Which Gold Coins You Should Buy for Investment Purposes

Buying gold coins for investment purposes is very different than dealing in rare coins, which have numismatic value and require a great deal of knowledge to be successful. With even a modest search, you’ll seemingly find unlimited options in terms of gold bullion to buy — but which coins are the best?

This article will focus on some of the most common and popular gold bullion coins (not rare or collectible gold coins), and will hopefully answer most of the questions that you have regarding gold coin investing, including which options may be best for you. For individuals who are interested in learning more about some other U.S. minted gold coin options, we recommend that you click here.

What to Look for When You Buy Gold Coins

There are a number of characteristics to look for in investment-grade gold coins:

  1. Gold purity of at least 22k. The higher the purity, the less alloys in the coin, such as copper. Most modern issued gold bullion coins have a purity of at least 91.6%. Some investors prefer 24k gold coins, but keep in mind that gold is a very soft metal. That’s why you don’t typically see 24k jewelry: alloys such as copper make the coin more durable and less likely to become damaged during handling.
  2. The coin should have a high mintage or be available in large supply. Obscure gold coins that aren’t in wide circulation may be more difficult to sell in the future. It’s important to have a wide and available market when the time comes to sell your gold coins.
  3. The brand or country of origin should be established. Well-known, established private mints or coins from one of the highest producing gold countries will assure you of the quality, weight and purity of the coin.
  4. Demand should be high. If the coin is of limited interest, it will be much more difficult to find a buyer when it’s time to sell the gold coins in your possession.
  5. The coin should be attractive. While you’re primarily buying gold bullion coins for their gold content, aesthetics do matter and will increase your available market.

Most Popular Gold Bullion Coins

These following coins meet all of the characteristics listed above for investment purposes. The coin(s) you ultimately buy will be based in part on availability in your area and your personal preference, but note that each coin has additional considerations to keep in mind, such as premiums and durability.

South African Krugerrand Gold Coin

South Africa had control of 62% of the world’s gold production in 1970. The Rand Refinery, the largest gold refiner on earth, anticipated an end to the Gold Standard and began producing gold bullion coins. Just a year later, the Gold Standard was indeed abolished. At the time, South Africa was the only country producing one ounce gold coins, which set the standard for other countries to follow.

The Krugerrand is now the most widely minted gold coin in circulation, and is available in a few sizes for private investors, including the standard 1 troy ounce Krugerrand, a 1/2 troy ounce coin, a 1/4 troy ounce coin and a 1/10 troy ounce coin. This makes Krugerrands a good option for investors with a smaller budget. Given its popularity and easily recognizable design, you will have no trouble selling these coins, even internationally if necessary. Krugerrands also sell at a smaller premium to most U.S. issued gold coins, such as American gold eagles. Additional information on South African gold krugerrands can be found in a prior article that we posted to our blog.

Austrian Philharmonic Gold Coin

The Philharmonic gold coins were first minted in 1989 and hold a special place in the hearts of many gold coin enthusiasts for their beautiful design reflecting Vienna’s heritage as a land of music. This is often viewed as one of the most beautiful coins in modern day. Philharmonic coins are 24k and are available in four sizes: 1 ounce, 1/2 ounce, 1/4 ounce and 1/10 ounce sizes.

The Philharmonic gold coins have the same purity as the Canadian Maple Leaf coins and are purer than the American Eagles; although they contain the same actual gold weight as American gold eagles. Still, these coins are prone to damage because of their purity, and they are susceptible to wear and tear.

Canadian Maple Leaf Gold Coin

The Maple Leaf gold bullion coin was the first ever modern minted 24k gold bullion coin. Its purity increased from 99.9% when it was first minted in 1979 to 99.9999% in 1998. It is now the most popular 24k gold coin on the market and available in the standard 1 ounce variety as well as 1/2 oz, 1/4 oz, 1/10 oz and 1/20 oz coins.

The Maple Leaf also has an advantage over the popular U.S. Gold Eagles: it has a lower premium. However, given its purity, the coin’s design is prone to damage and scratches, which can affect its value in the resale market.

American Gold Eagle Gold Coin

There are several clear reasons to buy the American gold eagle coin: it’s a government-issued bullion coin with high liquidity and low premiums and its purity and gold content is guaranteed by the United States government. Gold eagles are also legal U.S. tender and may be used for precious metal IRAs, which gives them a clear advantage over other gold coin offerings. The coin is produced in 1/10 ounce, 1/4 ounce, 1/2 ounce and 1 troy ounce denominations, and as is the case with most gold bullion coins, the smaller the size, the higher the premiums.

Australian Kangaroo Gold Coin

Australia began its production of gold bullion coins through the Perth Mint in 1987. These coins are composed of 24k gold and feature a Kangaroo on the backside, which makes them popular among investors and collectors alike. Each Kangaroo gold coin comes in a plastic capsule to protect it from harm given its purity.  As is the case with the other gold bullion options listed above, Kangaroos sell at lower premiums than American gold eagles.

Chinese Panda Gold Coin

China began producing gold bullion coins in 1982 with the 24k Panda bullion coin.  They were initially available in four sizes, but are also now available in sizes as small as 1/20 ounce. Eventually, the decision was made to give the Panda coin a new design on the reverse every year, which has made it the first coin to be a collectible and bullion coin at the same time.

At the time of this writing, China is prohibiting gold coin exports, so these coins will likely become more difficult to find in the months and years to come.

The Bottom Line

This list certainly isn’t all inclusive, but the gold coins that we highlighted above are available in large supply and sell at reasonable premiums, which should make them sound investment options. Whatever you ultimately decide, make sure the premium you pay over the spot price of gold is as small as possible and that you’re only buying gold bullion coins from reputable sources.

Tony Davis
Tony Davis