Personal Finance

About Gold Coins and Rounds

The reason why all round shaped pieces of precious metal aren’t called coins, but also rounds, is that the word “coin” is reserved by the United States Mint for circulating currency minted by government mints world wide. Most investors that buy gold coins, does that because they consider them as a more secure product to invest in, since the coin is backed by a government and will most likely be in production for a long time.

The purity standard for these coins is somewhat different from silver. Since it’s such a malleable and soft metal, pure gold coins are very fragile and sensitive to mechanical wear and impact. In the old days when real gold was actually used to make circulating currency, the gold purity was lowered by adding silver and copper to the gold. This alloy is commonly know as crown gold and are still used today in some popular gold coins, like the American Gold Eagle (which features the statue of liberty on the obverse and a soaring eagle on the reverse). To compensate for the lack of gold in this alloy (91.67%), the American Gold Eagle is heavier than other coins. This makes the total amount of pure gold contained in the American Eagle coin exactly 100% of the weight stated on the reverse side of the coin.

Other gold bullion coins usually have a purity of about 0.999. In other words, they have less than 0.1% impurities. Canadian gold coins, like the Gold Maple Leaf made by the Royal Canadian Mint (RCM) are sometimes made with a purity of 0.9999, which is amongst the finest of all mass produced solid gold coins in the world. All of these coins are strictly for investing and collecting, and must be handled with the utter most care, since damaged, scratched, or otherwise out of state conditioned coins will have a reduced value.This will again affect the price of his investment, once the investor advertises his gold coins for sale.