In the past, gold coins were made to be used as a means of exchange and to circulate, and a common fear was that they would not contain gold to match their denomination. Today's modern gold coins are a popular store of wealth for those who wish to own gold as they are of a known quality; difficult to counterfeit or interfere with; reasonably easy to store; of a size that if needed a small portion of a holding may be liquidated in an emergency; able to be readily sold without having to be asssayed to ascertain their purity, and are readily available.
Many countries still mint gold coins and these are popular among people who desire to "hedge" against inflation or a store of value, these gold coins are often referred to as Bullion Coins. While bullion coins do have a nominal face value this is in no way meaningful as to their actual resale value, which is mainly dictated by their troy weight and the current market price of the gold actually contained within the coin.
One such country that mints bullion coins is South Africa who introduced the Krugerrand in 1967 to cater to this demand; and this market was without doubt the reason for its convenient gold content - exactly one troy ounce. South Africa being one the major gold producers at the time of minting the Kugerrand, was the first country to produce a modern, low premium bullion gold coin (priced only slightly above the bullion value of the coin's gold content). Since then many other countries have started to mint gold coins of a guaranteed purity and weight for both collectors and those who buy them for their value both at the original time of purchase and as a hedge of value for the future.
| 1978 South African Krugerrand | |
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Gold bullion coins usually come in 1 oz, 1/2 oz, 1/4 oz, 1/10 and 1/20 oz. sizes. Most countries have one design that remains constant each year; others have variations each year, and in most cases each coin is dated. A 1/10th oz bullion coin is about the same size as a U.S. dime. A 1 oz. gold bullion coin is about the size of a U.S. half dollar.
The Perth mint in Australian still strikes gold coins. They are not made as legal tender for general circulation, but to sell to people who want to have some of their wealth stored in gold or who want gold in their coin collection. Since 1980 Australia has issued gold coins with face values between $5 and $3000.