A gold coin is a coin that is made mostly or entirely of gold.

Most gold coins minted since

1800 are 90–92% gold (22 karat), while most of today's gold bullion coins are pure gold, such
as the Britannia, Canadian Maple Leaf, and American Buffalo. Alloyed gold coins, like
the American Gold Eagle and South African Krugerrand, are typically 91.7% gold by weight,
with the remainder being silver and copper.

Traditionally (up to about the 1930s), gold coins have been circulation coins, including coin-
like bracteates and dinars.[clarification needed][the link does not explain what a "coin-like" dinar is] Since
recent decades, however, gold coins are mainly produced as bullion coins to investors and
as commemorative coins to collectors. While modern gold coins are also legal tender, they are
not observed in everyday financial transactions, as the metal value normally exceeds
the nominal value. For example, the American Gold Eagle, given a denomination of 50 USD,
has a metal value of more than $1,300 USD.
The gold reserves of central banks are dominated by gold bars, but gold coins may
occasionally contribute.

Gold has been used as money for many reasons. It is fungible, with a low spread between the
prices to buy and sell. Gold is also easily transportable, as it has a high value-to-weight ratio,
compared to other commodities, such as silver. Gold can be re-coined, divided into smaller
units, or re-melted into larger units such as gold bars, without destroying its metal value.
The density of gold is higher than most other metals, making it difficult to pass counterfeits.
Additionally, gold is extremely unreactive, hence it does not tarnish or corrode over time.

Modern history[edit]
The German gold mark was introduced in 1873 in the German Empire, replacing the various
local Gulden coins of the Holy Roman Empire.

Gold coins then had a very long period as a primary form of money, only falling into disuse in
the early 20th century. Most of the world stopped making gold coins as currency by 1933, as
countries switched from the gold standard due to hoarding during the worldwide economic
crisis of the Great Depression. In the United States, 1933's Executive Order 6102 forbade the
hoarding of gold and was followed by a devaluation of the dollar relative to gold, although the
United States did not completely uncouple the dollar from the value of gold until 1971. [citation
needed]

Gold-colored coins have made a comeback in many currencies. However, "gold coin" (in
numismatic terminology) always refers to a coin that is (more or less) made of gold, and does
not include coins made of manganese brass or other alloys. Furthermore, many countries
continue to make legal tender gold coins, but these are primarily meant for collectors and
investment purposes and are not meant for circulation.

Bullion coins[edit]
Further information: Bullion coin

Precious metals in bulk form are known as bullion, and are traded on commodity markets.
Bullion metals may be cast into ingots, or minted into coins. The defining attribute of bullion is
that it is valued by its mass and purity rather than by a face value as money. While obsolete
gold coins are primarily collected for their numismatic value, gold bullion coins today derive
their value from the metal (gold) content – and as such are viewed by some investors as a
"hedge" against inflation or a store of value. Many nations mint bullion coins. According to
British HM Revenue & Customs investment coins are generally coins that have been minted
after 1800, have a purity of not less than 900 thousandths, or have been legal tender in its
country of origin.[5] Although nominally issued as legal tender, these coins' face value as
currency is far below that of their value as bullion.
The European Commission publishes annually a list of gold coins which must be treated as
investment gold coins in all EU Member States. The list has legal force and supplements the
law. In the United Kingdom, HM Revenue and Customs have added an additional list of gold
coins alongside the European Commission list. These are gold coins that HM Revenue &
Customs recognise as falling within the exemption for investment gold coins. This second list
does not have legal force.[5]
South Africa introduced the Krugerrand in 1967 to cater to this market; this was the reason for
its convenient and memorable gold content – exactly one troy ounce. It was the first modern,
low-premium (i.e. priced only slightly above the bullion value of the gold) gold bullion coin.
Bullion coins are also produced in fractions of an ounce – typically half ounce, quarter ounce,
and one-tenth ounce. Bullion coins sometimes carry a face value as legal tender. The face
value is minted on the coin, and it is done so in order to bestow legal tender status on a coin,
which generally makes it easier to import or export across national borders, as well as subject
to laws against counterfeiting. However, their real value is measured as dictated by their troy
weight, the current market price of the precious metal contained, and the prevailing premium
that market wishes to pay for those particular bullion coins. The face value is always
significantly less than the bullion value of the coin. Legal tender bullion coins are a separate
entity to bullion gold. One enjoys legal tender status, the latter is merely a raw commodity.
Gold has an international currency code of XAU under ISO 4217. ISO 4217 includes codes not
only for currencies, but also for precious metals (gold, silver, palladium and platinum; by
definition expressed per one troy ounce.

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 (such as the Chinese Panda coins)
have variations each year, and in most cases each coin is dated. A 1/10 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 largest legal tender gold coin ever produced was unveiled in 2012 by the Perth Mint in
Western Australia. Known as the "1 Tonne Gold Kangaroo Coin" and with a face value of one
million dollars, it contains one metric tonne of 9999 pure gold, and is approximately 80 cm in
diameter by 12 cm thick.[6]

Fineness[edit]
Further information: Crown gold, Karat (purity), and Millesimal fineness

Circulating gold coins were usually made of an alloy as other metals are mixed into the coin to
make it more durable. Fineness is the actual gold content in a coin or bar and expressed as a
"per mil", or thousandths. For example, a gold ingot identified as being .999 fine will be
999/1000 pure gold, with the other 1/1000 being impurities.

