Investors' Top 4 Bullion Coins
Article looking at factors to consider by Pegasus Coin and Jewelry owner John Maben is published by CoinWeek.
With global chaos seeming only a blink away and with the growing threat of inflation caused by governments pumping trillions of dollars and euros into Western economies, the idea of investing in precious metals is gaining fans.
Buying gold, silver and other precious metals is considered a way to protect against inflation and as a last-resort store of wealth in the event currencies collapse or war or natural disasters strike.
One of the most popular and convenient ways to buy precious metals is to invest in bullion — coins struck by government mints at a certified and guaranteed purity and weight. Such coins are portable and recognized the world over for their reliable value. They differ from earlier (in the case of the U.S., before 1933) gold coins in that they are beautiful but don’t interest collectors.
Let’s look at the “Big Four” of 1-ounce gold bullion coins.
How many have been produced?
Unlike collectible, or numismatic, coins, for which rarity increases value, one factor to consider when deciding which bullion to purchase is how many of the coins have been minted. This is because one of the goals of bullion in addition to safety is liquidity — the ease with which they can be sold or exchanged for goods or services. Presumably, the coins held in greater numbers are more popular and widely recognized.
Not including proof and other special mintages, production estimates for the 1-ounce gold bullion Big Four are:
About 60 million Krugerrand. The coin, the first bullion coin introduced, in 1967, was produced to market South African gold. It was quickly accepted but its imports to many international markets diminished in the 1970s and ‘80s because of boycotts protesting South Africa’s apartheid. The U.S. government banned its import in 1985. That ban ended after apartheid ceased in 1991. The coins are made of 22k, or 91.67% pure, gold.
About 23 million Canadian Maple Leafs struck from 1979 to 2013, the latest year mintage figures have been released. The second bullion coin introduced, it was struck in 22k gold in1979, 1980 and 1981. After that, the purity was increased to 24k, or .9999% gold.
About 18.7 million American Gold Eagles. The first U.S. bullion was first struck in 1986 and quickly became the most popular bullion coin with U.S. investors. It is produced in 22k.
About 600,000 American Buffalo coins. The U.S. Mint’s answer to the 24k Maple Leaf was first struck in 2006 and quickly gained acceptance in America.
Designs and specifications
The grandaddy Krugerrand weighs 1.09 troy ounce (33.93 grams) to achieve its Actual Gold Weight of 1 troy ounce. It is 1.28 inches (32.77 mm) in diameter and 0.11 inch (2.84 mm) thick. It retains its original design, with a portrait of Paul Kruger, president of the South African Republic from 1883 to 1900, on the front, or obverse, and a springbok antelope on the reverse.
The Canadian Maple Leaf is slightly lighter and smaller because its 24k purity is higher. It weighs 1 troy ounce (31.10 grams) and has a diameter of 1.1811 inch (30.00 mm) and is 0.0878 inch (2.23 mm) thick. It has, of course, a maple leaf on its reverse and a portrait of Queen Elizabeth II on its front. The queen’s portrait has been updated three times in keeping with her age and appearance. The Maple Leaf recently has had anti-counterfeiting measures incorporated.
The American Gold Eagle weighs 1.0909 troy ounce (33.930 g), has a diameter of 1.2874 inches (32.7 mm) and is 0.1129 inch (2.87 mm) thick. By law, its gold content must be mined in the U.S. Its obverse design of Lady Liberty is based on the work American sculptor Augustus Saint-Gaudens did for the the $20 gold coin minted from 1907 to 1933. The reverse, designed by sculptor Miley Busiek, shows a male eagle flying with an olive branch above a nest.
The later U.S. bullion arrival, the American Gold Buffalo, is slightly smaller and lighter because of its 24k purity. It weighs 1.0001 troy ounce (31.108 g), has a diameter of 1.287 inches (32.7 mm and is 0.116 inch (2.95 mm) thick. The obverse design is the idealized Native American portrait on the Indian Head nickel by sculptor James Earle Fraser. The reverse shows Fraser’s American bison, also from the nickel, which gave the coin its name.
Options for buying bullion
The Big Four come in smaller weights — even varieties in silver. And other 1-ounce gold bullion coins exist, including the Austrian Philharmonic, widely accepted in the European Union and elsewhere, the Australian Kangaroo, also known as the Nugget, and the Gold Panda minted in China.