A History of Gold Coins and Their Value

Gold and silver have been used to make coins for both business and trade ever since the first coins were made in Lydia, or western Turkey, in the 6th century BC. They bore faces of either a bull or a lion on the front and either a seal or a punch mark on the back. They were made from an alloy of gold and silver called electrum, which could be found in the local rivers of the region. They weighed anywhere from .2 grams to 17.2 grams. When these first coins were produced, the practice of coin collecting and investing began and has evolved in various cultures over hundreds and thousands of years.

Gold coins were popular up until the Great Depression in 1933 when the government took control of gold to restore the wealth of the nation. Because the United States was a leader in gold coin purchasing, selling, and production, this put an end to the global coinage era. Franklin D. Roosevelt signed executive order 5102, which forbid American’s to hoard any kind of gold bullion, gold coin, or gold certificate. If they didn’t turn in all but five ounces of their gold in to the Federal Reserve they faced a fine up to $10,000 ($166,000 inflation adjustment, 2009), ten years in prison, or both. President Gerald Ford signed a bill that made owning gold legal once again in 1974, and since then gold coins have once again gained popularity and are still popular all over the world.

Today coins are collected and traded by coin enthusiasts, historians, and even businessmen. Gold coins used in business that are kept as an investment or store of value are called bullion coins, and are used to invest gold without considering the actual coins nominal value of the coin. This particular type of coin is not used in day to day commerce and is available in various weights. Gold is considered to be an excellent way of exchanging value because it is easily broken down without having its value affected. Gold is preferred to silver because it has a higher density, higher value, lesser weight, is easily transported, and takes longer to decay than nearly all other metals. It is also much more difficult to counterfeit.

There are multiple types of valuable coins available all over the world: American Eagles, UK and Australian Gold Sovereigns, South Africa Krugerrands, Canadian Maple Leafs, and Chinese Pandas are just a few of these. The South African Krugerrand was first minted in 1967 and is produced by the South African Mint Company. It was originally intended to circulate as currency and therefore was made out of a different material than most other bullion coins. Although it was legal tender, Western countries made it illegal to import these coins during the 1970′s and 1980′s because of South Africa’s policy of apartheid. The apartheid was abandoned and trade continued in 1994. During the 1980′s the Krugerrand accounted for just over 90% of the entire world’s gold coin market, which led to other countries to produce their own form of gold coin, two of these being the Canadian Maple Leaf and the American Eagle gold coin.

American Eagle gold coins are probably the most popular gold coins in the world; they were designed by Adolph A Weinman, authorized by Congress in 1985, and minted in 1986 and come in two different types: bullion and proof, both of which feature a walking liberty design. American Eagle gold coins are made in four different sizes: 1/10 ounce, ounce, ounce, and one ounce. The price is dependent upon the size of the coin, and because of their quality, content, and backing by the government, they make a sound investment for anyone.

The American Buffalo gold coin, designed by the well-known, American sculptor James Earl Frasier and commonly referred to as the “gold buffalo,” was introduced to the United States in 1913 by the US Mint, and is still offered by many authorized purchasers. The coin features a Native American Chief on the front side and a buffalo on the back. The back also contains an inscription of the coin’s weight, the gold content, and the denomination of the coin. The US government has guaranteed the purity and quality of the American Buffalo gold coin, making it the safest and most risk free trade opportunity.

Investing in gold coins can be a very profitable investment. The value of the coin stays high, making it an extremely profitable asset. Investing in gold is not something that is restricted to the United States; it is profitable in all cultures and countries because the national wealth of nearly all countries is measured by the amount of gold they possess. This is the main reason why many people that have doubts about their country’s currency will buy gold coins. In a situation like this, the bullion coins will work well; however older gold coins (pre-1930′s) have an even greater degree of safety.

Many people worry about risk when investing, but luckily the risk is minimized when investing in gold because it is a standalone investment and the value varies inversely to the stock market. After all, gold will always be in demand, and therefore it will always give good returns. It can even be owned, sold, and transferred without documentation. Once you build up your portfolio, you can either hold on to your gold coins, or you can sell them at the current market rate if you are ever in need of money. The bottom line concerning gold: it is a sound investment practice with minimal risk involved that is popular the world over, just as it has been for thousands of years.

Learn more about collecting gold coins. Stop by Kevin Goldstein’s site where you can find out all about gold coins and how they can make a great investment.