Karat weight (K or kt) is a traditional fraction-based system used to denote the fineness of
gold, with one karat being equal to 1/24 part of pure gold in an alloy. With the precision of
modern assaying techniques, however, the fineness of gold ingots and bullion is more likely to
appear as a decimal measurement. In this system, pure gold would be denoted as 1.000 fine.
However, since absolutely pure gold is very soft and therefore not suitable for coinage or
ingots, it is generally accepted worldwide that anything above .999 fine qualifies as 24K.
Below is a karat weight to fineness conversion chart.

Correlation between karats and fineness

•24 karats = .999 fine or above

•23 karats = .958 fine
•22 karats = .917 fine (the UK gold coin standard)
•21 karats = .875 fine
•20 karats = .833 fine
•18 karats = .750 fine
•16 karats = .667 fine
•14 karats = .583 fine
•10 karats = .417 fine
The fineness is often converted to a percent, as well. If a gold coin has a fineness of .900, that
is 90.0% pure gold. If a gold coin has a fineness of .850, then the gold coin is 85.0% pure.

Coins have varied greatly in fineness through history. Notable historical standards that were
closely adhered-to include the crown gold (22 karat) used in all English gold coins intended for
circulation from 1526 onward, and 0.900 fine (21.6 kt), the standard for all American
circulation-coins from 1837 onward.

Fineness is not the only way to value a gold coin; a great deal of value in collector coins
comes from condition and rarity.[7] To a far lesser extent, even the value of gold bullion
coins is influenced by their physical condition.

Grading coins[edit]
Main article: Coin grading

A coin's "grade" is a visual evaluation of the amount of wear on a coin. Coins with little wear
are graded higher and therefore assigned higher prices than those with a lot of wear.
However, low-grade, extremely rare coins can easily be more valuable than more widely
available, higher grade coins of common dates.

In the early years of coin collecting, three general terms were used to describe a coin's grade:

•Good – Where details were visible but circulation had worn the surface
•Fine – Features were less worn from circulation and a bit of the mint luster showed on the
surfaces
•Uncirculated – Details were sharp and there was a luster approaching the state of the coin at
the mint, prior to general circulation
As the collector market for coins grew rapidly in the late 19th century and early 20th century,
it became apparent that a more precise grading standard was needed. Some coins were
simply more fine than others, and some uncirculated coins showed more luster and far fewer
marks than others. Terms like "gem uncirculated" and "very fine" began to see use, as more
precise grading descriptions allowed for more precise pricing for the booming collector
market. In 1948, a well-known numismatist by the name of Dr. William Sheldon attempted to
standardized coin grading by proposing what is now known as the Sheldon Scale.

Sheldon's scale, included in his famous work Penny Whimsy, was originally devised
specifically for United States large cents, but it is now applied to all series. The scale runs
from 0 to 70, where 0 means that you can tell that it was once a coin while 70 means that it is
perfect. 60 is uncirculated, what the general public would consider perfect, with no wear
whatsoever. There is a direct mapping from this scale to the older descriptive terms, but they
are not always used in the same way.[8][9]
Below are the general characteristics that define different coin grades in the United States
system. When grading coins, any defect should be noted, such as bent, scratched, etc.
Cleaning or mutilations of any kind should be mentioned.[10]
•Basal or Poor - (PO1) A piece of metal that can be identified as a coin.
•Fair - (FR2) The type of coin can be identified, the date may or may not be visible.
•About Good - (AG3) The date can be read, but parts of the coin and legend are worn smooth.
•Good – (G4 and G6) Legends, designs and dates are visible but heavily worn.
•Very Good – (VG8 and VG10) Designs and date are clear but lacking details. The "full rim"
(the line around the edge of the coin where it was raised up) must be visible.
•Fine – (F12 and F15) All major details will be visible with the major details virtually complete.
In this case, "Fine" describes concerning the condition of the coin – not the purity as described
above.
•Very Fine – (VF20, VF25, VF30, and VF35) More details are visible with major details virtually
complete.
•Extremely Fine (XF or EF) – (EF40/XF40 and EF45/XF45) Light wear on the high points with
some mint luster present.
•Almost Uncirculated (AU) – (AU50, AU53, AU55, and AU58) Small trace of wear visible on the
highest points with at least half of the mint luster still present.
•Uncirculated (UNC) or Mint State – (MS60 through MS70 inclusive) No trace of wear with
some small nicks or marks present.
•Proof – (PR or PF; numerical designation typically between 40 and 70). Coins specially struck
for collectors. Usually mirror-like surface. Sand blast and matte proof in some series.
Mint State (MS) – (Mint state 60 – 70) "Uncirculated" and "Mint State" are terms that are many
times used interchangeably. MS 70 is considered a perfect coin. Extremely few regular issue
coins are considered MS-70 although it is common for new, modern bullion coins to be given a
grade of MS-70.

The grading standards are different in different countries. The main standards applied outside
the United States are presented in the following table.[11] Coin grading is not an exact
science. It is a subjective exercise and depends on the qualification and the experience of the
appraiser. Industry leaders were extremely concerned that without a standardized grading
system, the rare coin industry could face enormous problems. Therefore, on February 3, 1986,
the Professional Coin Grading Service (PCGS) was formed and in 1987 the Numismatic
Guaranty Corporation. Both associations have the same goal of grading coins. Other
prominent grading organizations are the American Numismatic Association Certification
Service (ANACS) and the Independent Coin Graders. The grading is usually done by three
independent appraisers. A grading finalizer assigns the final grade of the coin and thereafter
the coin is sonically sealed in a protective, inert plastic holder known as "slab". [7] Other
associations followed and are at present active.[12] This third-party appraisal of a coin's
physical condition, backed by a guarantee, and a national network of reputable coin dealers
provided an extremely reliable form of protection for rare coin consumers who could then
participate in the coin market with greater confidence.