Do you know what investment coin is?

Gold has been used as a means of payment for thousands of years. The first forms of its use in the form of coins appeared in the 7th century BC. in Lydia, present-day Turkey. They looked more like golden balls with images of animals and rulers of the region.

For 2,600 years, as technology evolved, so did gold coins. They are becoming increasingly sophisticated, with detailed images and anti-counterfeiting safeguards.

Today’s investment coins are much more difficult to counterfeit than those of a hundred years ago. During these thousands of years, the stone presses went to laser engraving, and the concentration of pure gold in the coins reached the highest possible levels.

But first let’s look at how we determine if a gold investment coin is one.

Definition of investment gold coins

There is a set of international regulations that determine which coins are considered investment products and which are not. For a coin to be an investment instrument, it must:

• to have been produced after 1800;
• to be made of at least 90% pure gold;
• has been or will be legal tender in the issuing country;
• to have a final price not higher than 80% of the price of the gold contained therein.

These measures have their own logic. Coins produced before 1800 are considered part of the historical treasury of the issuing country and are traded only on the basis of certain documents.

The minimum content of 90% pure gold was determined thanks to the pan-European standard in the second half of the 19th century. This happened during the existence of the Latin Monetary Union, the predecessor of the Eurozone. Then countries like France, Switzerland, Italy, etc. decide on a standard for the coins produced to facilitate transactions between countries. This led to the creation of millions of coins across Europe with a 90% gold content, representing 21.6 carats.

If the price of a gold coin exceeds the price of the gold content by more than 80%, the seller is required to charge value added tax. Investment gold is not subject to VAT in the European Union. Thus, the coin will no longer closely follow the international price of gold, therefore it cannot be an investment product.

But these coins also fall into two categories.

1. Historical gold coins

Historical gold coins are mainly coins that were used in everyday transactions. About a hundred years ago, gold coins were used to purchase various goods and services.

However, there are also gold coins that are considered historical, even though they are produced today. These are the South African Krugerrand and the American Eagle coins. The reason they are considered historical coins lies in their pure gold content. Unlike modern coins, they are made of 22 carat gold, or 91.7% purity.

2. Modern gold coins

Modern gold coins are made of 24 karat pure gold. It is most commonly described as .9999 or .99999 gold, the latter being the purest gold we can produce. We will never see gold described as 100% pure as it is a difficult metal to mine and refine and will always have some percentage of impurities.

Modern coins that are 24 carats require much more care than historical coins. They are delivered in plastic capsules or tubes (if we are talking about orders of tens of coins), precisely to protect them from possible scratches or damage.

Certificates of authenticity – a myth

When it comes to gold coin certification, it’s important to remember that only the mint that produced the coin in question has the right to issue authentication documents. No bullion dealer has such powers.

It is also important to note that the coins do not have a serial number. Thus, it is not possible to attribute a document to a coin, as there is no certainty that the document will accurately authenticate your coin.

For these reasons, the international standard requires that coins be inspected for their physical characteristics. In other words, it is recommended to check the weight, thickness, diameter and details of each coin purchased.

All of these features can be found on the mint’s website and should match exactly, especially in the case of modern coins. Historical coins that were used in the past allow slight deviations from the catalog characteristics.

The only coins that have a certificate are those from the Canadian Mint – Call of the Wild series Canadian Maple Leaf coin.