Gold coin

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Gold coins for sale in the Dubai Gold Souk Dubai gold coins.jpg
Gold coins for sale in the Dubai Gold Souk

A gold coin is a coin that is made mostly or entirely of gold. Most gold coins minted since 1800 are 90–92% gold (22 karat), while most of today's gold bullion coins are pure gold, such as the Britannia, Canadian Maple Leaf, and American Buffalo. Alloyed gold coins, like the American Gold Eagle and South African Krugerrand, are typically 91.7% gold by weight, with the remainder being silver and copper.


Traditionally (up to about the 1930s), gold coins have been circulation coins, including coin-like bracteates and dinars. In recent decades, however, gold coins are mainly produced as bullion coins for investors and as commemorative coins for collectors. While modern gold coins are still legal tender, they are not observed in everyday financial transactions, as the metal value normally exceeds the nominal value. For example, the American Gold Eagle has a denomination of 10 USD, but a metal value of more than $800 USD (being around a half an ounce).

The gold reserves of central banks are dominated by gold bars, but gold coins may occasionally contribute.

Gold has been used as money for many reasons. It is fungible, with a low spread between the prices to buy and sell. Gold is also easily transportable, as it has a high value-to-weight ratio compared to other commodities such as silver. Gold can be re-coined, divided into smaller units, or melted into larger units such as gold bars, without destroying its metal value. The density of gold is higher than most other metals, making it difficult to pass counterfeits. Additionally, gold is extremely unreactive chemically: it does not tarnish or corrode over time.



Persian Achaemenid Daric, circa 490 BC Achaemenid coin daric 420BC front.jpg
Persian Achaemenid Daric, circa 490 BC
Gold Solidus of Roman Emperor Valentinian II Gold Solidus of Valentinian II - obverse YORYM 1998 853.jpg
Gold Solidus of Roman Emperor Valentinian II

Gold was used in commerce (beside other precious metals) in the Ancient Near East since the Bronze Age, but coins proper originated much later, during the 6th century BC, in Anatolia. The name of king Croesus of Lydia remains associated with the invention (although the Parian Chronicle mentions Pheidon of Argos as a contender). In 546 BC, Croesus was captured by the Persians, who adopted gold as the main metal for their coins. The most valuable of all Persian minted coinage still remains the gold drams[ clarification needed ], minted in 1 AD as a gift by the Persian King Vonones (Matthew 2.1–23). [1] [2] Ancient Greek coinage contained a number of gold coins issued by the various city states.

The Ying yuan is an early gold coin minted in ancient China. The oldest ones known are from about the 5th or 6th century BC.

Larger units such as the various talent measures (26 to up to 60 kg) were used for high value exchanges (similar to today's 400-troy-ounce (12.4 kg) "good delivery" gold bullion bar).

Middle Ages and Early Modern period

Modern history

The German gold mark was introduced in 1873 in the German Empire, replacing the various local Gulden coins of the Holy Roman Empire.

Gold coins then had a very long period as a primary form of money, only falling into disuse in the early 20th century. Most of the world stopped making gold coins as currency by 1933, as countries switched from the gold standard due to hoarding during the worldwide economic crisis of the Great Depression. In the United States, 1933's Executive Order 6102 forbade the hoarding of gold and was followed by a devaluation of the dollar relative to gold, although the United States did not completely uncouple the dollar from the value of gold until 1971. [3]

Gold-colored coins have made a comeback in many currencies. However, "gold coin" (in numismatic terminology) always refers to a coin that is (more or less) made of gold, and does not include coins made of manganese brass or other alloys. Furthermore, many countries continue to make legal tender gold coins, but these are primarily meant for collectors and investment purposes and are not meant for circulation.

Large gold coins

In 2007, the Royal Canadian Mint produced a 100 kilograms (220 lb) gold coin with a face value of $1,000,000, though the gold content was worth over $2 million at the time. It measures 50 centimetres (20 in) in diameter and is 3 centimetres (1.2 in) thick. It was intended as a one-off to promote a new line of Canadian Gold Maple Leaf coins, but after several interested buyers came forward the mint announced it would manufacture them as ordered and sell them for between $2.5 million and $3 million. As of May 3, 2007, there were five orders. [4] One of these coins was stolen when it was on exhibition at the Bode Museum in Berlin. [5]

Austria had previously produced a 37 centimetres (15 in) diameter 31 kg Philharmonic gold coin with a face value of €100,000.

