Gold coins have been held in high regard for all of history. Gold has caused political disagreements and military conflicts, and governments have used gold coins to stave off inflation, fund wars and pay off barbarians. But the purest gold coin is dependent on the type of currency you are examining.
The purest gold coins are the American Buffalo, the Canadian Maple Leaf, and the South African Krugerrand. When discussing gold coin purity, you must look at ancient coins and their gold content too. Pure gold coins are quite impractical as they are very malleable and prone to disfigurement.
Finding the purest gold coin is a matter of looking at the examples above and others and realizing that most modern coins do not have a high gold content. Ancient coins, however, are another story. In the following pages we will explore both and determine what coins had the highest gold content.
The History Of Gold Coins
Gold coins have been alluring throughout world history. Ancient Kings used them to build credibility and to fund wars. In modern times, gold coins are still a status symbol for a nation, but not so much for propaganda as for a symbol of immense wealth.
US Presidents, for instance, do not mint coins of themselves achieving great things the way Roman Emperors did (although a few might have wanted to do so). Gold is still a symbol of American wealth and power, though. By extension, gold coins help make that case.
100% Pure Does Not Exist
As much as political leaders have loved gold coins, though, there are a few realities that affect their appearance, composition and value.
There is, for example, no instance of a 100% gold coin (or jewelry for that matter) in everyday circulation. This is because pure gold is exceptionally malleable. Because of that, anything made of pure gold will bend or become distorted with a minimal amount of pressure.
To combat gold’s malleability, other metals or alloys are used. Often, the other metal has been silver, but copper and alloys have also been used. The earliest recorded case of an alloy being used with gold was Asia Minor, although that use was primarily due to the natural mixture of gold and silver in what was called electrum.
Finally, the gold content in coins is often affected by the economic and political situations facing a country. Nero, the Emperor of Rome, reduced the gold content in a Roman coin to be able to fund his extravagance. Other leaders have devalued gold coins to allow regular people to buy them for use during troubled economic times.
Ancient Coins
Much like their modern-day counterparts, ancient coins were made of numerous types of metals. Depending on the culture and their sophistication working with metal, coins could be made of gold, silver, electrum, copper and copper alloys, bronze and brass.
Asia Minor
In the 7th century BC, Asia Minor (what is now most of modern Turkey) minted coins made of an alloy of gold and silver, called electrum. Electrum was naturally occurring. Asia Minor coins were very consistent in their weight, which means that there were likely multiple coin denominations. The only question was the ratio of gold to silver.
A typical coin from Asia Minor has about 20% silver. Their raw value as bullion varied, however, because coins of the same weight could have more or less of each metal. Electrum coins were used for about 50 years before the gold-silver alloy was replaced by an alloy that was mostly silver.
Philip II
Philip II was a ruler of ancient Greece and under his reign gold coins became popular. Upon conquering Crenides (renamed Philippi), Philip gained control of the conquered peoples’ mines. This windfall provided the financial backing for his future expansion. He converted the bullion he seized into coins, specifically his tetradrachms and staters.
Philip II’s coins were made of a gold and silver mixture at first, but eventually migrated to purer content (gold coins and silver coins). The Ancient Greek coins had such a reputation for purity that entire countries ditched electrum in favor of minting gold and silver coins to trade with the Greeks.
The Roman Empire
Gold coins were used in the Roman Empire from about 300 BCE through the end of the Empire. The Romans balked at minting gold coins and distributing them to commoners because gold was considered a regal color and gold metal was exceptionally rare. It was not until Rome had conquered what we now call Spain that gold became common.
Because the Roman government only used gold coins for administrative payments or to bribe soldiers, the gold content of the coins tended to be high. Gold coins were known to wear exceptionally poorly and for this reason they were often melted down and restruck as needed.
Ancient Gold Purity
Ancient empires regarded gold as a royal metal. Because of this, the purity content in gold coins made by the Greeks or Romans was highly regulated and the percentage of gold in them was extremely high. It was common to have coins that exceeded 95% in gold content. This level of purity would be considered rare in today’s world of currency.
Pressures Affecting Gold Purity In Coins
Much like governments today, political and economic pressure influenced gold content in coins. Governments that were perpetually at war or experienced economic issues, tended to reduce their gold and silver purity levels in coins. Often, to be able to mint more currency to pay for things like war, the gold content was lowered.
Gold Coins In The Middle Ages
Roman coins heavily influenced currency, even today. In fact, many of the currencies that exist today are actually forms of Roman coins that were minted during the Middle Ages. Different empires continued to have their own currency, frequently evidenced by gold coins.
Byzantine Empire
The Byzantine Empire, also referred to as the Eastern Roman Empire, had a gold coin called the solidus. The solidus weighed about 4.5 grams. The Dinar, which was another gold coin weighing about 4.25 grams, was minted in Damascus in 690 AD.
Venice And Florence
These two cities issued their own coins that were renowned for their purity. Venice minted the Ducat and Florence minted the Florin. Both coins were accepted as part of international trade. On various occasions in history, coins of similar quality and gold purity makeup have been minted and sold.
