Gold coins in the current financial climate are in high demand and
for good reason. Gold coins have always been a popular way to hedge
against inflation and for a balanced portfolio risk. Though coins made
with gold have been produced ever since a coinage system began, the
modern day gold coins are minted for collectors or to be used as bullion
coins. A bullion coin is bought for its investment potential rather
than its face value.
Why Gold?
Gold
can be moved around the country quite easily, and with such high value
compared to its weight makes it more convenient that other commodities.
Gold itself can be reduced in size without losing its overall value and
is more difficult to counterfeit and above all, with the worlds stock of
gold being limited, the value of gold is fairly stable on the
commodities exchanges. In 1933 the United States banned the private
ownership of gold coins over $100, anything above this amount that they
owned had to be handed over to the Federal Reserve, in which they paid
$20.67 per troy ounce. This ban remained in force until 1974 when a bill
in the US parliament allowed once again private ownership of gold coins
in excess of $100. The reason behind all this was down to the Worlds
monetary system and the Gold standard.
Collector Coin
The
respective mints for each country produce yearly a chart with how many
coins are minted for each denomination, and with these figures at hand
one can see the rarity of the various coins, just one statistic to
determine the value of a gold coin, the condition is another important
factor to take into account. Hence why in 2002 the auction house,
Sotherby's sold a 1933 $20 double eagle for £7.5 million, at the time
the US treasury had begun producing the $20 Double Eagle gold coin, but
then the ban of private ownership came into force so they had to melt
them and the ones handed in all down, though some did manage to get into
the public domain, so as a collector coin it is the ones dated prior to
1933 that are more of collectors item, though they still have some
investment attributes.
Bullion coins
Modern
day gold coins are bought for investment purposes rather than their
numismatic interest, and are bought and sold depending on the current
market value gold, this makes a choice of investors as a way to have
some gold in their portfolio as a hedge against the world economic ups
and downs. South Africa began the modern trend when in 1967 it
introduced the Kruggerrand, which fortunately contained one troy ounce
of gold, these were conveniently priced just above the bullion prices of
gold, though gold coins have a face value associated with the coin
which is far less than its true value this is done to give the coin some
status in law and they are technically legal tender, but as coinage can
be easily moved across the national borders. The gold bullion gold
coins value is determined by its troy weight and the current price of
gold on the commodities market.
Produces of Gold Bullion
Gold
bullion coins are now minted by various countries and are sold by the
troy ounce or a multiple of a troy ounce, like 1/20 oz., 1/10 oz., 1/4
oz., 1/2 oz., 1 oz. Some of the countries producing the gold coins are
Australia, Austria, Canada, Mexico, Poland South Africa, United Kingdom
and the United States. It has been reported that the United Nations will
be issuing gold bullion coins at some date in the future.