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Bullion Investing: Factors to Consider When Deciding Which Coin to Buy

We look at the mintage, purity, and other details of the ‘Big Four’


By John MabenPegasus Coin and Jewelry ……
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 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 generally 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.

The Big Four 1-ounce gold bullion coins and estimates of their total production, not including proof and other special mintages, are:

The South African Krugerrand — production about 60 million. The coin, the first gold bullion coin introduced, in 1967, was created to market the metal produced in South Africa. 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.

The Canadian Maple Leaf — production unknown. One source says 23 million were struck from 1979 to 2013, but the Royal Canadian Mint says it does not release production figures for bullion products. The second bullion coin introduced, it was struck in 22k gold in 1979, 1980, and 1981. After that, the purity was increased to 24k, or 99.99% gold.

The American Gold Eagle — production about 18.7 million. The first U.S. gold bullion coin was struck in 1986 and quickly became the most popular bullion coin with U.S. investors. It is produced in 22k.

The American Buffalo — production about 600,000 coins. The United States 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 of its higher 24k purity. It weighs 1 troy ounce (31.11 grams) and has a diameter of 1.1811 inches (30.00 mm) and is 0.0878 inches (2.23 mm) thick. It has, of course, a maple leaf on its reverse. A portrait of Queen Elizabeth II is on the obverse. The queen’s portrait has been updated three times in keeping with her age and appearance. The Maple Leaf includes anti-counterfeiting measures.

The American Gold Eagle weighs 1.0909 troy ounces (33.930 g) to achieve its Actual Gold Weight of 1 troy ounce. It has a diameter of 1.2874 inches (32.7 mm) and is 0.1129 inches (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 of American sculptor Augustus Saint-Gaudens for the $20 gold coin minted from 1907 to 1933. The reverse, designed by sculptor Miley Tucker-Frost (formerly 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 ounces (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 based on 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 also are produced in smaller weights — two of the four are even available 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.

You can’t really go wrong with any of these options, but we would rank popularity the U.S. as:

  • American Gold Eagle
  • American Gold Buffalo
  • Canadian Gold Maple Leaf
  • South African Krugerrand

Prices fluctuate with the spot price of gold, plus a premium, and buying in larger quantities will usually save you a few dollars per coin.

Whichever coin you choose to purchase, it’s wise to work with an Accredited Precious Metals Dealer such as Pegasus Coin and Jewelry.

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John Maben has been a full-time coin and precious metals dealer since 1978. He is a PNG, APMD, ANA, and FUN member. He is a former NGC VP and Grading Finalizer and currently owns and operates the brick-and-mortar Pegasus Coin and Jewelry in Bradenton, FL.

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