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# Gold Bullion: Coins

Gold used for investment purposes is manufactured in one of two forms: bullion bars or bullion coins. Most of the gold held by private investors around the world is in the form of coins because of their portability and liquidity; in other words, they can be easily converted into cash. Another reason why coins are the preferred vehicle for gold ownership is that the minted coin is a standardized measure of weight and purity, which can be relied on for current and future value assessment. Gold bullion coins are the most popular, most convenient, and safest way to physically invest in gold.

Generally, gold bullion coins present a very stable market for investors. They can be bought and sold virtually anywhere in the world. However, contrary to the common sight of people lusting after bars of gold on the silver screen, most real-world investors buy 1-ounce bullion coins. In addition to that standard measure, the majority of mints that manufacture gold coins also produce them in smaller denominations of ½-, ¼-, and 1/10 of an ounce.

The first modern-era legal tender bullion coin to achieve widespread popularity and use was the South African Krugerrand, which was introduced in 1970. The Canadian Maple Leaf debuted in 1979; it eventually surpassed the Krugerrand as the world's top seller, gaining a significant market share as a 1-ounce pure gold coin. Most of the top gold bullion coins contain one pure ounce of gold. Some, however, are alloyed. The Krugerrand contains one pure troy ounce, but overall is 0.9167 fine. Fineness is a measure of the weight of pure gold per 1,000 parts. So, a fineness of 0.9167 literally means that the coin is 91.67 percent pure gold. Fineness doesn't refer to the amount of pure gold within the coin (in a 1-ounce coin it will always be one troy ounce); it instead refers to the coin's overall purity. Some coins may therefore have a total weight of slightly more than one ounce.

In 1986, the U.S. Mint began producing the United States Eagle, which has become the most popular bullion coin among American investors. Like the Krugerrand, it's also 0.9167 fine. Austria's Philharmonic, introduced in 1989, along with the Maple Leaf weigh one ounce and are 0.9999 fine. As previously stated, the key factor to remember is that all four of these popular coins contain one ounce of pure gold (although some may weigh more than one ounce in total). As such, pricing can be readily compared. These four coins are the dominant players in the modern bullion coin market.

Most financial experts recommend that private investors avoid gold bars due to the complications that can arise when the time comes to sell. Most dealers will demand to see bullion bars before they buy them because of counterfeiting concerns. Some will not buy bars without an assay, which is a chemical analysis that determines the gold's purity (the owner of the gold is generally expected to pay for this process). In most cases, gold firms will not set a price until after the bars have been delivered to their location or depository for inspection. In the same manner, bullion bars can also present problems for those wanting to trade gold for merchandise, because the individual receiving the bullion has no way of knowing whether the bars are real or not. Because of these potential trade and exchange difficulties, investors are often counseled to forego bullion bars for the convenience and liquidity of gold coins.

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