It is believed that the first minted gold coins were introduced 2,700 years ago. Since that time, gold coins have been used, sometimes along with or sometimes to substitute for, other forms of currency. Gold coins have functioned as a medium of exchange, the usual purpose of currency; it has also served as a final store of value and a unit of account.

The Byzantine Empire had a gold-based monetary economy during its entire 1,100-year history. It issued gold coins containing approximately 4.5 grams of gold. These gold coins were known as the bezant and enjoyed free circulation both within and outside the territories of the empire for 645 years, from the time the Byzantine capital of Constantinople was established in 324 CE until 969 CE.

There are two broad classifications of precious metal coins, such as gold coins. These are gold bullion coins, and numismatic gold coins. Bullion coins are gold coins whose value is strictly related to their gold content. On the other hand, numismatic coins are gold coins whose worth is estimated as much on their condition as on their rarity or history.

A hybrid classification, to which the semi-numismatic gold coins belong, is also becoming popular among investors and collectors alike. Semi-numismatic gold coins are not as hard to come by as the true numismatic coins and their prices combine the value of their gold content plus a perceived value for rarity.

Gold Bullion Coins

Gold bullion coins are minted by governments, which guarantee the content of gold. These gold coins come in a wide variety of shapes and sizes. You will find that some are made from pure gold, while other gold coins are mixed with copper to act as a hardener. The American Eagle, Mexican Peso, Australian Kangaroo, Canadian Maple Leaf, and South African Kruggerand are the major gold bullion coins.

If you are an investor who would like to buy gold in small amounts, then bullion coins are the ideal investments for you. You can usually purchase gold coins weighing 1 troy ounce or more, but there are also gold coins in smaller denominations. Gold bullion coins are sometimes bought as a final store of value by those who fear the occurrence of worldwide disaster, since gold coins are easily carried and exchanged.

Numismatic Gold Coins

Numismatic coins are rare gold coins which are not traded based on the content of gold, but on their value as collector items. They are usually rare, but the price also includes the quality or condition of the coin and its demand (popularity) among coin collectors. For very rare numismatic gold coins, their bullion or gold content is a minor element in pricing.

Categorizing the condition of rare numismatic gold coins, called grading, can be a very complicated business because of the highly subjective process involved in estimating the value of gold coins. Grading gold coins is critical because there may be minute scratches almost invisible to the human eye which can reduce the price for gold coins by several hundreds of dollars.

Note, however, that since the grade of gold coins is based on the opinion of an expert, error or fraud may exist. You have to watch out for dishonest dealers who may downgrade gold coins when they are buying but overgrade the same gold coins if they are selling it, thus make more money.

If you are into collecting and investing numismatic gold coins, deal only with reputable dealers of gold coins. Such dealers will guarantee, without qualification, to return your money or exchange the gold coins if the experts’ grades are in conflict. Before you purchase numismatic gold coins, you should make sure to consult guidebooks on gold coins. Compare prices from at least three different dealers of gold coins so you have an idea of the reasonable cost of specific gold coins.