The three most popular gold coins sold today are: 1) The American Eagle 2) The Canadian Maple Leaf 3) The South African Krugerrand These gold bullion coins are preferred because each are minted AND guaranteed by their respective national mint and each carry 1 troy ounce of gold. We can call this “safe gold,” because the coins [...]
The three most popular gold coins sold today are:
1) The American Eagle
2) The Canadian Maple Leaf
3) The South African Krugerrand
These gold bullion coins are preferred because each are minted AND guaranteed by their respective national mint and each carry 1 troy ounce of gold. We can call this “safe gold,” because the coins have been minted recently and are just worth the value of the gold they are made of: one ounce. Youknow what they are worth every day and know you can sell them for that amount anytime you find convenient. They are what we call liquid. You don’t need an “expert” with an eyepiece to bully you and rip you off with a low offer which could possibly happen if you attempted to liquidate a “rare” coin. Gold “bullion” coins have no numismatic value. Their value is their gold content only. Coin collectors are interested in hard to value “rare” coins. We are only interested in investing in real gold and do not want to buy rare coins.
The Most Popular Gold Coin Ever
American Eagle Gold Bullion Coins are issued in accordance with Public Law 99-185, enacted December 17, 1985. Sales began October 20, 1986. These coins are 22 karat gold (.9167 fine gold, or 91.67% pure as required by law, with 5.33% copper and 3% silver added as alloy) and are marketed in 1 ounce, ½ ounce, ¼ ounce and 1/10 ounce denominations. Because they are only 92% pure, so as to meet the “one troy ounce of gold” requirement, these coins weigh more than one ounce. Every one of the four denominations have the slimmed down Saint-Gaudens design on the obverse (heads) and a family of eagles on the reverse (tails). The gold used in American Eagles must be “newly mined” and only from US gold mines. The United States Mint makes a profit selling these things at a small premium to spot (3%, 5%, 7% and 9% for the 1, ½, ¼ and 1/10 ounce coins, respectively) and the law says they are to continue to produce and promote these coins to the public “indefinitely.” We all know that law could change and when it does it will undoubtably be without any advance notifcation.
The US Mint markets American Eagles in large orders to “APs,” or Authorized Purchasers, which are auditedfirms that are experienced market makers in gold coins with a minimum 3-5 year history and minimum tangible net worth north of $20 mn. The AP companies need to buy the coins in minimum orders of 1,000 ounces. You can obtain American Eagles through banks, brokers and dealers. The most trouble free way is by means of reputable online coin dealers. search on the internet and compare prices. These are commodity coins and you really should only purchase the cheapest ones, ie, the coins with the smallest premium to the spot gold price.
Note: The US Mint also offers “Proof” and “Uncirculated” American Eagles directly to the public. These coins are manually fed into the stamping machine and stamped several times. They are then “examined by white gloved inspectors” and are attractive to coin collectors only. These collector coins have a “W” mint mark imprinted on them to distinguish them from their similar looking gold bullion cousins. “W” stands for the mint where the coins were made: West Point, NY . The premium for these coins is greater than for regular American Eagle Gold Bullion Coins and you really should not buy “proof” or “uncirculated” coins if you are really only interested in getting exposure to gold. This is “expensive gold.”
Since their release 26 years ago, American Eagles have become the world’s most popular bullion coin. American Eagles are the only gold bullion coins whose weight and purity is assured by the US government. Because of this guarantee they can be purchased for Individual Retirement Accounts (IRAs).
The Maple Leaf is made by the Royal Canadian Mint and is the official gold bullion coin of our neighbor to the north. Until the release of American Buffalo Gold Bullion coins, the Maple Leaf was also the purest gold coin regularly minted anywhere at 24 karats (.9999 fine, or “four nines”). This coin was introduced in 1979, when the only 1 oz. gold coin regularly minted was the Krugerrand. The Maple Leaf is available down to 1/20th of an ounce and was .999 (three nines) pure until the purity was elevated to .9999 (four nines) in November, 1982. This means the coins are soft and easily damaged as they are virtually pure gold and are without any alloys which make coins tougher and more long lasting. A few special edition Maple Leafs have been minted with “five nines,” or .99999 pure.
Like the US Mint, the Royal Canadian Mintsells these gold coins via banks, brokers and dealers.
The Krugerrand was the first modern day, low premium 1 troy ounce gold coin to be produced by a national mint and sold globally. The “Kruger” gets its name from the word combination of the bust of Mr. Kruger on the obverse and “rand” which is South Africa’s monetary unit. Paul Kruger was the face of the Dutch Afrikaans resistance against the British during the Second Boer War in South Africa from 1899-1902 and he was a four-term president of the country . He is seen by many South Africans as a national hero. The Krugerrand itself was introduced in 1967, during the difficult time of Apartheid rule with the notion of promoting South African gold. By 1980, the coin owned the global gold coin market with a 90% market share despite being prohibited by many anti-apartheid governments in the 1970s and 1980s. This amazing success pushed other national mints to create their own 1 oz. gold coins, such as the Canadian Maple Leaf (1979), the Australian Nugget (1981), and the American Eagle (1986).
The Kruger is 22 karats pure (.9167 fine) and consists of one troy ounce of pure gold. Because the coin isn’t 24 karats (100% pure), it in fact weighs more than one troy ounce. Copper makes up the other 8.3% of the coin and is why Krugers look more “red” than other gold coins. Krugers can be obtained by means of dealers, online and offline, as well.
One thing to keep in mind when investigating which coins to invest in: generally speaking, Americans buy American coins, Canadians prefer Canadian coins and South African’s buy Krugers. This isn’t to say a Krugerrand won’t be welcome at a coin dealer outside of South Africa , it will, but you will enjoy more ready acceptance buying and selling coins from the country you live in .
All three coins have an identical amount of gold: one troy ounce. All three coins are minted and guaranteed by their respective governments and have no numismatic value; they are worth solely by their gold content . The premiums above the spot price of gold these coins are sold for are determined by current market supply and demand but are typically in the single digits . For acquiring cheap gold exposure, buy the lowest premium coin and protect yourself effectively and efficiently.
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