Gold is as fundamental to our modern culture as it was to civilizations 2,000 years ago. As nations worldwide continue to produce gold bullion coins, many investors seek to buy as many as possible. Though these items are sometimes worth thousands of dollars, are gold coins pure gold?
History of the Gold Coin
Gold is a precious metal that professionals extract through the labor-intensive process of vein mining. For thousands of years, numerous cultures competed to access this commodity for their jewelry, architecture, and currency.
Gold coins made their first appearance around 550 BC in what is now modern-day Turkey. Archaeologists have determined that the gold purity of ancient coins to be as high as 95 percent in some cultures.
However, with gold becoming more accessible to industrialized societies, do modern gold bullions have similar purity levels?
The answer to this question is, yes—with some exceptions. The most valuable modern gold coins in circulation have a purity of 90–99 percent.
How Are Gold Bullion Coins Made?
While you can correctly assume a gold coin consists primarily of gold, other metals (alloys) also produce gold bullion coins.
Authorized facilities produce gold coins during the minting process. This task requires several ingredients, such as precious metals, a stamping press, and a furnace that can deliver 1,943 degrees Fahrenheit of heat.
A smelter will extract gold in its purest form from a section of ore, and they may mold this element into gold bars and sell them to minting facilities. Coin producers will then melt the gold and other alloys into a coin and stamp it with identifying markers.
Minting facilities generally stamp gold bullion coins with important national or cultural symbols. In the United States, you may see gold coins with the figures of eagles or Lady Liberty enshrined on their surfaces. In addition, commemorative gold coins display other niche symbols that separate them from their standard counterparts.
Gold Coin Alloys
Minting specialists may choose to add popular alloys such as copper and silver to reinforce a gold coin. For example, 22-karat gold coins use alloying gold to reduce flexibility and offset slightly lower purity levels.
As you can expect, gold coins with high percentages of alloy will be heavier than those without them.
How to Measure the Purity of a Gold Coin
Appraisers measure the purity of gold by “karats.” Understanding that “purity” does not necessarily mean “quality.” Gold purity is simply a measurement of how much fine gold is present in the final product.
Twenty-four-karat gold offers the highest purity, contains 99.9 percent fine gold, and is highly malleable. Alternatively, 22-karat gold is around 92 percent pure, while alloys make up the remaining 8 percent.
How Much Are Gold Coins Worth?
The market price of a pure gold coin varies and may be difficult to determine at face value. Some factors include the coin’s age, weight, and condition. Still, most appraisers currently place the value of an ounce of gold at around $1,600.
Using an American Gold Eagle coin (one of the purest gold coins available) as an example, investors can expect to pay between $18,000 and $21,000 for this item. Gold and silver prices fluctuate over time, but these commodities tend to retain value despite economic downturns. After the COVID-19 pandemic of 2020, global markets struggled to survive.
Nevertheless, gold prices rose by nearly 24 percent. For these reasons, many people try to buy gold bullion coins to develop and reinforce their investment portfolio.
Which Gold Coins Are Pure?
Gold bullions come in different shapes, sizes, and purities. Before buying these coins, it’s prudent to know which items have the highest gold content.
Canadian Gold Maple Leaf
This coin contains 99.99 percent fine gold, which makes it the purest gold coin in circulation. Investment community members respect this product and pay top dollar every year to obtain it.
The Canadian Maple Leaf has a face value of $5.
American Gold Buffalo
The American Buffalo gold bullion coin contains 99.9 percent gold content. The United States Mint attempted to outcompete the Canadian Maple Leaf and other coins with this 24-karat, one-troy-ounce bullion. Though this coin’s value continues to rise yearly, it is not as popular among investors as the Maple Leaf or American Eagle.
The American Gold Buffalo has a face value of $50.
Australian Gold Nugget
In 1986, the Perth Mint began producing Australian Gold Nuggets. These bullion coins also contain 99.9 percent gold, making them comparable to their American and Canadian gold coin counterparts.
Those buying gold should expect to spend quite a bit on this item. The face value of this quarter-troy-ounce gold coin is around $1 million.
Austrian Philharmonic
The Austrian Mint began printing these beautiful 24-karat bullions in 1989. Each coin weighs in at half an ounce of gold. Investors started to gravitate toward this item after Austria adopted the euro just over a decade later.
The Austrian Philharmonic sits at face value of just over $100.
The British Gold Sovereign
British Gold Sovereigns closely reflect the iconography of ancient coinage standards. These 91.67 percent gold coins bear the visage of Queen Elizabeth II on one side and St. George on the other.
Production of these coins materialized at both the Royal and Australian mints. The face value of Gold Sovereigns sits at just over $1.
American Gold Eagle
American Gold Eagles contain 91.67 percent of the purest gold on the market. In addition, they include 5 percent copper and 3 percent silver. Unlike the American Buffalo, this bullion is popular and widely available. Manufacturers produced over 665,000 gold bullion coins throughout 2021.
The American Gold Eagle has a face value of $50.
South African Krugerrand
This gold bullion coin contains 90 percent gold, while copper alloy makes up the remainder. Despite having the lowest gold content on this list, investors worldwide seek this item for their portfolios.
Though it does not have an official face value, it remains legal tender in South Africa.
How to Buy Pure Gold Coins
Buying gold coins can be challenging if you aren’t sure where to start. Expect to spend time researching current market trends and exploring different offers from distributors.
Ask Yourself Why You Want Gold Coins
Ask yourself some essential questions before committing to a purchase, such as:
- Am I buying gold coins as an investment?
- Am I seeking to complete a physical coin collection?
- Do I have the storage space to secure these items?
- Can I afford these items?
The answers to these questions will impact how you shop. For example, you may need to arrange extra storage space if you cannot keep these valuable items at home.
Buying Gold Coins
Once you find the right distributor, explore their options. As this article proves, not all coins are the same. Ask a professional about each coin’s purity, weight, age, and spot price.
If you are ordering products to your door, ensure you have all the correct tracking information. A professional can guide you through the delivery process, so you know what to expect.
Furthermore, consider that a single gold coin can offer significant financial opportunities. Partner with an experienced advisor to learn how to invest effectively in these products in other channels.
The Oxford Gold Group helps investors protect and grow their wealth by purchasing physical gold and silver for their IRAs and for home delivery as effortlessly and securely as buying bonds or stocks. That’s why investors have turned to the security of gold and silver and the Oxford Gold Group. Call 833-600-GOLD or visit OxfordGoldGroup.com to receive a complimentary copy of “Your Precious Metals Investment Guide.”
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