gold coins

Rosland Capital at Abu Dhabi Grand Prix

What’s the Difference Between Bullion and Numismatic Coins?

Is there a difference between bullion coins and numismatic coins? Yes, and when you’re in the market for coins, it’s important to know what you’re looking for and why you’re looking for it. Bullion coins and numismatic coins are different types of coins that are valued differently and for different reasons.

Regardless of the coin collecting you’re doing, you have to consider things like intrinsic value, melt value, bullion value, and whether you’re buying gold or you’re a coin collector after rare coins for their numismatic value. 

For some coins, you may be more interested in mintage and coin grading from grading services such as NGC and PCGS than in the price of gold or market value of silver bullion coins.

But there’s still some overlap, especially when considering well-known eagle coins like gold eagles that are minted from physical gold planchets, or silver eagles that have high silver content, which are impacted by precious metals prices as well as their mintage and collectible value. This can leave you asking, “How much is a gold coin?” The answer is: it depends on what kind of gold coin you mean. So, before you commit to working with any coin dealers, let’s explore the differences and the similarities, and what that may mean for you.

What is bullion?

What does the word “bullion” make you think of? Do you imagine the huge rectangular gold bullion bars stacked like bricks in a vault at Fort Knox? You’re not wrong. But that’s only part of the picture. Bullion coins are minted using those same highly refined precious metals such as silver, gold, platinum, and palladium. 

As Rosland Capital’s Precious Metals & Coins Glossary (by kind permission of Lorenz Books, publishers of one of our favorite books, The World Encyclopedia of Coins, written by Dr. James Mackay) succinctly states: “Bullion is precious metal whose value is reckoned solely by its weight and fineness.”

Regardless of the shape or size, bullion is all about the purity of the metal itself. Precious metal purity is graded according to millesimal fineness, or parts per thousand, and the standard varies by metal. For example, an assayer certifies the grade of fine silver only for silver bullion with a millesimal fineness of 999, or 999 parts per thousand. This translates to 99.9% pure silver. The same purity standard holds for gold bullion. This level of purity is called 24-karat gold, though that term is most commonly used with jewelry.

According to London Bullion Market Association (LBMA) purity standards for Good Delivery, platinum and palladium bullion must meet the minimum requirement of 99.95% pure platinum or palladium. Although we know that gold is mined along with other precious metals such as platinum to be used in jewelry, electronics, and sustainable energy industries, coins remain one of the most popular forms and uses. All these precious metals are available as bullion coins. Which brings us to our main question.

What’s the difference between bullion coins, numismatic coins, and semi-numismatic coins?

What are bullion coins?

Again, to quote the Glossary, a bullion coin is a coin struck in precious metal, now usually with an inscription giving its weight and fineness, whose value fluctuates according to the market price of the metal.

Some of the most popular bullion coins include ones minted in the U.S., Canada, South Africa, Austria, and the United Kingdom:

It is worth noting that different bullion coins can have different metal content. For example, the American Buffalo is 99.99 fine gold, while the American Eagle is 91.67% pure gold. The Eagle still contains 1 Troy oz of gold, because it weighs 33.931 grams, or around 1.09 Troy ounces.

As long as a bullion coin’s gold content and weight are known, and the issuing authority—in this case the US Mint—is trusted, these variances are of no import.

Although bullion coins are not now meant for use as currency, they are issued by a sovereign nation, have a legal tender value and could theoretically be used for purchases. The fact that the legal tender value is a small fraction of the metal content’s worth discourages that sort of activity.

You may also come across “rounds” that have the same metal content as a bullion coin of the same weight, but these are not legal tender coins whose production is authorized by a sovereign government.

While bullion coins can be seen to have a functional, transactional purpose, they are not immune to the tides of fashion. Before the US Buffalo coin was introduced, the Canadian Gold Maple Leaf, promoted as ’24-karat,’ was a particularly popular purchase. The arrival of the Buffalo, with its nostalgic use of the Buffalo Nickel design, and its homage to the incuse lettering of the $2.5 and $5 Indian Head coins, created a new favorite.

What are numismatic coins?

What does numismatic mean? 

Let’s check with our Glossary again. It says: “Numismatics (from Latin numisma, coin) is the study and collection of paper money, coins and medals.”

According to the American Numismatic Association (ANA), numismatists study money in any of its forms, often focusing on certain areas of numismatics, such as coins, tokens, or paper currency. For our purposes here, numismatics relates to coins. This often involves an interest in coins as currency, as part of human histories, cultures, and societies. 

Numismatic coins are essentially coins that are no longer in production, are in limited supply and, in the case of US coins, were minted before 1933. They were usually minted as bullion for use as currency and as a medium of exchange. They only acquired their ‘numismatic’ status later, once they became part of history.

