Gold coins are a classic investment option for people who want to maximize the value and collectability of their portfolio. The visual appeal of a pure gold coin can’t be matched by many other types of bullion products. Fractional gold coins are also an exceptional way to extend the amount of gold in your portfolio while maintaining high liquidity.
Like silver coins, gold bullion coins have an extensive history as a form of currency. Modern investors have begun to see gold coins as a form of commodity investment. But for thousands of years, different societies and countries have also used gold bullion coins as currency. The unique dual-classification of gold coins as both a currency and a commodity only adds to the historically-backed value of this unique form of investment.
Hero Bullion offers a versatile selection of gold coins from all around the world. Government-backed mints produce a number of annual and one-time releases with unique designs and high gold purities. Our ambition is to provide investors with a one-stop-shop for gold bullion products, including gold coins.
Investing in gold can be a tricky process. Figuring out which type of gold coin is right for your investment needs should naturally be a complex and personalized process. Complicating the equation for some investors is the unique collectable nature of gold coins. Developing an understanding of which coins are valuable long-term investments takes some investors years. This is what we’re here for!
Today we’re explaining some of the most important things to consider when you decide to purchase gold coins. How much gold is in the average gold coins? Are gold coins the best way to invest in gold bullion? Stick around to learn the answers to these questions and more.
History of Gold Coins
History is an important part of any major investment, but it is an especially essential consideration when it comes to gold and other forms of bullion. Gold’s value as a commodity is tied to its appearance and rarity, but also to its historical use as a viable store of value. Gold has been traded as a commodity for a century or more. But its history as a currency is even more extensive, dating back thousands of years.
In Antiquity, loosely formed golden coins were used during the Bronze Age since the 6th century or earlier. The Persians began to use gold coins as a primary currency in 546 BC. The Ancient Greeks are closely associated with the use of circulating gold coins as currency. City-states in Greece actually often closely regulated the mintage and circulation of gold coins in an early attempt to avoid the pitfalls of inflation.
This would actually turn out to be a foreshadowing event in the history of gold bullion. In the modern era, gold’s appeal as an investment comes primarily from its function as a counter to the threat of currency inflation and uncertainty. Ancient Greece understood that gold’s limited supply meant that it could curb inflationary effects far better than traditional fiat money could.
Ancient Chinese leaders minted a gold coin called the Ying Yuan as early as the 5th/6th century BC. It’s also quite likely that many early prototypes of the modern gold coin exist that we don’t even know about. New ancient currencies are being discovered by archeologists every decade; there’s little reason to suspect we won’t soon discover more great examples of Ancient societies relying on gold coins for exchange and commerce.
Gold coins as we know them initially came about with the unveiling of the German Gold Mark by the 19th century German Empire. Countries around the world began to use gold coins as their primary physical currency, a practice that didn’t fade until the early 20th century. At this point, most major world powers abandoned the gold standard. The gold standard is the idea that all paper currencies should be backed by a physical reserve of gold.
Both the United States and Great Britain have been major producers of gold coins. The British Royal Mint is among the oldest in the world; it was founded all the way back in 886 AD! While the United States abandoned the gold standard in the 1900s, the U.S. Mint has since readopted the production of yearly collectable gold coins. Similarly, mints in Great Britain, Canada, Australia, and other major nations continue to produce coins with extremely pure gold content each year.
Understanding the history of gold coins is important for any new investor. There’s a reason gold bullion has remained a valuable asset for thousands of years. When uncertainty strikes, gold is often a valuable way for consumers to hedge their bets and remain financially stable throughout any global event.
Benefits of Buying Gold Bullion Coins
Gold coins are unlike most other types of investment. The value of gold has fluctuated tremendously throughout the centuries, although the overall trend has been undeniably positive. Gold coins are valued for more than just their physical gold content, too. Some older gold coins with special errors or rare mint-marks have sold for millions of dollars at auction. Gold coins from prized collections also maintain a special value for collectors.
It isn’t hard to understand the basic downside to buying gold bullion coins. Gold coins are generally minted by government mints, and the artists who create their designs are some of the most esteemed in the world. This means that investors are asked to pay for the cost of labor associated with the coin, rather than just the cost of the gold that the coin contains. This results in a relatively large premium over the spot price of gold, especially compared to other bullion products, like gold bars or scrap.
Here are some of the main advantages of buying gold coins:
- Avoid currency inflation. This is a benefit shared by most bullion investments. As we explained in the above section, even the Ancient Greeks understood that precious metals can be used to avoid the effects of currency inflation. Considering how uncertain the modern economy can be, gold coins remain a primary way that the world’s smartest investors hedge against the threat of currency inflation. There’s a reason why gold sales often skyrocket during times of political and economic uncertainty.
