If you’ve made the decision to buy gold coins but not sure which gold coin to purchase then this post here should hopefully set things straight. This specific analysis focuses on gold bullion coins as an investment and therefore rules out much of the rare, historic and collectible gold coins known as numismatic gold coins.
Investment grade gold coins should have certain characteristics that must be met if they are to be considered wise purchases.
-Gold coin purity should be at least 22k: The higher the purity of the gold coin in question, the less ‘junk’ alloys it has in the form of copper or even silver. High grade coins end up costing cheaper in terms of pure gold content because of the associated premiums involved with minting each coin. While 24k gold coins are preferred by some investors, having some copper in the coin gives it a more tough property and is less likely to get ‘damaged’ if it changes hands constantly as coins use to do back in the day. Of course these days, coins sit idly in safes and coffers but we never know what the future holds.
-Coin should be in wide circulation (high supply): Obscure gold coins that aren’t widely available end up turning into numismatic coins that don’t have a specific market. If we are to think of gold coins as a form of money, then there should be plenty of it around so that scarcity doesn’t remove its monetary property.
-Gold coin brand should be established: One of the original intents and reasons behind minting gold coins was to establish some trust and consistency to gold. Gold coins turn a perfectly homogeneous commodity into something having a reputation, legitimacy, and a level of expectation. Much like brands in the real world, the best gold coin brands assure the buyer that the purity, weight, and quality of the gold coin in question is up to par with what is promised.
-Gold coin demand should be high: If a particular gold coin has relatively low demand, then it will be hard to find a buyer if/when you decide to sell it. Being able to buy and sell on the secondary market for a fair price is not only a sign of a good car but also applies to gold coins.
-Gold coin should be aesthetically pleasing: Even though gold coins derive all of their value from the gold contents that it holds, we live in a world where aesthetics is always a factor regardless of how much of a difference it makes. For example gold coins with Arabic writing will likely not draw the interest from Western gold coin investors but Chinese gold coins sporting the Panda on the other hand show aesthetics can transcend borders and create demand where you wouldn’t expect.
Each one of the coins mentioned in this list satisfy the gold coin requirements for investment mentioned above. Personal tastes and geographical location will be the determining factors in making the final decision from this point on. Notable distinctions, history and advantages are listed for each coin to fill you on their backgrounds.
We’ve compiled the sales figures from the past decade for the most popular gold coins, to give you a general feeling of the availability of these coins.
1) Turkish Republic Gold Coin
This might be surprising for some, but Turkey has by far produced more gold coins than any other nation in the past decade. Turkish gold coins are referred to as ‘Republic’ coins after the word ‘Cumhuriyet’ in Turkish, and two sub-types exist in Meskuk (standard) and Ziynet (decorative) coins. It is the Ziynet coins that are particularly popular as citizens are accustomed to buying them frequently as gifts necessary for practically every special occasion ranging from birth of a baby, circumcision, graduations, military service, engagement, and marriage ceremonies. Turkey also has fully embraced the other use of gold, as a store of value to fight inflation, following the country’s massive inflation and financial crisis it experienced at the turn of the 2nd millennium.
Turkey benefits from having one of the biggest covered markets in the world known as the Grand Bazaar, which packs over 3,000 shops with many of them selling/buying/fixing gold or jewelry in some form assuring constant availability and a liquid market for some of the lowest premiums you will find anywhere. Demand for the Turkish gold coins also comes from the Middle East, so there is no doubt that a willing buyer or seller will always be available if you’re in the region. To further smoothen the deal, Turkey is very lax and open to using gold as a form of money and no taxes or restrictions exist. The banking sector openly embraces gold and views it as money, allowing for a range of services like gold checking accounts, gold jewelry to be turned in for cash equivalents in a bank account, gold ATMs, and other innovative services. The first ever gold coins were actually minted in modern day Turkey back in 550 BC, so historically Turkey has served as one of the gold capitals of the world.
The one downside for foreign gold investors, besides the reduced availability of these coins in international markets, might be the unorthodox weight of these Turkish gold bullion coins. Whereas most modern coins in the world today are denominations of a troy ounce, the Turkish coins (which have 22K purity or 91.7%) are denominations of 7.216 grams of brute weight and 6.615 grams of pure gold content. There are 5 total sizes for Turkish gold coins (applicable to both the standard and decorative coins). The 6.615 pure gold content coin is referred to as a ‘full’ coin or 1 Lira, and the other 4 coins are a Quarter Lira, Half Lira, 2.5 Lira, and 5 Lira coins (with each of those being a fraction or multiple of the ‘full’ coin and its associated brute and net weight). The quarter and full Ziynet (decorative coins) and the full Meskuk (standard coin) are the most popular of the bunch. The Ziynet coins usually comes with a hook soldered on its edge so that it may be attached onto clothes during wedding and circumcision celebrations. The Turkish State Mint claims to be able to produce 1.5 tons of gold coins per week, which is currently being pushed past its limit if we look at their January 2013 figures which states that a whopping 10 tons of new gold coins were minted (compare this to just 2.1 tons of gold coins being minted in all of 1991 and you can clearly see the fast rise of demand).
2) South African Krugerrand Gold Coin
In 1970, South Africa controlled 62% of global gold production and nearly 80% if we take out the Communist bloc which was hoarding its gold at the time. Such a prominent position put it in prime position to anticipate and dictate the future of the gold market. Anticipating an end to the Gold Standard, the Rand Refinery (the world’s largest gold refiner) decided it would be a good idea to manufacture modern bullion coins for public consumption. The thinking was that during the gold standard, private ownership of gold was forbidden in many countries and territories so if the Gold Standard would be abolished (as it was in 1971), then a slew of demand could be met in the form of coins. So in 1968 the first modern 1 troy ounce gold bullion coins were manufactured, and in 1970 started going into general circulation. During the 70s, South Africa pretty much had a monopoly on producing gold coins and were the only ones making them in the uniform 1 ounce unit that we recognize today. Eventually other countries saw the success of this ordeal, and starting minting their own coins.