Others
Just about every country issued their own gold coins in the late Middle Ages. England minted its first, called the Florin, in 1344. Germany issued a mint coin, called the gulden, much later in 1837. In addition, the Netherlands even issued its own gold coin, the cavalier d’or.
Each of these coins were created as a form of economic stimulus.
The New World And The Renaissance
The “New World” opened the floodgates for gold and silver flowing back to Europe. Gold was obtained in the New World and shipped back to Europe. The Spanish gold coin, the pistole, was one of the first gold coins minted for international trade.
The flow of precious metals from the New World to Europe slowed dramatically in the late 1600s. This reality was reflected in the slowing down of minting gold coins from that era. As other countries besides Spain explored the new land, the interest in gold coins shifted from Spain to those countries.
Great Britain introduced a gold coin in 1817. Before that, the Ducat was immensely popular. Both had high gold content.
The Rest Of The World
Gold coins have held positions of prominence in just about every nation. In some cases, however, the striking of a gold coin came fairly late. China, for example, did not strike a gold coin until the 19th century. Russia produced over 50 million gold coins between 1825 and 1855. The Ottomans had a gold coin that came earlier, in 1478.
India started producing gold, silver and bronze coins in the late 3rd century. The Indian government has embraced gold coinage and its circulation ever since.
The Role Of The Gold Standard
One aspect of modern financing that has influenced the value of a gold coin was the abandoning of the gold standard. By moving to a fiat money system, gold retained its value as a rare resource and became a hedge precious metal for use in bad economic times.
The US migration from the gold standard for its currency led to Executive Order 6102, the confiscation of gold by the government and the prohibition of hoarding gold by the citizenry. While only one person was prosecuted for hoarding gold and his conviction was overturned on appeal, gold coins were not produced by the USA until 2005.
Gold Coins Today
A gold coin as usable legal tender still exists, but is antiquated. In most cases, someone trying to pay for a product using a gold coin that was legal tender would be overpaying for the product based on the value of the coin.
The absence of American gold coins from 1933 through 1984, plus the destruction of existing gold coins, moved the price of the average gold coin as a collectible up significantly. A person trying to pay for a soft drink with a $2.50 Liberty Head gold coin would be paying the equivalent of $1,000, at a minimum, for a soda worth $2.50.
Commemorative and bullion coins, however, have taken the place of legal tender gold coins. These have a higher than usual gold content because of their status as a collectible rather than legal tender that is potentially in use every day. In fact, the high gold content is one of the collectibles’ selling points. Their denomination is also different.
A Range Of Values
In 1849, for instance, the United States Bureau of the Mint struck a $1 gold piece. Today, that $1 gold piece is worth the face value plus the gold value plus the collectible value, which can range from several hundred dollars to over $1,000.
In 1985, the US government issued a one-troy ounce gold American Eagle coin and, in 2006, a one-troy ounce gold American Buffalo coin. The value of both is the weight in gold as gold is being sold on the open market. Its value as a currency is limited, however, because it is difficult to quantify for market purposes.
Gold coins minted in the last 40 years play a different role for the most part than coins minted in the 1700s, 1800s, or early 1900s. Gold coins today are minted and collected almost exclusively as an addition to a coin collection or as an investment.
As A Collectible
Gold coins minted now are still technically currency in that each is a coin minted by the US government, but they are generally treated as a collectible by purchasers. This puts the value of the coin beyond a specific monetary designation. Its value is almost entirely based on it being gold, its rareness, and the demand for the coin by the public.
For example, two of the most famous gold coins issued by the American government recently are the American Buffalo and the American Eagle. The Buffalo is one of the highest gold content coins ever minted by the US government. The eagle is a mix of gold and an alloy to help it retain hardness.
However, the Eagle outsells the Buffalo consistently. This is because the collectability of both is high, but collectors seem to have a sentimental attachment to the American Eagle.
As A Hedge
Another role gold coins play is as a hedge against bad economic times. In this case, gold coins are purchased and stockpiled by investors to use if the stock market collapses or economic chaos becomes the norm.
Why This Matters
Apart from the historical interest that drives many people to collect coins, understanding the dynamics of gold coins is important for the following reasons:
When buying gold coins, you should consider why you want to do so. Are you doing it because your collection needs it? Or are you looking at it as an investment? What you decide will help you formulate the buying strategy you need to employ.
As A Collectible
If collecting is your motivation, you will want to focus on the scarcity and aesthetics of any gold coin you purchase. It also makes purchasing the purest gold coin on the market a bit of overkill, which is good if you are collecting on a budget.
The reason you do not need to focus on the purity of a gold coin is because there are many fascinating gold coins that will enhance any collection on the market. You simply do not need to have the rarest or the purest.
Another reason is that collectible gold coins tend be valued separate from any bullion gold coin pricing issues. If gold plummets in value, for example, a collectible gold coin will still be worth more than face value because rarity and condition factor into price. That can make a significant difference if the gold market is volatile.
As An Investment
Primarily, gold bullion coins are used for investment, although they are also collectible in their own right. Gold coins bring a lot to the table in term of investment potential, including affordability, durability, portability and liquidity. They could also be used, in an emergency, as actual legal tender.
