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Gold Coinage: Everything You Should Know

22 November, 2022

22 November, 2022

One of the most loved and popular metals of all time, gold is nothing short of gorgeous and stunning.

 

Since its mysterious discovery around 7000 years ago, this metal has been used by various ancient civilisations across the globe. 

 

It has been used for multiple purposes like designing jewellery, decorative articles and money as well. Of all the uses that are still valid, one of gold’s uses that has become even more prominent is – currency.

 

Although most of us are aware of gold being used in commerce, we do not know all the how, what, when, and whys. So, let’s deep dive and get to know the complete story about the journey of gold coins.

 

First things first, when were gold coins made?

 

Around the 6th Century BC (almost 2000 years ago), gold coins were first produced in Lydia (present-day part of Western Turkey). Previously too, gold in different forms was used as a part of the trade, but it was during this time that it was designed into a recognisable shape of coins.

 

However, these coins weren’t made of pure gold but of electrum, a natural alloy of gold and silver found in rivers in Lydia.

 

However, Alexander the Great (around 330 BC) adopted and introduced the gold coinage system to the world at large.

 

Later, the Roman Empire also accepted coins, especially gold coins and used them for various trade and payment purposes.

 

Gold coins in the contemporary era

 

There were multiple attempts made to produce and establish the usage of gold coins by the Britishers. The first gold coin, a penny, was minted in 1257 by Henry III to provide a high-value coin.

 

But it wasn’t accepted in general, and hence, the gold coin was withdrawn in favour of silver ones.

 

Under the reign of King Edward III, a second attempt to introduce a gold coin named Florin in England was made.

 

But it was once again unsuccessful. Post this failure, another attempt was made in the same year to circulate gold coins.

 

This coin, known as the Gold Noble, became England’s first successfully gold coin introduction. It remained in circulation for the next almost hundred and twenty years in many different forms.

 

Gold coins continued to be in use right until the introduction of paper money. Even after this, various currencies still maintained a clear link with gold .i.e. paper money being exchanged for gold as per demand.

 

Unsurprisingly, gold has played a major role within the monetary system at an international level. 

 

Presently, even if gold coins aren’t used as a form of currency, they are definitely considered a prime investment product.

 

 Additionally, people also consider giving or buying gold coins as a gift on special occasions like birthdays, marriages, anniversaries.

 

Buying gold coins

 

Before deciding on whether to purchase gold coins or not, it is important to be mindful of certain factors as below.

 

2.      Purity: Karat and fineness are the two primary ways to assess the purity of gold coins. Karat is the measure of the total pure gold parts used within a product. Simply put, in a 22-karat gold coin, there are 22 parts of gold, and the rest 2 parts could be any other alloy.

 

On the other hand, fineness is defined as the gold weight in proportion to the total gold coin weight, including the impurities. The World Gold Council refers to the minimal amount of impurity within a pure gold coin that may not have been removed. So usually, a 24K gold coin is considered 99.9% pure, whereas a 22K coin is 92% pure.

 

2.      Hallmark: A hallmark is a certification given to gold coins and articles which signifies their purity. Gold is tested and assessed at official hallmarking centres.

Then as per the national and international purity and fineness standards specified for metal, it is certified or hallmarked. Generally, people opt for hallmarked gold, as the one without hallmarking can raise questions about purity.

 

3.      Packaging: Often, it is recommended that you see that the gold coin has tamper-resistant packing before buying it. Another suggestion is that do not open or in any way scratch the packaging if you plan on re-selling the gold coin at some point in future.

 

Also, ensure that you check the packaging of the gold coin at the time of purchase. This is because intact packaging is an assurance that the product hasn’t been tampered with in any way.

 

4.      Making Charges: Generally, it is believed that buying gold coins is cheaper as compared to jewellery. Wonder why? – well, it is because of making charges. The making charges on gold coins are on a lower side as compared to jewellery.

 

In addition to this, when you tend to resale gold (coins or ornaments), the next buyer will not cover the making cost. Hence, gold coins are considered to give better returns than any other gold product.

 

5.      Bill: When you shop for gold coins, make sure that you get a bill from the place about it. Also, see to it that the bill properly documents vital details like the karat, purity and price (per gram and total) of the gold coin's.

 

This bill acts as a proof of legality and purity and mentions the value of the purchase and as evidence of ownership.

 

6.      Ease of Selling: As opposed to gold ornaments, selling gold coins is an easier task. This is because hallmarked gold coins with untampered packaging and a proper bill can be resold without any issues.

 

Also, due to lesser making charges, there isn’t much loss incurred. Plus, gold has dynamic pricing and is sold as per the market price on that day. As a result, you may end up getting paid more than the amount you paid at the time of purchase.

 

And since there isn’t much in terms of intricate design or the presence of other metals, the overall process of selling gold coins is much faster.

  

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