In present day, the role of South Africa in gold production is much less prominent, with only 8% of yearly mining production attributable to them. Still, the Krugerrand holds a special place in gold investors hearts for its history and trailblazing leadership. It’s still the most common modern gold coin in circulation, constituting roughly 1/5 of all the coins produced since 1970.
The Krugerrand derives its name from Paul Kruger, the President of the South African Republic from 1883 to 1902. From 1970 to 1979 only the 1 oz coin was made, but since 1980 3 other sizes (1/2 oz, 1/4 oz, and 1/10 oz) have been introduced representing 20% of the near 60 million Krugerrand’s in existence today. Krugerrand gold bullion coins are all 22K and have major brand recognition thanks in part to the springbuck (a type of antelope) which is on the back of every coin.
3) Canadian Maple Leaf Gold Coin
The Canadians were the first outsiders to recognize the huge popularity of the Krugerrands back in the 70s and got in on the act themselves in 1979 in a big way. They were not content to simply copy the South Africans and the Royal Canadian Mint introduced the Maple Leaf gold bullion coin. It was the first ever 24K bullion coin of the modern era (99.9% purity), with the gold content even further increased in 1982 to 99.99% and 99.999% in 1998. It stands as the most popular 24K gold coin in the world with nearly 40 million Maple Leaves expected to be in circulation.
While the 99.99% 1 oz variant is the most popular Maple Leaf coin (~55%), other coins such as the 1/2 oz, 1/4 oz, 1/10 oz, 1/20 oz, and 99.999% 1 oz Maple Leaf coins are also available.
4) Chinese Panda Gold Coin
China has a rich history and are responsible for the first forms of currency stretching back almost 3000 years. They got into modern gold bullion coin production in 1982, with the China Gold Coin Incorporation (CGCI) introducing the 24K (99.9% purity) gold Panda bullion coin in 4 sizes: 1 oz, 1/2 oz, 1/4 oz and 1/10 oz. They expanded their repertoire to include 1/20 oz and 1 g versions in 1983, which made it the first bullion gold coins at these sizes.
Perhaps the biggest novelty however, was the decision to a have new design on its reverse each single year. This turned the Panda coin into a collectible and bullion coin at the same time, becoming the first such coin of its kind. China is now the world’s largest gold producer with ambitious growth plans both domestically and abroad to accumulate as much gold as possible. China’s gold reserves aren’t officially reported but they are rumored to rival the United States’ reported holdings of 8,133 tons. If China is indeed hoping to establish itself as a reserve currency candidate with gold as its backer, the Chinese Panda coin’s significance could potentially grow further.
5) American Eagle Gold Coin
The American Eagle gold coin was launched in 1986, in four different sizes (1 oz, 1/2 oz, 1/4 oz, and 1/10 oz) at 22K purity. Much like the Turkish Republic coin, the 22K purity (being mixed with harder alloys) gives it a tougher metallic property that will better handle the wear and tear at times when the coins are in wide circulation as currency. The 24K American Buffalo coin was introduced in 2006 as an alternative for those buying gold coins in the USA.
The United States Mint is among the most storied coin manufacturers in history. US gold coin market is among the biggest in the world and the United States has the largest officially reported gold holdings in the world, making the American Eagle a popular choice even outside its geographic borders.
6) Australian Kangaroo Gold Coin
Australia started producing modern gold bullion coins in 1987 through the Perth Mint. The 24K coins boasted a purity of 99.99% and were initially labeled the Australian Nugget coin and until 1990 sported a different nugget design in each one of its 4 sizes (1 oz, 1/2 oz, 1/4 oz, and 1/10 oz). Since 1990 the Australian gold coins have featured a Kangaroo on its backside, although the name changed to the Australian Kangaroo coin only in 2008. Similar to the Chinese Panda, the Australian coins have featured a different Kangaroo design on its reverse side since 1990 making it a prime target for collectors and investors alike. The Australian Perth Mint has flexed its muscles recently by releasing the world’s largest gold coin - a 24K 1 ton coin.
Since 1996, the Perth Mint have issue a brand of gold coins known as Australian Lunar series whereby a new design is present each year depending on the Zodiac calendar. Other notable disctinctions of these Lunar gold coins is that they are issued in more different sizes (9) than any other gold bullion coin around and the mintage quantity is limited to a specific number to further increase its collectability.
7) Austrian Philharmonic Gold Coin
First minted in 1989, Austria’s Vienna Philharmonic coin was perhaps late to the party but it more than made up for that with its brand of creativity. First minted in 1989, Austria’s Vienna Philharmonic coin was perhaps late to the party but it more than made up for that with its brand of creativity. Boasting Vienna’s heritage as a land of music and serving as an ode to the Vienna Philharmonic Orchestra, the coin design portrays a variety of instruments and is considered among the most beautiful coins in existence. The coins themselves are 24K (99.99% purity) and are available in 4 sizes with the 1 oz being the most popular followed by the 1/10 oz, 1/4 oz, and 1/2 oz. The gold Philharmonic is the most popular gold coin in Europe.
Other brands that classify among the most popular gold coins in the world include the British Sovereign, British Britannia, Mexican Libertad but they don’t have nearly the amount of circulation or availability necessary to qualify for our list of the best gold coins for investment purposes. Whichever gold coin you decide to buy, make sure the premium you pay over the spot price is the least amount possible for the gold content you get in exchange because after all, it’s all about the gold.