to give as gifts, or sell for cash. Keep a few fractional coins in hand. But it does make sense for you to hold most of your bullion coin holdings in the form of one-ounce gold coins.