Gold and Gold Coins
Gold is
a chemical element with the symbol Au (from the Latin aurum, meaning shining
dawn) and atomic number 79. It is a highly sought-after precious metal which
for many centuries has been used as money, a store of value and in jewelry. The
metal occurs as nuggets or grains in rocks, underground "veins" and
in alluvial deposits. It is one of the coinage metals. Gold is dense, soft,
shiny and the most malleable and ductile of the known metals. Pure gold has a
bright yellow color traditionally considered attractive.
Gold
formed the basis for the gold standard used before the fiat currency monetary
system was employed by the International Monetary Fund (IMF) and the Bank for
International Settlements (BIS). It is specifically against IMF regulations to
base any currency against gold for all IMF member states. The ISO currency code
of gold bullion is XAU.
Gold is
the most malleable and ductile metal; a single gram can be beaten into a sheet
of one square meter, or an ounce into 300 square feet. Gold leaf can be beaten
thin enough to become translucent. The transmitted light appears greenish blue,
because gold strongly reflects yellow and red. Gold readily forms alloys with
many other metals. These alloys can be produced to increase the hardness or to
create exotic colors. Native gold contains usually eight to ten percent silver,
but often much more - alloys with a silver content over 20% are called
electrum. As the amount of silver increases, the color becomes whiter and the
specific gravity becomes lower.
Gold is
a good conductor of heat and electricity, and is not affected by air and most
reagents. Heat, moisture, oxygen, and most corrosive agents have very little
chemical effect on gold, making it well-suited for use in coins and jewelry.
In
various countries, gold is used as a standard for monetary exchange, in coinage
and in jewelry. Pure gold is too soft for ordinary use and is typically hardened
by alloying with copper or other base metals. The gold content of gold alloys
is measured in carats (k), pure gold being designated as 24k. Gold coins
intended for circulation from 1526 into the 1930s were typically a standard 22k
alloy called crown gold, for hardness. Modern collector/investment bullion coins
are typically 24k, although the American Gold Eagle and British gold sovereign
continue to be made at 22k, on historical tradition.
The Canadian
Gold Maple Leaf coin contains the highest purity gold of any popular bullion
coin, at 99.999% (.99999 fine). Several other 99.99% pure gold coins are
currently available, including Australia's Gold Kangaroos (first appearing in
1986 as the Australian Gold Nugget, with the kangaroo theme appearing in 1989),
the several coins of the Australian Lunar Calendar series, and the Austrian
Philharmonic. In 2006, the U.S. Mint began production of the American Buffalo
gold bullion coin also at 99.99% purity.
Gold
coins are one of the oldest forms of money. The first gold coins in history
were coined by the Lydian king Croesus in about 560 BC, not long after the
first silver coins were minted by king Pheidon of Argos in about 700 BC. 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.
Many factors
determine the value of a gold coin, such as its rarity, age, condition and the
number originally minted. In July 2002, a very rare $20 1933 Double Eagle gold
coin sold for a record $7,590,020 at Sotheby's, making it by far the most
valuable coin ever sold to date. In early 1933, more than 445,000 Double Eagle
coins had been struck by the U.S. Mint, but most of these were surrendered and
melted down following Executive Order 6102. Only a few coins managed to
survive.
In 2007
the Canadian Mint produced a 100 kg gold coin with a face value of $1,000,000,
though the gold content was worth over $2 million at the time. It measures 50
cm in diameter and is 3 cm thick. It was intended as a one-off to promote a new
line of Canadian Gold Maple Leaf coins, but after several interested buyers
came forward the mint announced it would manufacture them as ordered and sell
them for between $2.5 million and $3 million. As of May 3 2007 there were five
confirmed orders. Austria had previously produced a 37 cm diameter 31 kg
gold coin worth €100,000 ($153,000).
In
October 4, 2007, David Albanese (president of Albanese Rare Coins) stated that
a $10 - 1804-dated Eagle coin (made for President Andrew Jackson as a
diplomatic gift) was sold to an anonymous private collector for $5 million.
Today
gold coins are primarily collected for numismatic value as collectors items,
gold bullion coins today derive their value from the metal (gold) content - and
as such are viewed by investors as a "hedge" against inflation or a
store of value. 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) bullion gold coin.
Bullion coins are also produced in fractions of an ounce - typically half
ounce, quarter ounce, and one-tenth ounce.
{Information extracted from Wikipedia articles on Gold and Gold Coins .}
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