An Overview of Gold Coins

Gold is a typical form of investment for many. There are different types of gold coins available on the market depending on how they are valued. Bullion refers to high panty gold that are usually kept as bars, coins, or ingots. Other gold coins that are available for sale gain value as a rare collectible. However, collectors risk getting a rare coin worth less than the gold’s melt value.

For thousands of years, the free market has chosen gold as a preferred form of currency due to its portability, high value-to-weight ratio, and difficulty to counterfeit, thanks to its density. Additionally, it is fungible, meaning all units of gold hold the same value, and divisible, ensuring its value is not lost when divided into smaller portions. Moreover, gold is incredibly durable, as it does not corrode or tarnish over time.

Gold coins were first minted in Anatolia during the 6th century BC, marking a significant moment in history. Nowadays, modern bullion coins are available in a range of sizes, including 1 ounce, 1/2 ounce, 1/4 ounce, 1/10 ounce, and even 1/20 ounce options.

Numismatic Coins Pre-1933

Gold coins have served as the primary currency for many centuries, but their usage declined by the early 20th century. The adoption of the gold standard to determine the value of the dollar was abandoned by most countries in 1933 due to hoarding during the Great Depression, leading to a discontinuation of gold coin production for currency use. The United States completely transitioned in 1971, overturning the previous ban on investment ownership. For numismatic purposes, gold coins must not contain alloys like manganese brass. Some legal tender coins are not circulated, serving primarily as investments and collector’s items.

Numismatic coins’ worth is based on factors like age, rarity, condition, and the number of coins originally minted. The Spur Royal is a prime example of a highly sought-after collector’s coin. The coin’s grade, a numeric score assigned based on its physical wear, is also significant. Common grades include good, fine, and un-circulated. The Universal Rarity Scale and Sheldon Rarity Scale are used to assess a coin’s rarity.

Investors must be cautious of dealers who encourage them to buy pre-1933 US gold coins that are priced substantially above their melt value. Despite flashy plastic cases with grades and holograms, many of these coins are not particularly rare. Unless one is well-versed in rare coins, it is wise not to pay more than a few percent above a coin’s melt value unless money is not an issue. While collecting coins can be an enjoyable hobby, the industry is rife with swindlers and inflated prices.

American Gold Eagle

The American Gold Eagle serves as the official gold bullion coin of the United States, with its initial release dating back to 1986 following the Gold Bullion Act of 1985. The coins are frequently referred to by their weight, as the term “eagle” was previously used to describe ten-dollar gold coins distributed in the US prior to 1933.

On the obverse side of the American Gold Eagle, Lady Liberty is depicted, while the reverse side portrays an eagle holding an olive branch flying over a nest containing a female eagle and her hatchlings. The US government assures that the current eagles contain the precise amount of gold weight measured in troy ounces or units. The coins are available in various sizes, including 1/10 oz, 1/4 oz, 1/2 oz, and 1 oz, with face values of $5, $10, $25, and $50 USD, respectively. Although eagles hold legal tender status, their true value exceeds their face value due to their troy weight and current gold prices.

Perth Mint Bullion

The Australian Gold Nugget, which is a part of the Gold Nugget series that was introduced in 1986, is a bullion coin manufactured by the Perth Mint. During the initial years between 1986 and 1989, the coin’s reverse side showcased various Australian gold nuggets. However, in 1989, the design was altered to feature kangaroos, which is an internationally recognized symbol of Australia. These coins serve as both legal tender and bullion coins.

The 24-karat gold coins are designed in various new styles, with some coins having a numismatic value that surpasses the actual value of the gold they contain. The coins are produced in different denominations ranging from 1/20 oz, 1/10 oz, ¼ oz, 1 oz, 2 oz, 10 oz, and 1 kg. In 2011, the Perth Mint created a colossal one-tonne coin that carries a face value of $1 million, breaking the record for the world’s largest and most valuable gold coin. Additionally, the Australian Gold Lunar bullion coins have a purity of .9999 and showcase Chinese calendar animals instead of the usual kangaroo.