Gold coins are the clear winner when compared to a gold bar investment because:
As an investment, whether you go with gold bullion, legal tender coins, or both, gold coins have little downside.
What Is The Purest Gold Coin?
Canadian Maple Leaf
This coin is the standard when it comes to gold coins of the modern era. It is a gold bullion coin, meaning it is not for use as legal tender, except for the value of the gold in the coin. It is a rare one-ounce gold coin that was introduced over 40 years ago as a replacement coin for the exceptionally rare South African gold Krugerrand.
The Canadian Maple Leaf is traded internationally and is immensely popular with coin collectors. It has an amazing 99.99% gold purity, which makes it the purest gold coin on the market. Most people that purchase the Maple Leaf do so as a gold bullion investment.
A 2007 1-Million Dollar Gold Canadian Maple Leaf is one of the rarest in the world and one of the most expensive coins on the market. It has an estimated value of $4 million. This coin is 20 inches in diameter, over an inch thick, and comprises 220 pounds of 99.99% pure gold.
It was initially a promotional piece for the Canadian Mint’s Gold Maple Leaf bullion coins. Because of that, there are only 5 in existence. It is known as the world’s largest and purest gold bullion coin.
American Buffalo
This coin was presented in 2006. It was the US Mint’s response to the Canadian Maple Leaf. It is the purest gold coin produced by the United States government and it is the purest American gold coin that can be purchased on the open market.
Every Buffalo coin has an imprint of “1-oz .9999 Fine Gold,” indicating its purity and weight as one troy ounce. It is the purest American gold coin, but it is not the most popular. That would be the American Eagle gold coin. Routinely, the Eagle coin outsells the Buffalo coin, even though the Buffalo has a purer gold rating than the Eagle.
While no one can be sure why this is the case, coin collectors and dealers can make some educated guesses:
American Eagle
The American Eagle gold coin is the Unites State’s most popular. A 22-karat gold coin, the American Eagle is made of 5% copper, 3% silver and 92% gold. The copper and silver are included to give the coin durability.
The number of coins minted is based on sales. By law, the US Mint is required to produce enough Eagle (or any specialized bullion) coins to satisfy public demand. This has meant that hundreds of thousands of coins have been produced annually since 1986, the first year this version of the American Eagle was offered.
The American Eagle has a male eagle flying with an olive branch to a female eagle and her hatchlings. Lady Liberty is on the other side walking with an olive branch and carrying her torch. The artwork and design of the coin have gone through several updates, redesigns, and iterations over the years. Mid-2021 was the date of the last redesign.
South African Krugerrand
The Krugerrand is the first bullion coin. It is also one of the most popular gold coins ever. The Krugerrand is a 22-karat gold coin with 1 ounce of 99.99% gold and 1/11th ounce of copper.
The Krugerrand was released more than 70 years ago, and each coin is imprinted with a “FYNGOUD 1 oz Fine Gold” stamp. Sold internationally, the Krugerrand’s price is determined by the gold market’s current price for an ounce of gold.
Named after a combination of Paul Kruger, who was the South African President at the time, and the unit of currency of South Africa, the rand, the Krugerrand was banned from sales in the late 1970s and the 80s because of the South African practice of apartheid.
It was initially designed to be a “working man’s coin” and was thus made affordable for the average person. Its design also makes it legal tender and a 1-ounce Krugerrand has the face value of 1 rand. The Krugerrand was the world’s first coin not to feature a currency denomination on either side of the coin.
Austrian Philharmonic
This is another bullion coin, sold internationally and popular throughout Europe and the US. The largest size of the coin is 1-ounce with ¼ ounce 99.99% gold purity.
The Austrian Philharmonic is primarily an investment vessel. Additionally, it is sanctioned by the Austrian Mint and issued in euros (the only coin with that status). For several years in the late 1990s, the Philharmonic was the best-selling coin in the world.
Australian Kangaroo
The Australian Kangaroo comes in a 1-ounce size and is sold internationally. The first one was issued by the Perth Mint in 2011. Queen Elizabeth II is featured on one side of the coin and a red kangaroo is featured on the other. The Kangaroo has its design changed every year, which is rare. Additionally, the annual mint run is limited.
Both those facts serve to make the Australian Kangaroo more valuable than its weight in gold. These coins are also known as Australian Gold Nuggets.
Legal Tender Gold Coins In The USA
Gold coins minted in America as legal tender with the purpose of everyday use have varied over time. The gold content, as previously mentioned, however, is less than a bullion because a hardening agent is needed, as pure gold coins would become disfigured and eventually erode to nothing.
The first gold coins minted in America appeared in 1795 in the forms of a $2.50 Capped Bust, a $5 Liberty Head and a $10 Liberty Head. These remained as the gold coin currency of the nation until the mid-19th century. At that point, several new designs of coins and new coins were introduced and included:
Final Thoughts
The purest gold coins are Canadian Maple Leafs, American Buffalo and Eagle coins, and the South African Krugerrand. Most nations have produced gold coins at some point in their history, but the malleability of pure gold coins makes them impractical as legal, everyday use currency.