One example would be the beautiful $2.5 and $5 Indian Head coins first issued in 1908. These have a recessed, or “incuse” design, and were initially not popular—people thought germs might hide in the crevices—but now they are beloved collectors’ items.

Coin buyers also seek coins minted up to present day, especially limited or special editions, sets such as the U.S. quarters featuring the fifty states, and the now-rare first euros released by each state that joined the European Union prior to standardizing the currency across nations. The scarcity of coins stamped with errors will always be a source of attraction and fascination for numismatists.

That’s not to say that value is unimportant. On the contrary, the value of numismatic and semi-numismatic coins can sometimes greatly exceed that of bullion coins with the same metal content. One difference between bullion coins and numismatic coins is what gives each its value. As we’ve seen, bullion coins are valued for their precious metal content and weight, whereas numismatic coin values also derive from factors such as rarity, historical context and importance, condition, and current demand for a particular coin.

The most valuable numismatic and semi-numismatic coins are worth far more than the spot price for their inherent metal value. One of the most famous numismatic coins is the United States $20 double eagle gold coin. This U.S. gold coin was the result of a collaboration between President Theodore Roosevelt and American sculptor Augustus Saint-Gaudens. While visiting the Smithsonian and seeing the ancient Greek coins bearing the image of Alexander the Great, Roosevelt had the idea to reinvent American coinage, introducing a higher caliber of artistic quality. Mission accomplished.

What are semi-numismatic coins?

While “numismatic coins” can be defined as older coins that are no longer made, semi-numismatic coins can still be in production. Along with “First Strikes”, semi-numismatic coins can include proof coins, which are specially minted coins produced in limited runs by some of the most popular mints and precious metals brands. These coins are usually double or triple struck and placed into protective casings without being touched by human hands or placed into circulation, leaving them in “mint condition” without scratch or blemish. 

Proof coins will have a highly polished mirror background, with their design rendered in frosted finishes, giving a cameo-like appearance – they are visibly different and often much more appealing than their mass-produced bullion cousins.

These uncirculated, collectible coins are often of the same metal content as bullion coins while also being relatively rare and unusual, and they draw value from both of these aspects. 

For example, the American Eagle Gold Proof, produced in limited quantities by the US Mint, is a popular item with coin enthusiasts, while the “Uncirculated” version of the same coin is minted in much larger quantities, and would be described as a bullion coin.

In general, semi-numismatic coins can add unexpected character and value to your portfolio. They are also available in a greater variety of sizes compared to coins designed for circulation.

Is it better to buy bullion coins or numismatic coins?

There’s no one answer to that question—it depends on your goals. Whatever you choose, it often makes sense to diversify your holdings and help solidify your portfolio. If you’re thinking about buying precious metals, whether gold, silver, or others contact our precious metals specialists at Rosland Capital.

How is Gold Mined? 3 Ways to Find Gold

What do you imagine when you think of how gold is mined? Maybe you see a prospector panning for gold in a river or a miner with a pickaxe during the California gold rush. Or perhaps you think of current TV shows following the companies that are open-pit mining in the wilderness of Alaska, who are probably excavating, hauling, crushing, and processing gold ore as you read this. 

1. Placer Mining

Placer mining is done in areas where the soil or rock is loose. These areas called placer deposits are often found on beaches and riverbeds. The most common and effective gold mining methods in placer deposits use tools and machines to move and sift through the sediment. The much denser gold settles and remains as the lighter sand, soil, and rocks separate and get washed away.

Dredging

Sometimes the gold deposits sit in deeper water, inaccessible by simply wading into the river. Dredging uses machines to remove sediment and soil from a live riverbed. Sometimes this process involves digging with a machine from above the water’s surface. Occasionally, large hoses are used to suck both water and soil away from the riverbed, depositing it into a machine for processing. 

Suction dredging usually requires a miner to dive down to the riverbed and operate a suction hose that carries sediment up to a sluice box on a floating platform. Gold dredging has been practiced since the early 1900s, when steam and electricity made it possible to build machines capable of handling large amounts of material. In the United States, using a gold dredge requires a license and is heavily regulated in areas where this method is common, including states like Alaska, Montana, and California. Suction dredging for gold remains a common practice in South America, Asia, and Africa.

Panning 

Probably one of the oldest methods associated with gold mining is panning. Panning is widely recognized as one of the simplest and cleanest ways to extract gold from a placer deposit. In this gold mining process, the miner uses a large pan to scoop up soil and then slowly swirls or shakes the pan underwater to sweep away loose and light sediment, leaving the heavier gold material in the pan. Due to the simplicity and effectiveness,  it remains a favorite method among those prospectors who don’t need to move metric tons of earth to strike gold. 