Canadian Gold Coins

Canadian gold coins are coins made of gold that are minted by the Royal Canadian Mint. These are made with gold of high purity which are at least 99.99% pure. The most popular Canadian gold coin is the Canadian Gold Maple Leaf, which was first minted in 1979.

The Canadian Gold Maple Leaf is a bullion coin that features the image of Queen Elizabeth II on one side and a maple leaf on the other. It comes in various sizes, ranging from 1/20 of an ounce to 1 ounce, and is widely traded as an investment product.

The Royal Canadian Mint also produces coins such as the Polar Bear Series and the Wildlife Series in addition to the Canadian Gold Maple Leaf. These coin series have unique designs that exhibit Canadian culture and wildlife.

Investors and collectors value Canadian gold coins for their purity, quality, and aesthetic. It is a common way to diversify an investment and portfolio and hedge against inflation. Collectors value the historical and cultural aspect of gold coins.

South African Mint: Krugerrand

The South African Mint produced the first Krugerrand in 1967. the coin was named after former South African President Paul Kruger. His portrait is found on the obverse side of the gold coin. Originally intended to promote South African gold, the Krugerrand was used both as legal tender and a bullion coin. Its global market dominance was impressive, reaching 90% by 1980. The obverse side of the coin depicts Paul Kruger, the South African Republic President from 1883 to 1900, while the reverse displays the South African unit of currency, known as the “Rand”.

The Krugerrand is a bullion coin, which means it is primarily valued for its gold content rather than its rarity or historical significance. It is made of 22-karat gold, which is a mixture of 91.67% gold and 8.33% copper, and has a total weight of 1 troy ounce (31.1 grams).

One of the unique features of the Krugerrand is the design that was created specifically to make it easy to identify and trade on the international market. The obverse side of the coin features the image of Paul Kruger, along with the words “SUID-AFRIKA” and “SOUTH AFRICA”. The reverse side of the coin features a springbok antelope, along with the words “KRUGERRAND” and the year of minting.

The Krugerrand quickly became a popular investment product, especially in the United States, and remains one of the most widely traded gold coins in the world. While it is primarily valued for its gold content, it is also prized by collectors for its historical significance and distinctive design.

Why Buy Gold?

There are several reasons why one might consider purchasing gold bullion:

• Diversification: Gold can serve as a diversification tool in an investment portfolio. It has a low correlation with other asset classes, such as stocks and bonds, and can help reduce overall portfolio risk.
• Inflation hedge: Gold has historically been seen as a hedge against inflation. As the value of paper currencies decreases, the value of gold tends to rise.
• Store of value: Gold is a tangible asset that can retain its value over time. Unlike paper currencies or other investments that can be subject to market fluctuations, gold can act as a store of value in times of economic uncertainty.
• Global currency: Gold is recognized and accepted as a form of currency all over the world. It can be easily traded and sold in most countries, providing liquidity to investors.
• Security: Physical gold bullion is a secure investment that is not dependent on third-party institutions like banks or governments. Gold is a tangible asset that can be securely stored and held.

How to Get Your Hands on Gold?

Here are a few common ways to buy gold bullion:

• Online dealers: Online dealers offer a wide selection of gold bullion products, and prices are usually competitive. Make sure to do your research and choose a reputable dealer with a good track record.
• Local coin shops: Local coin shops can be a convenient option, as you can inspect the gold bullion in person before making a purchase. However, prices may be higher than online dealers, and the selection may be more limited.
• Gold ETFs: Gold exchange-traded funds (ETFs) are another way to invest in gold bullion. These funds track the price of gold and can be bought and sold like stocks. However, you do not own physical gold with ETFs, and they may not provide the same level of security as owning physical gold.
• Gold coins and bars: You can purchase gold bullion in the form of coins or bars from a dealer or broker. Make sure to choose a reputable dealer and verify the authenticity of the gold bullion before making a purchase. Storage of physical gold may also be a consideration if you choose this option.

When purchasing gold bullion, it’s important to understand the market and the factors that can affect the price of gold, such as economic conditions, geopolitical events, and supply and demand. It’s also important to have a plan for storing and securing your gold bullion investment.