Gold bullion coins are a popular way to buy physical gold.
Minted from 22 karat and 24 karat gold, they come in a variety of weights.
A bullion coin is not legal tender. In other words there is no obligation for anyone to accept a bullion coin as payment.
The US government requires that coins that cannot be used as legal tender are advertised as “rounds”.
Why Invest in Gold Bullion Coins?
Gold minted coins provide an alternative to bullion bars and ingots as a way to invest in physical gold.
While they share similarities with bullion bars, there are also some differences.
We explain below.
Coins are easy to be carried, stored and moved around.
Coins are familiar to people, they understand a coin has a certain value.
There is an established market to buy and sell bullion coins.
The quality of the gold is guaranteed by the mint.
Some bullion coins are acceptable to be stored in a Gold IRA.
Valuable inheritance to be left for children and grandchildren.
Like bullion bars, there is no income to be had from holding physical gold.
Annual storage fees if held in a bank or bullion vault.
Coins typically cost more than bullion bars for same weight of gold.
Types of Gold Coin
The table shows you some of the current gold bullion coins minted by various countries.
|Bullion Coin||Country||Fineness||Gold Weight|
|Gold Eagle||USA||.9167||1/10 ozt, 1/4 ozt, 1/2 ozt, 1 ozt|
|American Buffalo||USA||.9999||1 ozt|
|Gold Nugget||Australia||.9999||1/20 ozt, 1/10 ozt, 1/4 ozt, 1/2 ozt, 1 ozt, 2 ozt, 10 ozt, 1 kg|
|Maple Leaf||Canada||.9999 (.99999 available)||1/20 ozt, 1/15 ozt, 1/10 ozt, 1/5 ozt, 1/4 ozt, 1/2 ozt, 1 ozt, 100 Kilo|
|Vienna Philharmonic||Austria||.9999||1/10 ozt, 1/4 ozt, 1/2 ozt, 1 ozt|
|Gold Panda||China||.999||1/20 ozt, 1/10 ozt, 1/4 ozt, 1/2 ozt, 1 ozt|
Note: Gold is measured in troy ounces, shown as “ozt” in the table above.
Visit Wikipedia for further information.
What is the Difference Between Bullion and Collectible Coins?
Put simply – one type of coin is for collecting and one type is for investing.
A collectible coin has value from a combination of history, rarity and intrinsic precious metal content. A rare low grade silver coin from Roman times can be worth thousands to the right collector.
An historic collectible coin does not need to have a high precious metal content. The value comes from the collectible nature of the coin.
Some coins from certain periods are worth more than others simply because more collectors demand that type of coin.
A bullion coin derives its value from the quality and quantity of the precious metal contained within.
A “.9999 fine gold coin” such as the 1 ounce American Buffalo is of the highest quality, guaranteed by the U.S. Mint.
The value is not from rarity or historical importance – it is from the gold it is manufactured from.
The Heaviest Gold Coin in the World
The heaviest gold coin was manufactured in 2014 by the Perth Mint in Australia.
The Kangaroo coin weighs a staggering 1 tonne or 1000 kilograms. The coin was a 25th anniversary celebration of the first 1 ounce Kangaroo coin to be minted in Australia.
The coin is nearly 80cm in diameter and 12 cm thick.
The 1 tonne kangaroo gold coin is the most valuable bullion coin in the world. Only one of these coins has ever been struck.
You would need a big pocket to carry this coin around.
Not all Mints are Created Equal
When you buy a gold bullion coin, make sure it is from an approved LBMA mint.
The LBMA (London Bullion Market Association) is the worldwide industry organisation that certifies mints for the production of high quality bullion coins.
Mints promoted on TV Shopping Channels do not make bullion coins to the same high standards of mints such as US Mint, the Perth Mint, The Royal Mint of Great Britain and the Royal Canadian Mint.
If by chance authentic mint bullion coins are being offered on TV, they are typically at prices much higher than you could obtain at your local coin dealer or from a reputable online bullion dealer.
Franklin Mint is one example. Any coins from the Franklin Mint will not be considered investment grade. They are made for collectors but are of dubious quality, low precious metal content and questionable collectibility.
We recommend an online gold bullion dealer who will be able to answer your questions about the best billion coins to buy.
The specialist world of bullion coins has a language all of its own.
We have general terms in our glossary section but we thought we’d list some of the more specific terms here.
Proof Coin – a coin struck for collectors using a high quality minting process. A proof coin is never meant for circulation and will cost more than face value. A coin meant for circulation will be minted with a “business strike” as opposed to a proof strike.
Uncirculated – this term has two main interpretations.
The first is of a coin that has been released to the public via a mint or coin dealers but is not in general circulation.
The second describes a very specific coin quality defined by the American Numismatic Association (ANA). An example would be the grade of “MS60 Uncirculated”. This grade is described as “Has no trace of wear but may show a number of contact marks, and surface may be spotted or lack some luster.” Visit the U.S. Mint learn more about the other uncirculated grades – AU50, AU55, MS65 and MS70.
Mint Mark – a symbol, letter or inscription on a coin to indicate where it was minted. For instance, the U.S. mint has used “D” for Denver, “P” for Philadelphia and “W” for West Point. These are small letters stamped on a coin that do not detract form the overall design and appearance of the coin.
Further information on U.S. mint marks can be found here.