Gold Collector and Bullion Coins – How to Choose?

Gold coins attract with lasting value and a shine that does not fade for centuries. Before you buy your first one, it is worth knowing that gold coins fall into two different groups: bullion (investment) coins and collector coins. People buy them for different reasons, and their prices work differently. Here is how they differ, how to read fineness and weight, and how much you need to own a gold coin of your own.

Gold bullion (investment) coins

Bullion coins are used mainly to invest money in gold. Their price is close to the current value of the metal plus a small premium. They are struck in large mintages, every year with the same or a similar design. The best known are:

  • Krugerrand (South Africa) – 916.7 fineness (22 carats),
  • Maple Leaf (Canada) – 999.9 fineness,
  • Vienna Philharmonic (Austria) – 999.9 fineness,
  • Kangaroo (Australia) – 999.9 fineness,
  • American Eagle (USA) – 916.7 fineness (22 carats).

In the EU, gold coins that meet the conditions of investment gold are exempt from VAT. A coin must be at least 900/1000 fine, minted after 1800, be (or have been) legal tender in its country of origin, and its price may not exceed the value of its gold by more than 80%.

Gold collector coins

Collector coins are small works of art in gold. They have a low, strictly limited mintage, often only a few hundred pieces. They are struck in proof quality and often enhanced with high relief or colour. Their price reflects not only the value of the metal, but also the design, the minting technique, the mintage and the popularity of the series. That is why a collector gold coin usually costs more than a bullion coin of the same weight. In return you get a unique piece that may no longer be on sale in a few years. Read more about why mintage matters in What does a coin's mintage mean?

Bullion or collector – which to choose?

  • Want to keep your savings in gold, with price per gram as the top priority? Choose a bullion coin or a gold bar.
  • Looking for a special gift, or collecting specific series and themes? Choose a collector coin. Find ideas in A coin as a gift.
  • Want both? Choose a full-ounce gold collector coin with a low mintage. It has a high metal value and collector appeal at the same time.

Fineness and weight – how to read them

Fineness tells you how much pure gold is in the alloy. Au 999.9 (24 carats) is practically pure gold, while 916.7 (22 carats) is a harder, more scratch-resistant alloy. Gold coins are usually weighed in troy ounces: 1 oz is 31.1 g. Fractions of an ounce are also popular:

  • 1/2, 1/4 and 1/10 oz – classic smaller bullion and collector coins,
  • 1/100 oz – about 0.31 g of gold,
  • 1/500 and 1/1000 oz – miniature coins and medals, from about 0.03 g of gold, usually set in a decorative card.

Read more about the troy ounce in What does 1 oz mean on a coin?

The cheapest gold coins – where to start

Your own gold coin does not have to cost a fortune. At Magikos-Coins, 1/1000 oz and 1/500 oz miniature coins start at under 300 PLN, and 1/100 oz coins cost a few hundred złoty. They are a great first step into the world of gold and an attractive gift: the coin is set in an illustrated card, ready to give. Keep in mind that with such small weights you pay mainly for the design and craftsmanship rather than the metal itself.

Coin or medal?

Some miniature gold pieces are medals, not coins. A coin has a face value and is issued by a state, such as Niue, Samoa or the Solomon Islands. A medal has no face value and is not legal tender. Both can be made of pure gold, and the product description always states which it is. This matters to collectors, as coins and medals are usually collected separately.

Bimetallic coins: silver with gold

An interesting group are coins that combine a large silver coin with a gold inlay, such as the Masterpieces series featuring the rulers of ancient Egypt. They give the look of gold in a large format for a fraction of the price of a solid gold coin. Read more about enhancement techniques in Enhanced coins.

What to look for when buying a gold coin

  • Certificate of authenticity – essential for collector coins, and every coin from Magikos-Coins reaches the customer in its original packaging with a certificate.
  • The mint – a reputable maker guarantees quality. Meet the mints in Collector coin mints.
  • Mintage and condition – the lower the mintage and the better the condition, the greater the interest from collectors. Top condition is confirmed by NGC grading.
  • Storage – gold does not tarnish, but a proof finish scratches easily. Keep the coin in its capsule and don't touch it with your fingers. See our tips in How to store coins?

Summary

Gold bullion coins are a way to keep savings in gold, while gold collector coins combine precious metal, art and a limited mintage. A miniature coin in a card is enough to start, and for demanding collectors there are full ounces of gold, such as the Megafauna series by Germania Mint. Browse all gold coins at Magikos-Coins or write to us – we will help you choose.