Interest in gold is soaring for the usual two reasons, according to gold expert Scott Travers: people see it “as a hedge against calamity and as a hedge against inflation.” He recommends owning collectible gold coins as opposed to bullion, mining stocks, futures, and common coins such as Canadian Maple Leafs and Krugerands. As explained in last week’s column, in the event the price of gold declines, collectible coins tend to hold their value better.

Trouble is, it’s hard for the average person to know whether the coins they’re buying are the real deal and whether they’re paying a fair price. Here’s where common sense and a little bit of homework can really pay off.

First and foremost, it’s essential to buy coins that are certified by one of the two nationally recognized grading services -- either PCGS, the Professional Coin Grading Service, or NCG, the Numismatic Guarantee Corporation. Beware of “certifications” from other services that have similar-sounding names. Collectible coins carry a rating of “60” or higher. (“70” is the highest rating a coin can receive.)

Travers, author of The Coin Collector’s Survival Manuel, which was just published in its 6th edition, recommends collectible gold coins such as Saint Gaudens or Liberty Head double eagles. In general, these should be priced at a small premium over the current value of the actual gold the coin contains (~1 ounce). For instance, he says if gold is selling for $1,000/ounce, a Saint Gaudens double eagle gold piece graded 60-62 should cost around $1,700.

He also strongly advises only doing business with an authorized dealer affiliated with either PCGS or NGC. You can find a list of dealers at www.pcgs.com or www.ngccoin.com.

Be wary of purchasing coins online. It’s difficult to accurately assess the quality of a coin based on an online photo or to know whether the certification is legitimate. However, the Internet is a tremendous help when it comes to judging whether the price you’re quoted for a coin is fair. Pcgs.com offers a comprehensive price guide that allows you to compare coin quality and cost.

Once the coins are in your possession, Travers stresses you don’t want to store them in a bank safe deposit box -- which he says, “goes against the idea of using gold as an insurance policy.” If the bank locks it doors, owning gold doesn’t do you any good because you can’t access it. He’s adamant that you should “always take physical possession of gold.”

There’s an entire chapter in The Coin Collector’s Survival Manual on the topic of how to store your gold. According to Travers, in the past three months he’s received more questions about this than at any time since the first edition of the book came out 25 years ago.

Shoe boxes are out. Home safes are a must. But not just any home safe will do. Since collectible gold coins are housed in plastic cases, this is more complicated than you might imagine. If the coins are stored in a typical “fire safe,” if there’s a fire the internal temperature could rise to 300-degrees or more. Paper documents would survive, but plastic would melt. You’d have to take your coins to a specialist to have them cleaned -- a costly process.

Instead, Travers says collectible gold coins should be stored in a “data” safe, which is designed to protect DVDs and similar documents that are susceptible to damage at lower temperatures. A data safe only gets as hot as 125-degrees or less in the event of a fire or explosion -- not enough to melt plastic.

Travers advises against hiring someone to install the safe for you. “Trust nobody.” Instead, he says, buy a data safe “off the shelf at Target (TGT) or Wal-Mart (WMT).” He further recommends making the purchase at a store that is not in your immediate neighborhood in order to reduce the possibility of being recognized by someone who might know where you live. (Dark glasses, fake moustache and baseball cap are optional.)

As an additional precaution, he advises that you “pay with cash.” No sense leaving a paper trail via your credit card. When you get the safe home, be sure to bolt it to the floor.

Presumably not in the foyer.