In 2012 the Royal Canadian Mint produced the world first gold coin with a 0.11–0.14 ct diamond. The Queen’s Diamond Jubilee coin has been crafted in 99.999% pure gold with a face value of $300. [4]

The largest legal tender gold coin ever produced was unveiled in 2012 by the Perth Mint in Western Australia. Known as the "1 Tonne Gold Kangaroo Coin" and with a face value of one million dollars, it contains one tonne of 9999 pure gold, and is approximately 80 cm in diameter by 12 cm thick. [6]


A 20-crown gold coin from Norway. Introduced in 1875, it became part of the Scandinavian Monetary Union, which was based on a gold standard. Norwegian gold reserves included tonnes of this and other coins, backing Norway's paper money. The coin was designed for circulation: "124 Stk. 1 Kil. f. G." means that 124 pieces gave one kilogram of pure gold. 20-kroner-1874-Norge.jpg
A 20-crown gold coin from Norway. Introduced in 1875, it became part of the Scandinavian Monetary Union, which was based on a gold standard. Norwegian gold reserves included tonnes of this and other coins, backing Norway's paper money. The coin was designed for circulation: "124 Stk. 1 Kil. f. G." means that 124 pieces gave one kilogram of pure gold.

Many factors determine the value of a gold coin, such as its rarity, age, condition and the number originally minted. Most gold coins minted since the late 19th century are worth slightly more than spot price, but many are worth significantly more. Gold coins coveted by collectors include the Aureus, Solidus and Spur Ryal.

In July 2002, a very rare $20 1933 Double Eagle gold coin sold for a record $7,590,020 at Sotheby's, making it by far the most valuable coin ever sold up to that time (a 1794 Flowing Hair Dollar sold for over $10 million in January 2013). In early 1933, more than 445,000 Double Eagle coins were struck by the U.S. Mint, but most of these were surrendered and melted down following Executive Order 6102. Only a few coins survived.

On October 4, 2007, David Albanese (president of Albanese Rare Coins) stated that a $10, 1804-dated eagle coin (made for President Andrew Jackson as a diplomatic gift) was sold to an anonymous private collector for $5 million.

Bullion coins

Precious metals in bulk form are known as bullion, and are traded on commodity markets. While obsolete gold coins are primarily collected for their numismatic value, gold bullion coins today derive their value from the metal (gold) content, and, as such, are viewed by some investors as a "hedge" against inflation or a store of value.

Many nations mint bullion coins. According to British HM Revenue & Customs investment coins are generally coins that have been minted after 1800, have a purity of not less than 900 thousandths, or have been legal tender in its country of origin. [7] Although nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion.

The European Commission publishes annually a list of gold coins which must be treated as investment gold coins in all EU Member States. The list has legal force and supplements the law. In the United Kingdom, HM Revenue and Customs have added an additional list of gold coins alongside the European Commission list. These are gold coins that HM Revenue & Customs recognise as falling within the exemption for investment gold coins. This second list does not have legal force. [7]

South Africa introduced the Krugerrand in 1967 to cater to this market; this was the reason for its convenient and memorable gold content – exactly one troy ounce. It was the first modern, low-premium (i.e. priced only slightly above the bullion value of the gold) gold bullion coin. Bullion coins are also produced in fractions of an ounce – typically half ounce, quarter ounce, and one-tenth ounce.

Bullion coins sometimes carry a nominal face value as legal tender, which is minted on the coin. However, their real value is measured as dictated by their troy weight, the current market price of the precious metal contained, and the prevailing premium that market wishes to pay for those particular bullion coins. The face value is always significantly less than the bullion value of the coin.

Legal tender bullion coins are a separate entity to bullion gold. One enjoys legal tender status, the latter is merely a raw commodity. Gold has an international currency code of XAU under ISO 4217. ISO 4217 includes codes not only for currencies, but also for precious metals (gold, silver, palladium and platinum; by definition expressed per one troy ounce.

