Are Goldbacks a Good Investment?

Posted - November 10, 2023
are goldbacks a good investment

When most people think of investing in gold, it’s gold coins and bars that jump to mind. Quality bullion products like gold coins and bars are always a popular way to invest in the world’s most coveted precious metal. But there are other options out there. One alternative way to put your money on gold is the Goldback

Are Goldbacks a good investment? These unique gold products combine the concept of usable, tradeable currency with actual gold bullion to give investors an unprecedented opportunity. In today’s brief Hero Bullion guide, we’re going to be taking a closer look at Goldbacks and their investment potential.  

What Are Goldbacks? 

Let’s go through the basics. We’ve written about Goldbacks before, so please feel free to check out our other guides if you’re still confused. The quickest way to explain Goldbacks is to say that they’re part of a family of voluntary, alternative currencies used in some U.S. states to facilitate trade. “Are Goldbacks a good investment” is a common question we get, so let’s take a look at what Goldbacks are. 

Voluntary currencies, or currencies that aren’t considered legal tender but may be accepted freely by some businesses, are nothing new. Dozens of voluntary currencies are used in the United States – as well as around the world. 

But Goldbacks take a unique approach to the concept of a voluntary currency. As the name suggests, each Goldback contains actual gold bullion. This means that they hold intrinsic value, and their investment potential is closely related to the price of gold bullion. But are Goldbacks a good investment? To answer this question, we’ll need to learn a bit more about where Goldbacks are primarily traded. 

Where Are Goldbacks Used? 

Goldbacks are used all over the United States. As of right now, Goldback, Inc. has released a series of Goldbacks for five states: Utah, Wyoming, New Hampshire, Nevada, and now South Dakota. 

It’s worth noting that Goldbacks are not legal tender. This means that they aren’t backed by the United States government – or any government, for that matter. Some Goldback investors mistakenly believe that Goldbacks are legal tender in states like Utah. This misconception has its roots in one of the Utah laws that inspired the Goldback, the Utah Legal Tender Act. 

The Utah Legal Tender Act did pave the way for Goldbacks by making it legal for the state of Utah to adopt gold-based currencies as legal tender. However, the law didn’t actually make Goldbacks legal tender anywhere. 

1 South Dakota Goldback Aurum Gold Note Dimensions
1 South Dakota Goldback

This matters very little, at least to the dedicated following of investors that the Goldback project has demonstrated. Are Goldbacks a good investment? According to supporters of the voluntary currencies, Goldbacks might appreciate considerably in value as the stability of traditional currencies continues to decline. 

Goldback Premiums Explained

Are Goldbacks a good investment, despite high premiums? For gold stackers, premiums are the enemy. When you pay a premium, you’re using actual, spendable money without actually getting any actual gold. 

Where premiums are concerned, Goldbacks aren’t the best investment in the world. A single Goldback contains 1/1000 oz of pure gold and is currently selling for around $4 on the open market. This means you’re paying a premium of nearly 100% or more each time you purchase a single goldback. 

But despite the high premiums, some people consider Goldbacks a premier investment opportunity. Are Goldbacks a good investment in 2023? We’ll talk a bit more about their cost -n and investment potential – below. 

Are Goldbacks Cheap? 

Are Goldbacks a good investment, or are they too expensive? Goldbacks can be a great way to invest not only in gold, but also in the very concept of a gold-backed currency. Some of the biggest fans of Goldbacks don’t even treat them as investments at all. 

Because Goldbacks are actually traded in some states for goods and services, buying a Goldback actually means buying a new way to pay for items. Savvy collectors might also save money by paying for the things they need using Goldbacks. 

50 South Dakota Goldback Aurum Gold Note
50 South Dakota Goldback

Are Goldbacks a good investment if you plan to use them for trade? Absolutely! Because Goldback values are standardized using a “going market rate” on the Goldbacks, Inc. website, you can save money while buying groceries, tech, or other useful products if you’re able to buy Goldbacks in bulk for cheaper than their trade value. 

Goldbacks Vs. Gold Coins and Bars

Compared to gold coins and bars, Goldbacks aren’t the best investment in the world for gold stackers. High premiums mean that you’ll get less gold for your money buying Goldbacks than you would for comparable products like gold coins or gold bars. 

Still, investment is about more than just profit for some collectors. Some people believe Goldbacks might appreciate in numismatic value in the future. Others just support the idea of a gold-supported currency and want to invest in that concept using Goldbacks. 

Are Goldbacks a good investment for you? At the end of the day, you’re the only person who can answer that question. Think carefully about your investment objectives, horizon, and preferences. If you like beautiful gold notes with real trade applications, Goldbacks are a fantastic option to consider. 

How to Buy Goldbacks

There are several ways to buy Goldbacks. If you’re a business owner, you can sign up to accept Goldbacks for your goods and/or services. 

For most investors, the easiest way to buy Goldbacks is through licensed distributors like Hero Bullion. We offer a wide selection of Goldbacks from all five currently available series, and our competitive prices and secure shipping procedures have made us a primary distributor of this unique form of gold investment. Are Goldbacks a good investment? If you’re able to buy Goldbacks at a low price, they might offer considerable savings the next time you go to buy goods or services from a participating business. 

Final Thoughts: Are Goldbacks a Good Investment? 

So are Goldbacks a good investment for you? While Goldbacks offer high premiums that might spell trouble for some gold stackers, the unique alternative currency is a preferred investment option for investors all over the country. 

In addition to being an affordable way to invest in actual gold bullion, Goldbacks represent another possibility for the future of currency. And if nothing else, the designs on each Goldback note are absolutely beautiful – and they might just deserve a spot in your collection. 

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About The Author

Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.