Gold Coins

The gold bullion investment of choice for collectability and liquidity.

While the investor who is focused on the spot price of gold will do best with the gold bar because of its relatively low premium over intrinsic gold value, the investor who wishes to speculate on factors other than the spot price while holding the physical metal may look to gold coins to meet their goals.

Gold coins allow the introduction of numismatics as an additional factor into the valuation of gold bullion while still being an extremely handy way to invest in physical gold. Unlike most gold bars that will likely never sell for more than their small premium over the spot price of gold, most gold coins will increase in value and command increasing premiums over spot gold as they age, depending on market factors. For instance, an old British Sovereign will command a much higher price than a modern Gold American Eagle or Krugerrand coin with exactly the same gold content, regardless of beauty or workmanship, simply because it is much older. If the older coin happens to be in especially high demand by coin collectors for some reason, the premium will be higher still.

This is not to say that gold coins are automatically more "expensive" than larger gold bars because this is not the case. If for example, you need to sell a little of your gold holding, it may be more expensive if that holding consisted of gold in the shape of bars rather than handy, easily marketable coins. Bars can be difficult to handle and can therefore eat up a lot more money while changing hands, so while they may be good for storing, they are not very good for selling. Regardless, both bars and coins make a very prudent addition to any gold portfolio that includes gold mutual funds, gold ETFs and bullion gold.

Types of gold coins

There are generally two types of coins in production today--proof and uncirculated--and these may come from a variety of sources and countries. In addition, there are older coins that were minted for circulation purposes but are now collectibles, gold coins having ceased to be used as "money" since 1933 for all practical purposes. Some examples of the latter are the popular and beautiful Saint Gaudens Double Eagle $20 gold coins that were minted between 1907 and 1933 and the Liberty and Indian gold coins.

Proof coins

Proof coins are pre-production coins that are struck in very limited numbers by mints and were traditionally made for the checking and approval of the coins by expert authorities such as the mintmaster and the king or queen. Eventually, these became popular with coin collectors and mints began to make them in larger numbers for sale to these numismatists. Proof coins are typically struck with much greater care and attention to detail and finish than non-proof bullion coins, each being struck lightly multiple times to produce high detail and mirror finishes, and many mints today produce them regularly for collectors. One excellent example is the American Eagle gold proof coin from the US Mint.

Uncirculated coins

Just as the term implies, these coins are made ostensibly to be circulated but are taken aside in limited numbers and packaged in rolls to be collected and traded as uncirulated coins in order to avoid the nicks and dents that normal handling will bring. Also sometimes termed Brilliant Uncirculated to refer to their untouched looks, these coins are used as bullion for investment and liquidity rather than collection purposes. They are very easy to acquire a little at a time, relatively cheap to store and they are very liquid, being highly marketable at any given time. Again, an excellent example is the American Eagle uncirculated gold coin.

American Eagle gold coins

American Buffalo gold coins

Unlike the hard-wearing American Eagles with 22 karats, the American Buffalo is the first 24-karat, 99.99% pure gold coin ever issued by the US Mint. These coins have an attractive design with an American buffalo on one side and an Indian Chief on the other, following closely the design of the Indian head Buffalo Nickel of the early 1900s. These proof-quality coins are struck in limited numbers and are extremely popular.

Canadian Maple Leaf gold coins

These is the official gold coin and legal tender of Canada with a fineness of .9999 or 24 karats. Struck by ther Royal Canadian Mint, it contains gold only from Canadian mines. The attractive design of this extremely popular coin carries a single maple leaf on one side with a bust of Queen Elizabeth ll on the other. It is issued in 1/20, 1/10, 1/4, 1/2 and 1 ounce denominations and mintage is kept low to enhance the collectibility and value of the coin.

Krugerrand gold coins

First introduced by South Africa in 1967, the Krugerrand containing 1 ounce of gold was designed to be circulated as currency and therefore was made of a harder-wearing gold alloy than most other gold bullion coins. The gold-copper alloy is called Crown Gold which is also used in the British Sovereign. It was the first gold coin that became popular for collectors and investors and today makes up the majority of gold coins in collectors' hands worldwide, prompting the minting of gold coins in countries like Australia, The United States, China and Canada.

Chinese Panda gold coins

These popular gold coins were first released in 1982 featuring a fresh new design every year, albeit all based on pandas. The coin, offered in 1/20, 1/10, 1/4, 1/2 and 1 ounce denominations, is legal tender and struck by the Peoples' Bank of China.

Older gold coins

give us the possiblity of profiting by both a rise in gold price and the age of the coins. These coins already carry a premium over their actual gold content. A couple of examples are:

British Sovereigns gold coins

These gold coins are historically significant in that they have portrayed British sovereigns--hence the name--for over 500 years. One of the most popular and widely circulated is the one honoring King George V as this coin was used by the allied forces during World War 2 all over the world. They were minted between 1902 and 1932.

French 20 Franc Gold Roosters

One of the most popular gold coins in the world because of its attractive and classic design and affordable value, the French Rooster, or Coq d'Or, was minted between 1901 and 1914 when France entered World War One. One side portrays a fully plumed rooster with the French slogan "Liberte, Egalite, Fraternite" and the other portrays the Lady Third Republic surrounded by the words "Republique Francaise".

If your objectives in purchasing gold bullion include collectability and a high degree of liquidy, then gold coins may fulfill that need the best.