Many people and organizations own tangible assets like precious metals to help diversify their portfolios. More and more investors are choosing to acquire and hold physical precious metals, rather than exchange-traded funds (ETFs, also known as “paper gold”) or mining stocks. Owning the physical metal is the only way to truly retain title of the asset itself, rather than through some sort of derivative or equity that tracks the value of the metal, but may also be affected by other variables.
The Texas Bullion Depository was created to offer a secure solution for the storage of high value precious metal assets, like gold, silver, platinum and palladium, with gold representing the most valuable of the metal types.
Gold bars are typically manufactured by private refineries, and on occasion by government mints, and follow rigorous production and testing standards to ensure the stated specifications of weight and purity are precisely met.
Gold bars used for investment and wealth preservation are typically refined to a purity of 24 karat, or .9999 pure. Sizes generally range from 1 gram (weight of a single raisin or paperclip) to 1 kilo (32.15 Troy oz – about the size of a standard smartphone).
Larger bars do exist, and are generally restricted to institutional or governmental use. Bars containing 100 or 400 Troy ounces are called “Good Delivery Bars” and are made by relatively few refiners that have been certified to produce them for official trades on the Commodities Exchange (COMEX). These refiners are members of the London Bullion Market Association (LBMA).
The 400 Troy ounce bars are often used by world banks and can be used to settle debts between sovereign countries.
Gold coins can be minted by private refineries and by government mints. When produced by a private entity, they are known as “rounds” and do not have a face value, so they do not serve as actual “coinage” with legal tender status. When minted by official government mints, they frequently do have a face value and are considered legal tender in their country of origin. The face value is largely ceremonial and is nearly always much less than the value of the metal content contained in the coin.
The United States Mint is a division of the United States Department of the Treasury. It produces a wide range of coins made for general circulation, as well as proof coins to meet the demand of precious metals buyers.
The two most common gold coins currently made by the U.S. Mint are the Gold American Eagle and the Gold American Buffalo. The Gold American Eagle is minted in 4 sizes each year (1/10 oz, ¼ oz, ½ oz and 1 Troy oz). The face values are $5, $10, $25 and $50, respectively. The Gold American Eagles are all 22 karat coins, meaning they contain some additional alloys in addition to gold; however, each Gold American Eagle coin is manufactured with the specific amount of gold relative to its size. For example, the 1/2 oz Gold American Eagle has 1/2 Troy ounce of gold in the coin, but it also contains some additional metals to make it harder. This is why a Gold American Eagle coin will weigh slightly more than its declared weight if measured on a very sensitive scale. In the case of the $50 Gold American Eagle coin, which carries a weight of 1 Troy ounce, its actual weight on a scale would register 1.0909 Troy ounces. The Gold Buffalo, however, is made from pure gold and weighs exactly 1 Troy ounce. With a face value of $50, it is a pure 24 karat gold coin (9999 fine).
Coins from other world mints are widely available and represent another option for gold investors. The South African Mint makes the Gold Krugerrand. It is a 22 karat coin named after Paul Krug, the first president of that country. It features a portrait of President Krug on one side and a springbok antelope on the other side of the coin.
The official gold bullion coin from the Royal Canadian Mint is the Maple Leaf. It is a 24 karat coin and is available in multiple sizes. The front features a portrait of Queen Elizabeth II, while the reverse shows an iconic Canadian maple leaf. The Perth Mint in Australia is a major producer of gold coins, with a wide range of coins issued each year. The flagship coin is the Gold Kangaroo. It is 24 karat and has a face value of 100 Australian Dollars. It pictures Queen Elizabeth II on the front and a kangaroo on the back. The position of the kangaroo on the coin changes each year.
A popular gold coin from the European continent is the Philharmonic. It is a .9999 fine 1 Troy ounce coin from the Austrian Mint. Its design features instruments from the Vienna Philharmonic Orchestra. The face value is 100 Euros.