Gold bullion coins usually come in 1 oz, 1/2 oz, 1/4 oz, 1/10 and 1/20 oz. sizes. Most countries have one design that remains constant each year; others (such as the Chinese Panda coins) have variations each year, and in most cases each coin is dated. A 1/10 oz bullion coin is about the same size as a U.S. dime. A 1 oz. gold bullion coin is about the size of a U.S. half dollar.


Circulating gold coins were usually made of an alloy as other metals are mixed into the coin to make it more durable. Fineness is the actual gold content in a coin or bar and expressed as a "per mil", or thousandths. For example, a gold ingot or coin identified as being .999 fine will be 999/1000 pure gold, with the other 1/1000 being impurities.

Crown gold is the name given to .9167 (or 22-karat) fine gold used in sovereigns and American Gold Eagles. Meanwhile, the United States have historically struck gold coins with .900 fine gold. Most bullion coins are minted from .999 or finer gold.


Balance for checking the weight of gold coins GreavesGoldWeigher.JPG
Balance for checking the weight of gold coins

For most of history, coins were valued based on the precious metal they contain. Whether a coin was actually made by the party as claimed was of secondary importance compared to whether it contains the correct amount of metal – that is, correct weight and fineness (purity). Genuine appearance was simply a convenient shortcut to avoid time-consuming tests in everyday transactions.

Gold is denser than almost all other metals, hence hard to fake. A determination of weight and volume is in many cases sufficient to spot forgeries. A coin that is not gold or below the expected fineness will either have the right size but will have a lower than expected weight or it weighs right and will be somewhat larger. Most metals that are of similar or higher density than gold are similarly or more expensive, and were unknown in ancient times (notably the platinum group). During the 19th century platinum was cheaper than gold and was used for counterfeiting gold coins. These coins could be detected by acoustic properties. [8] Only two relatively inexpensive substances are of similar density to gold: depleted uranium and tungsten. [9] Depleted uranium is government-regulated, but tungsten is more commonly available and suited for counterfeiting. [9] Alloying gold with tungsten would not work for several reasons, but tungsten plated with a thin layer of gold is a common type of forgery.

Bullion coin counterfeits (of all types) used to be rare and fairly easy to detect when comparing their weights, colors and sizes to authentic pieces. This is because the cost of reproducing any given coin precisely can exceed the market value of the originals. [10] [11] [12] [13] However, since about 2015 counterfeit coins are "flooding the market at an astonishing rate" and "it's gotten to the point where even people who deal with coins all the time may not be able to recognize a counterfeit coin right away" (American Numismatic Association (ANA), 2016). [14] The coins consist mostly of tungsten plated thinly with gold, have the correct weight, correct or near-correct dimensions and are professionally produced in China. [14] [15]

The weight and dimensions of a coin of .999 fineness such as the Maple Leaf cannot be replicated precisely by a gold plated tungsten core, since tungsten has only 99.74% of the specific gravity of gold. However, forgeries of alloyed gold coins (such as American Gold Eagle or Krugerrand made from a crown gold alloy with 22 karats = .917 fineness) may have the correct weight and dimensions because of the lesser density of the alloy. Such forgeries can be detected testing the acoustic, electric resistance or magnetic properties. The latter method uses the fact that gold is weakly diamagnetic and tungsten is weakly paramagnetic. The effect is weak so that testing requires strong neodymium magnets and sensitive conditions (e.g., a gold coin hanging from 2 m long pendulum or placed on styrofoam floating on water), such tests can be performed without special equipment. [16] Forgeries using gold plated tungsten are also used in counterfeiting of gold bars.

Pirates Biting gold

The rationale for biting a coin was the supposed widespread dissemination of gold plated lead coins in the 19th century. [17] Since lead is much softer than gold, biting the coins is a sensible test for counterfeiting. [17] While fine gold is softer than alloyed gold, and galvanized lead is softer, biting coins can only detect the crudest of forgeries. [17] And all "gold" coins minted for circulation in the UK and America since the Tudor period (1485–1603) contained copper which made them more durable and thus hard to bite. [17]

Biting a coin to determine whether it is genuine or counterfeit is a widespread cliché depicted in many films (like the 1917 The Immigrant ), books (like the 1925 L'Or by Blaise Cendrars) and plays (like the 1938 Mother Courage which is set in the Thirty Years' War 1618–1648). [17] According to a 2017 study, the assumed widespread practice of pirates biting into a coin is almost certainly a Hollywood myth. [17]