- Collectability. Gold coins are a unique type of investment because both they maintain value for reasons other than their physical gold content. Gold coins from respected mints like the British Royal Mint and the United States Mint have often appreciated in value over time. Especially if collectors take good care of their coins, amassing a collection of a given series of gold coins is a surefire way to secure long-term profit. The collectable value of gold coins is one way that this asset offsets its own high premium.
- Fractional investment. Fractional gold coins are a fantastic way for investors with low capital to obtain collectable gold coins. Modern mints often offer fractional ounce versions of popular gold coins, including the American Gold Eagle, the Canadian Gold Maple, and more. These fractional gold pieces are especially popular as gifts, considering their low cost, brilliant designs, and collectability.
Like we explained above, the big downside of investing in gold coins comes from their excessive premium:
- High premium. Gold coins are usually sold at a high premium over spot price. While this does mean that gold coin investors get less gold for their money than they could obtain from buying gold bars, coins also have the added advantage of collectability. While the price of a gold bar will always be fixed to the spot-price of the precious metal it contains, gold coins have been known to appreciate over time.
Popular Gold Coins
Mints from countries around the world continue to provide the market with beautifully designed coins made of pure gold. The Canadian Royal Mint, the Royal British Mint, and the U.S. Mint are three of the biggest distributors of gold bullion coins in the world. Hero Bullion is excited to bring investors a wide selection from these famous mints, as well as other state mints all over the globe. Here’s a basic breakdown of some of the most popular gold coins available from Hero Bullion at the best prices possible.
- American Gold Eagle. It’s tough to match the iconic appeal of the American Gold Eagle. The official gold coin of the U.S., the American Gold Eagle has been released continuously since 1986 by the United State Mint. The gold eagle gets its name from the reverse design of the coin, which depicts a family of American eagles at their nest. The obverse of the coin is the feminine depiction of Liberty; she holds a torch in one hand and an olive branch in the other. The American Eagle is always backed by the U.S. government, and it is available in ½, ¼, 1/10, and full one ounce denominations.
- Canadian Gold Maple. Next to the American Gold Eagle and the Krugerrand, the Canadian Gold Maple Leaf Coin is among the most popular gold coins in the world. The signature symbol of the sugar maple leaf adorns the reverse of the coin, while a depiction of the regal Queen Elizabeth II decorates the obverse. The Royal Canadian Mint has produced the coin once yearly since 1979, making it even older than the American Gold Eagle. The Queen depicted on the coin’s obverse actually ages with the actual Queen, adding to the collectable historical value of the Canadian Gold Maple.
- Gold Britannia Coin. Another coin featuring the likeness of Queen Elizabeth II, the Gold Britannia Coin is a popular yearly release by the Royal British Mint. Since 1987, the Gold Britannia has been the most recognizable global product of this historic mint. Before 2013, the coins offered a gold purity of .917. Coins minted after 2013, however, contain .9999 pure gold. Britannia is the female personification of Great Britain and the British Empire; she carries both a trident and the shield of Britain. On the obverse, the Queen wears her pearl earrings and crown. These coins are also offered in fractional denominations, including ½, ¼, and 1/10 variants.
- Gold Krugerrand Coin. The obverse of the Krugerrand is where this extremely popular gold bullion coin gets its name. Paul Kruger was a South African politician who staunchly advocated for the independence of South African countries. The Krugerrands actually were outlawed by several countries in the West throughout the 80s and 90s. Since then, however, the 91.69 pure gold coin has ascended to become one of the most popular gold bullion pieces in the world. At one point, around 90% of gold coins traded globally were Gold Krugerrand Coins.
Gold Coins Vs. Gold Rounds
There is one important difference between gold coins and gold rounds. Some investors are wondering about the difference between these different gold products, and the uninitiated consumer may view them as the same. Gold coins are backed by an official sovereign government. The U.S. Mint and the Canadian Royal Mint, for example, are mints backed by their governments.
This is different from rounds, which can be distributed by any type of mint. Rounds resemble coins; both are round in shape and contain pure gold. But rounds are typically minted by private mints and distributed without the backing of an actual government. While rounds are sometimes available at a lower premium because of this, they also lack the kind of security that comes from government support. Rounds can also vary a bit more in purity than official government-minted gold coins.
Invest with Hero Bullion
Hero Bullion’s highly intentional packaging and shipping process is meant to ensure that all coins, bars, and other bullion products purchased from us arrive without any kind of damage. We offer a wide selection of different bullion products at the lowest prices possible. Consumers with any questions should contact us immediately; we’d be happy to help you through your first bullion purchase!