Gold Bullion Coins and Bars
Throughout the centuries many numismatists have considered buying rare gold coins as a viable diversification from paper based equities, however when a client decides to invest in precious metals, to buy gold coins exclusively for their intrinsic worth, to purchase silver bars or to acquire rare and strategic platinum, they have truly embarked on the world of tangible hard assets. We at National Coin Broker are pleased to offer our services and expertise in this field to you, our valued clientele.
Why is gold referred to as a precious metal?
A metal is deemed to be precious if it is rare. The discovery of new sources of ore or improvements in mining or refining processes may cause the value of a precious metal to diminish at least temporarily. The status of a “precious” metal can also be determined by high demand or market value. For the numismatist buying rare gold coins, it can be a very lengthy and calculating process. Conversely, precious metals in bulk form and bullion are traded on commodity markets and through established dealer networks throughout the world.
What is gold bullion?
Bullion metals may be cast into ingots, or minted into coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money. With that said, the various US Eagle gold bullion coin issues became so popular after their introduction, that a secondary market began to emerge and soon third-party grading services PCGS/NGC began encapsulating and grading the various gold bullion coins. Amazingly, several issues of the gold American Eagle family of bullion coins are really quite scarce and are actually considered, at least within the context of the modern series, rare gold coins. However it is wise to remember that most investors are not buying rare gold coins, they are looking to buy gold coins as close to the spot or current market value as possible. If however, a certain issue is also deemed collectible, well then you have the benefit of both worlds.
How is gold bullion made?
Many nations mint gold bullion coins. Although nominally issued as legal tender, these gold coins’ face value as currency is far below that of their value as gold bullion. For instance, Canada mints gold Maple Leaf bullion coins at a face value of $50 containing one troy ounce (31.1035 g) of gold. Bullion coins’ minting by national governments tends to give them some numismatic value in addition to their bullion worth, as well as certifying their purity.
The level of purity varies from issue to issue. 99.9% purity is common. The purest mass-produced bullion coins are represented in the Canadian Gold Maple Leaf series, which go up to 99.999% purity. Please note that 100% pure gold bullion is impossible, as absolute purity in extracted and refined metals is asymptotically approached.
Many gold bullion coins contain a stated quantity (such as one troy ounce) of the marginally-impure alloy. In contrast, the Krugerrand is one of many historic and modern bullion coins of 22kt with a stated content (usually one troy ounce), with the other component(s) of the alloy making the coin heavier than one ounce in total. Still more gold bullion coins (for example: British Sovereign) state neither the purity, the fine-gold weight nor the denomination on the coin, but are recognized by their consistent composition through the centuries.
Interestingly in the early to mid-1970’s, thousands upon thousands of British gold sovereigns made their appearance in the United States and were bought and sold at very modest premiums over their gold bullion content. In fact, before dealers started searching through the sovereigns, many rare gold coins from this series, especially those minted in Australia, were pulled from dealer’s inventory by savvy collectors at merely gold bullion prices! At least for a time, before dealers became aware of this trend, this was an extremely affordable way to buy rare gold coins!
While the British Sovereign weighs in at .2354 ounces, one of the largest bullion coins in the world is the 10,000 dollar Australian Gold Nugget coin. Minted in Australia, this mammoth consists of a full kilogram of 99.9% pure gold. There have been a small number of larger gold bullion coins which have been minted, but they are impractical to handle and not produced in mass quantities.
China has produced gold bullion coins in very limited quantities (less than 20 pieces minted) that exceed 260 troy ounces (8 kg) of gold. Austria has minted a gold bullion coin weighing in at 31 kg (the Vienna Philharmonic Coin minted in 2004 with a face value of 100,000 Euros). As a stunt to publicize the 99.999% pure one-ounce Canadian Gold Maple Leaf series, in 2007, the Royal Canadian Mint made a 100 kg 99.999% gold bullion coin, with a face value of $1 million, and now manufactures them to order, but at a substantial premium over the market value of gold. Literally these are some heavy metal rare gold coins! Although great for display, certainly not conducive for storage in your typical safe-deposit box.
Gold Bullion Coins As A Hedge
Certainly with the rapid advancement of gold, now trading over $1,200 per ounce, individuals looking to buy gold coins as a hedge against inflation and protect their dwindling paperback assets from further erosion are looking to secure the best value possible. Interestingly as the price of gold escalates, the collectible premium over the current spot market for US $20 Liberty and Saint-Gaudens gold coins has made them a viable option for this discussion. Whereas previously it may have been considered “buying rare coins” when the discussion of Double Eagles came up, many high-end circulated and low-end mint state Double Eagles are affordable options when looking to buy gold coins merely for their bullion content. National Coin Broker offers ALL of the most popularly traded gold bullion coins and bars.