"The origin of the tradition must therefore be older. In medieval times gold coins were made of the purest gold possible for both prestige and practical reason"

"This clich´e might find its origin in the crude testing method used by American prospectors during the 19th century gold rush. They bit the gold nuggets they found to be sure that they were not fool’s gold" [17]

Olympic champions often pose biting their gold medals,[ why? ] even though the medals are no longer made of solid gold. [17] [18] [ clarification needed ] Only at three Olympics (in 1904, 1908 and 1912) were medals made of solid gold, but were also smaller. [18] David Wallechinsky commented in 2012 that "It's become an obsession with the photographers. I think they look at it as an iconic shot, as something that you can probably sell. I don't think it's something the athletes would probably do on their own." [18]

Numismatic fake samples

There are well made counterfeit gold coins in circulation. For example, the St. Gaudens Double Eagle omega counterfeit is infamous for its complexity [19] and has fooled many numismatics experts.

Another example is the US $20 gold coin ("double eagle"), which has raised lettering around its rim. If the coin is uncirculated, the letters will be flat on top. If slightly rounded, and the coin is uncirculated, it is a counterfeit. There are other counterfeit double eagles in which the gold and copper alloy was not thoroughly mixed. These counterfeits will have a slightly mottled appearance. [20]

See also

Related Research Articles

Krugerrand South African coin

The Krugerrand is a South African coin, first minted on 3 July 1967 to help market South African gold and produced by Rand Refinery and the South African Mint. The name is a compound of Paul Kruger, the former President of the South African Republic, and rand, the South African unit of currency. On the reverse side of the Krugerrand is a pronking springbok, South Africa's national animal.

Precious metal Rare, naturally occurring metallic chemical element of high economic and cultural value

Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Chemically, the precious metals tend to be less reactive than most elements. They are usually ductile and have a high lustre. Historically, precious metals were important as currency but are now regarded mainly as investment and industrial raw materials. Gold, silver, platinum, and palladium each have an ISO 4217 currency code.

Bullion Gold, silver, or other precious metals in the form of bars or ingots

Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from the Anglo-Norman term for a melting-house where metal was refined, and earlier from French bouillon, "boiling". Although precious metal bullion is no longer used to make coins for general circulation, it continues to be held as an investment with a reputation for stability in periods of economic uncertainty. To assess the purity of gold bullion, the centuries-old technique of fire assay is still employed, together with modern spectroscopic instrumentation, to accurately determine its quality.

The fineness of a precious metal object represents the weight of fine metal therein, in proportion to the total weight which includes alloying base metals and any impurities. Alloy metals are added to increase hardness and durability of coins and jewelry, alter colors, decrease the cost per weight, or avoid the cost of high-purity refinement. For example, copper is added to the precious metal silver to make a more durable alloy for use in coins, housewares and jewelry. Coin silver, which was used for making silver coins in the past, contains 90% silver and 10% copper, by mass. Sterling silver contains 92.5% silver and 7.5% of other metals, usually copper, by mass.

American Gold Eagle Gold bullion coin of the United States

The American Gold Eagle is an official gold bullion coin of the United States. Authorized under the Gold Bullion Coin Act of 1985, it was first released by the United States Mint in 1986. Because the term "eagle" also is the official United States designation for pre-1933 ten dollars gold coins, the weight of the bullion coin is typically used when describing American Gold Eagles to avoid confusion. This is particularly true with the 1/4-oz American Gold Eagle, which has a marked face value of ten dollars.

The Canadian Gold Maple Leaf (GML) is a gold bullion coin that is issued annually by the Government of Canada. It is produced by the Royal Canadian Mint.

Gold as an investment Investment in gold

Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives. The gold market is subject to speculation and volatility as are other markets. Compared to other precious metals used for investment, gold has been the most effective safe haven across a number of countries.

Glossary of numismatics

This glossary of numismatics is a list of definitions of terms and concepts relevant to numismatics and coin collecting, as well as sub-fields and related disciplines, with concise explanations for the beginner or professional.

