Gold coins keep strength of value over the millennia
Precious metal is one of the oldest stores of riches
Early this month, a hoard of gold coins was discovered in the Netherlands, buried around 460BC – about the time the Roman Empire was about to be overrun by barbarians.
Archeologists believe the 42 coins were hidden to keep them safe – an easy guess, as gold has continually been used as portable value since the beginning of recorded history.
Gold coins are one of the oldest known stores of riches. It has been this way ever since humans began putting value on items of rarity. Around 1000BC, people living in the region stretching from the Middle East to India began fashioning medallions from the shiny yellow stuff they found in riverbed mud.
Today, gold coins are sought by investors and collectors alike.
Apart from the Krugerrand that is produced by the South African mint, the United States, Canada and the United Kingdom are among the most prolific issuers of gold coins.
One of the most successful is the 1 ounce Buffalo coin fashioned by the US mint in 2006. Almost 250,000 have been sold, according to Numismatic News. Like many coins in circulation, its price is tied to the value of gold itself and the Buffalo is currently trading in the US$1,600 range.
Not all coins are investment grade but they remain popular purely for their artwork and novelty. A 1915 Austrian gold ducat can be snatched up on eBay for under $200, for instance.
Given the allure of gold, fraud is a huge risk for the unwary. So much so that the attorney general of Texas, Ken Paxton, recently issued an alert warning buyers not to respond to cold-callers offering them “deals” on coins.
“If coins you bought as an investment would have to double or triple in value before any gain could be realised, you may have been a victim of fraud,” Mr Paxton said.
Buyers should always do research to pick reputable dealers. Investment grade coins are sold at a price linked to the spot price of gold. Dealers make their money off the trade through the “spread” – adding a few points to the price to a buyer, or removing a few points relative to the price of gold for a seller.
Most gold coins are not 100 per cent pure. Copper usually makes up 2 to 3 per cent of its weight to harden the coins and help make them scratch resistant.
Europeans are among the most enthusiastic buyers of coins but, as with many economic trends, it is the Chinese who are shaking things up. The World Gold Council says demand for gold coins and bars in China grew by 30 per cent in the first quarter of this year. More than 105 tonnes of the metal in total made its way to China in the same period. And Bloomberg reports that China is on track to import 1,000 tonnes of gold this year, up by 55 per cent from the 647 tonnes imported in 2016. It seems the pulling power of gold has not lost any of its strength.
A hoard of 42 gold coins was found in the Netherlands earlier this month, dating back to 460BC.