What is a Gold Note? | History, Modern Gold Notes, and More!
At a Glance:
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- A gold note is an investment that resembles a bank note and contains real gold bullion.
- Modern gold notes called Goldbacks are a popular collectible investment product.
- Gold notes are seldom used as legal currency, but the U.S. government once produced gold notes.
- Contrary to popular belief, U.S. gold notes were redeemable for gold but didn’t actually contain any.
What is a Gold Note? | Buying 24k Gold Notes in 2024
The term “gold note” seems self-explanatory, but it’s actually a bit more complicated than you may think. When most gold investors talk about gold notes, they’re referring to Goldbacks. Goldbacks are a form of alternative currency that resemble golden bank notes and contain real gold. These gold notes aren’t really legal tender, but they can be used for trade in barter at hundreds of business establishments across the United States.
But before the invention of Goldbacks, governments like the United States did produce currency items known as gold notes. Gold notes produced by the U.S. government typically contained no actual gold, but they were redeemable for gold during the gold standard era of American economics. While these gold notes were a short-lived institution, they do provide a bit of insight into what life was like for Americans during a period of time where gold, rather than fiat currency, was the primary means of exchange in this country.
On this page, learn more about the history of gold notes, as well as the modern collectible we call “Goldbacks.”
Gold Notes and Certificates in the United States
What were gold certificates? Technically, the term ‘gold notes’ refers to the gold certificates produced by the United States government in the 19th and early 20th centuries. From 1865 until 1933, the United States operated under the gold standard, a monetary system where our currency was backed up by physical gold.
Gold notes in the 19th and early 20th centuries were representative currencies that could be traded for a set amount of real gold. By using gold notes, businessmen were about to trade items for large quantities of gold without lugging around several pounds of coins or bars. When they were ready to redeem these gold notes for actual gold, all they needed to do was go to a bank!
The U.S. government stopped producing gold certificates in 1933, the year that FDR took the American economy off of the gold standard. Since our currency was no longer officially linked to gold holdings, banks would no longer be obligated to exchange certificates for physical gold. Today, gold certificates are only valuable to collectors.
Interestingly enough, U.S. gold certificates contained no actual gold. The currency was called a gold note because it represented a given amount of gold bullion. How much is a gold certificate worth? Today, gold certificates are worth quite a bit more than their face value. These items have numismatic value, since they’re old, rare, and collectible. Some collectors will pay tens of thousands of dollars for rare gold certificates, even though these 19th and 20th century gold notes aren’t really made of gold at all!
Goldbacks: The Modern Gold Notes
The U.S. government stopped producing gold certificates when the gold standard was dissolved in 1933, but one company has introduced a new meaning to the term ‘gold notes.’ When people refer to gold notes, they’re usually talking about Goldbacks.
Goldbacks slightly resemble the gold notes minted by the U.S. government in the 18th and 19th centuries, but these modern gold notes are quite a bit different. To start, Goldbacks are privately minted by Goldback, Inc., rather than by the United States Mint. Goldbacks also are not an official currency, although they can sometimes be used to purchase goods and services at participating retailers.
Below, we’re answering some of the most commonly asked questions investors have about Goldbacks, the modern gold notes.
What Are Goldbacks?
What is a Goldback? A Goldback is a privately minted gold note that contains actual gold bullion. Each single Goldback contains 1/1000 troy ounces of 24 karat gold. This means that a 5 Goldback note is made with 1/200 troy oz of gold, a 10 Goldback is 1/100 oz gold, and so on. Each Goldback features a unique design based on the Cardinal Virtues represented by a feminine personification.
This series of localized, informal currencies began in 2019 with the Utah series. In 2024, Goldback, Inc. now offers a total of eight Goldback series representing different U.S. states:
The Goldback is a privately issued currency, and (so far) has not been officially adopted by any local, state, or federal government. Despite this fact, Goldbacks can be used informally to purchase goods and services at hundreds of retailers, with a particularly high concentration of participating businesses in the American Southwest.
How Much Gold is in a Goldback?
Goldbacks are fungible, which makes it easy to know just how much gold each Goldback contains. Five Goldback denominations are currently in circulation: 1, 5, 10, 25, and 50. Because we know that a single Goldback contains a thousandth of an ounce of actual gold, you just need to multiply the denomination of a given note to find out how much gold it was minted with.
How much gold is in a Goldback? Goldbacks contain the following quantities of gold, depending on each note’s denomination:
| Denomination | Gold Content |
|---|---|
| 1 Goldback | 1/1000 troy oz |
| 5 Goldback | 1/200 troy oz |
| 10 Goldback | 1/100 troy oz |
| 25 Goldback | 1/50 troy oz |
| 50 Goldback | 1/20 troy oz |
Since the initial Utah release, new denominations of Goldbacks have been announced. In addition to all of the denominations above, the Arizona Goldback series also includes the following denominations:
- 100 Goldback (1/10 oz Gold)
- 2 Goldback (1/500 oz Gold)
- 1/2 Goldback (1/2000 oz Gold)
Where to Buy (And Spend) Goldbacks
Where can you buy Goldbacks? Goldbacks can be purchased from most online gold retailers. Hero Bullion is a precious metals dealer with a full inventory of Goldbacks for sale from each of the currency’s five states. Other precious metal dealers also sell Goldbacks, but expect prices to vary from seller to seller.
Even though Goldbacks are not legal tender, you can spend Goldbacks at a wide variety of different retailers. Where can you spend Goldbacks? You can spend Goldbacks at any of the featured businesses listed on the Goldback website. These businesses now accept Goldbacks as payment, and some even use a new counting machine to process and track purchases made using the Goldback gold notes! You can also use Goldbacks informally as a means of exchange in your community. Some committed gold stackers like to leave Goldbacks as tips or give them out as gifts to encourage their wider adoption!
Of course, some people don’t spend their Goldbacks at all. Why buy Goldbacks? Goldbacks are beautiful, collectible notes that contain actual gold. For some investors, these notes have numismatic or collectible value. Premiums per ounce of gold are usually higher for Goldbacks than other gold investments, but the currency’s intricate designs and novelty makes Goldbacks a uniquely fun way to buy more gold bullion.
Goldbacks Are Spendable – But Not Legal Tender
You can use Goldbacks at certain businesses across the United States, but it is important to remember that the currency is not yet legal tender. Legal tender refers to currency coins or notes that have been officially adopted by a government – typically the federal government. The United States Dollar (USD) is the official national currency. Coins may look different than bank notes, but they still represent fractions of the same federally adopted currency.
Because Goldbacks are privately minted and have not been adopted by the federal government – or any state/local government – Goldbacks are not yet considered legal tender in any state. Still, some gold investors want to change this. The founders of Goldback, Inc. encourage investors to use Goldbacks whenever possible and encourage their friends to start adopting the gold-backed currency.
To summarize, don’t expect your bank to convert your Goldbacks into United States Dollars. While some politicians have advocated for the national adoption of a gold-backed currency, Goldbacks remain a fun, exciting alternative currency rather than legal tender.
Final Thoughts: Goldbacks, the Modern Gold Notes
Goldbacks are the modern gold notes, but they don’t have much in common with the original gold certificates circulated by the U.S. government in the 19th and early 20th centuries. Today, gold notes known as Goldbacks contain real gold bullion but are not legal tender. Despite not being legal tender, Goldbacks have quickly become one of the most popular gold products.
Whether you’re committed to promoting a return to the U.S. gold standard or just a fan of unique, beautiful golden notes, Goldbacks are a fun and exciting way to keep building your collection of precious metals!
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About The Author
Michael Roets
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.