Noble (Manx coin)

The Manx Noble are platinum, gold or silver bullion coins distributed by the Isle of Man and minted by private companies. While platinum coins have been minted since the early 1800s, the Noble is the first platinum coin created for investors. The coins are not minted every year, but have an erratic schedule. Nobles are legal tender but they do not have a fixed face value; instead, like the Krugerrand or Mexico's Libertad, they are legal tender to the value of their precious metal content.

A gold bar, also called gold bullion or gold ingot, is a quantity of refined metallic gold of any shape that is made by a bar producer meeting standard conditions of manufacture, labeling, and record keeping. Larger gold bars that are produced by pouring the molten metal into molds are called ingots. Smaller bars may be manufactured by minting or stamping from appropriately rolled gold sheets. The standard gold bar held as gold reserves by central banks and traded among bullion dealers is the 400-troy-ounce Good Delivery gold bar. The kilobar, which is 1,000 grams in mass, and a 100 troy ounce gold bar are the bars that are more manageable and are used extensively for trading and investment. The premium on these bars when traded is very low over the spot value of the gold, making it ideal for small transfers between banks and traders. Most kilobars are flat, although some investors, particularly in Europe, prefer the brick shape.

Silver as an investment Precious metal as a store of value

Silver may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4,000 years, although it lost its role as legal tender in developed countries when the use of the silver standard came to a final end in 1935. Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. In 2009, the main demand for silver was for industrial applications (40%), jewellery, bullion coins, and exchange-traded products. In 2011, the global silver reserves amounted to 530,000 tonnes.

The Canadian Silver Maple Leaf is a silver bullion coin that is issued annually by the Government of Canada since 1988. It is produced by the Royal Canadian Mint.

Crown gold is a 22 karat (kt) gold alloy used in the crown coin introduced in England in 1526. In this alloy, the proportion of gold is 22 parts out of 24 —and is appreciably less prone to wear than the softer 23 kt gold of earlier gold sovereigns—an important point for coins intended for everyday use in circulation.

The Malaysian Kijang Emas is the official gold bullion coin of Malaysia and is minted by the Royal Mint of Malaysia. It was first issued on 17 July 2001. Malaysia is the 12th country in the world to issue its own gold bullion coin.

United States dollar Official currency of the United States

The United States dollar is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it into 100 cents, and authorized the minting of coins denominated in dollars and cents. U.S. banknotes are issued in the form of Federal Reserve Notes, popularly called greenbacks due to their predominantly green color.

Vienna Philharmonic (coin)

The Vienna Philharmonic, often shortened to Philharmonic, is a bullion coin of gold, silver, or platinum produced by the Austrian Mint. The coin is named for the Vienna Philharmonic orchestra, which inspired the design of both sides. It was introduced in 1989 as a one-troy ounce (ozt), gold coin with a face value of 2,000 Austrian schillings. It is generally one of the world's best selling bullion coins. In 2002, with the adoption of the euro currency, the nominal value of the one-ounce coin was changed to 100 euros. In 2008, the Mint introduced a one-ounce silver version of the coin with a nominal value of 1.50 euros. The silver coin is also one of the top selling bullion coins, ranked third in 2013. In 2016, the mint introduced a one ounce platinum coin with a face value of 100 euros.

Noahs Ark silver coins

The Noah's Ark silver coins are Armenian bullion coins issued since 2011. They are available in various sizes with a fine weight between 14 ounce and 5 kg in silver of 999/1000 fineness. The 1 oz. coin has a nominal value of 500 Drams and is a legal tender in Armenia. The coin is produced by the Leipziger Edelmetallverarbeitungs GmbH, an affiliated company of Geiger Edelmetalle. The motif of the coin remains constant, similar to other bullion coins such as the Canadian Silver Maple Leaf, the Vienna Philharmonic, or the American Silver Eagle.

PAMP SA is an independently operated precious metals refining and fabricating company and member of the MKS Group. It was established in 1977 in Ticino, Switzerland

Angel (Manx coin) Coin

Manx Angels are gold or silver bullion coins distributed by the Isle of Man and minted by private companies. The Isle of Man is not part of the United Kingdom. It is a Crown dependency and thus can mint its own coins. The coin depicts Archangel Michael slaying a dragon. The silver coins have not been minted every year, but has an erratic schedule. Angels are legal tender but they do not have a fixed face value; instead, like the Krugerrand or Mexico's Libertad, they are legal tender to the value of their precious metal content.


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Further reading