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
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
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
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 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.
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.
Popular gold coins
American Eagle gold coins
91.67% fine gold or 22 karats and highly sought after by both investors and collectors, the beautiful
American Eagle coins feature Lady Liberty holding the Freedom Torch and an olive branch on one side and a
nest of American Eagles on the reverse. These coins are struck by the US Mint and are official legal tender
carrying the 100% guarantee of the United States Government. They are offered in 1/10, 1/4, 1/2 and 1 ounce
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
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
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
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.