Gold coins have been around since ancient times. Gold's unique qualities made it the ideal metal of choice for coinage. Buying gold coins is a popular and enjoyable way of participating in the gold market.
Early Gold Coins
The early gold coins of the United States and Great Britain were minted to be circulated as money. As such, they were struck in 22-karat fine gold. The pre-1933 United States Double Eagles contain 0.9675 ounce of gold and have a face value of US$20 while the British Sovereign gold coins contains 0.2354 ounce of gold and were legal tender for £1.
At that time, the price of gold was fixed and so these coins were worth their face value. Today, they are much sought after by collectors and are now worth many times over their face value going by the value of their gold content alone. Some of the rarer dated coins can fetch even higher prices due to their numismatic value. In 2002, a 1933 Saint Gaudens Double Eagle gold coin was sold in an auction for a whopping US$7.59 million!
Modern Gold Bullion Coins
The modern gold bullion coin contains 1 ounce of gold. The first gold bullion coin is the South African Krugerrand first issued in 1967. The Krugerrand was the first gold coin to contain exactly one ounce of fine gold and was minted solely to be purchased for investment purposes.
Since then, one ounce gold bullion coins were issued by many other countries around the world, including the United States, Great Britain, Canada, Australia and China. Some of the first bullion gold coins to be issued were the American Gold Eagles, Canadian Maple Leafs, the UK Gold Britannias and the Australian Gold Nuggets.
22k Gold Coins vs. 24k Gold Coins
When gold coins were first introduced, they were put into circulation as money. As such, they needed to be durable. Pure gold is too soft to be made into coins meant for everyday use. Alloying gold with trace amount of copper and/or silver made the coins much harder and more resistant to wear. 22 karat gold coins contain 91.6% gold alloyed with silver and/or copper.
Today, however, gold coins are purchased mainly for investment purposes and there is a general preference for 24k pure gold, as demonstrated by the popularity of the Canadian Maple Leaf gold coins which were the world's first 24k gold bullion coins.
Due to popular demand for 24k pure gold coins, the United States, which has traditionally minted only the 22k American Gold Eagles, launched the 24k Gold Buffalo series of pure gold bullion coins in 2006. Then in 2009, a 24 karat version of the famous St. Gaudens Double Eagle gold coin was issued, this time containing one full ounce of .9999 fine gold.
Nowadays, investors are spoilt for choice when it comes to buying 99.99% pure gold bullion coins. In the heat of the competition in the 24k pure gold coin market, the Royal Canadian Mint went one step further in 2007 and struck the first 99.999% pure Canadian Maple Leaf gold coin.
The Collectible Gold Bullion Coin
The concept of the collectible gold bullion coin probably started with the Chinese Panda gold coin which was first issued in 1986. They are 24k gold bullion coins just like the Canadian Maple Leaf gold coins except that their reverse panda-themed design changes every year. Panda gold coins of certain years that have popular designs can command higher premiums in the open market. This made the Chinese Panda gold coins very popular with gold coin collectors.
Gold bullion coins with designs base on the animals from the Chinese Zodiac are also very popular with gold coin collectors these days. These so-called lunar gold coins are issued in many countries including China, Canada, Singapore and Australia. Interestingly, the most popular lunar gold coins today are not from China but are those from the Australian Lunar Gold Coin series.