Sluicing

Water is an incredibly useful tool for separating gold from waste rock. Sluicing takes advantage of water’s power to move a large amount of material efficiently. This is especially useful when separating gold from soil and gravel. Ultimately, sluicing uses a channel-like box to recreate the effect of a river. The sluice is placed in the river to keep water moving through it, pushing sediment along and separating materials as it goes. The bottom of the channel has fins or ridges that trap the heavier gold material that settles as the moving water carries the unwanted sediment tailings away. 

A method similar to the sluice box is the rocker box. Using a rocker box is preferable in areas with less water available. It uses the same effect of separating soil and sand from gold and capturing gold fragments in the ripples at the bottom of the box. Instead of using the river’s natural movement, a rocker box (also called a cradle) is rocked back and forth to create the movement needed to separate the good stuff from all the rest.

2. Hard Rock Mining

Sometimes the ground is too hard to scoop up with a pan, a shovel, or even a digging machine with steel carbide teeth. In this instance, you need tools that can process thousands of tons of rock to get to the gold. Typically, larger gold mining operations have the resources to extract gold that would otherwise be impossible for smaller outfits to reach. But before they begin mining, they have to do some exploration to find lode deposits.

This kind of gold mining exploration, known as hard rock mining, requires the expertise of teams that often include geologists, geographers, chemists, engineers, and more. Among these disciplines, core samples are drilled, local geography is surveyed, and many other factors are taken into account when deciding the viability of developing a gold mine in a particular place. 

How scarce and disbursed is the gold likely to be in an area under consideration for hard rock mining? Less than 0.1% of potential mining sites ever develop into fully functional and productive mines. However, if a mining operation has the tools available to get to the gold, a smaller amount of gold per ton is worthwhile to extract. 

Open Pit and Underground Mining

Open pit mining is what most people picture when they think of gold mining. Huge digging machines, earth movers, massive motorized sluicers, and enormous pits carved into the earth give you a good idea of what open pit mining is all about. This is what you see at the famous Fimiston Open Pit, aka the Super Pit gold mine, in Western Australia.

When the ground happens to be exceptionally hard, dense rock like granite, miners drill holes and place explosives in them to break apart the rock for hauling and processing. This is used with underground mining as well. When the lode deposits are far enough below the earth’s surface, mine shafts are created to give miners access to the veins of gold. The material is sent to the surface for processing and the tailings and the waste rock are placed out of the way. 

3. Byproduct Mining

It’s not often you hear about gold being the secondary metal sought out by a mining operation. But, as the name suggests, byproduct mining means that gold happens to have come along with another material that is mined, such as copper and other metals, and sometimes even gravel. Gold is mined as a byproduct from mines in Utah as well as the mine in Papua, Indonesia, which primarily mines copper. 

Processing Gold Ore

With a greater understanding of chemistry came alternative methods for extracting gold from gold ore. Rather than dredging, sluicing, blasting, crushing, and separating the gold manually and mechanically, it can be done chemically. The two most common methods of chemically processing gold ore have used a sodium cyanide solution or an older, now-obsolete method involving mercury. However, traditional mechanical methods remain the most commonly used.

The good news is that many precious metals are increasingly used in sustainable energy solutions, so the benefits of mining and processing gold go beyond their aesthetic appeal to more practical applications to improve both environment and economy.

Knowing more about the ways that gold is mined has hopefully grown your appreciation for what goes into getting this precious metal out of the earth and into the gorgeous gold coins and bullion bars we all enjoy.

Learn how to buy gold with Rosland Capital at BuyGold101.com.

Photograph of a pile of gold bars.

Five Tips For Buying Gold

Whether you’re a first-time buyer or an experienced precious metals shopper, the decision to purchase gold takes a great deal of careful consideration. If you don’t go into making your purchase with the right preparation, you could run the risk of ending up with products that aren’t the right fit for you, or worse, being taken advantage of by less legitimate vendors.

To help put your mind at ease, here are five tips for success when buying gold from a precious metals firm:

1. Have A Clear Goal in Mind: Why Buy Gold?

While gold undeniably holds value no matter its purpose, it’s a serious purchase that shouldn’t be made without some serious thought. The decision to include gold and other precious metals in your asset portfolio is one with long-term impacts, and it can be wise to determine the root of your interest in buying gold well before entering a transaction.

Before making your purchase, ask yourself: why are you buying gold in the first place? Is it to own a thing of beauty that you can show off to the world? Or are you purchasing precious metals to help protect your financial assets? The more confident you feel in your reasoning regarding gold, the easier it will be to commit to the idea and follow through on it.

2. Know What Type of Gold Would Best Suit Your Needs

Once you decide to purchase gold, it can be helpful to familiarize yourself with what your options are as far as the types of gold you have to choose from.

With Rosland Capital, for example, you can purchase gold bullion coins, gold numismatic coins (what’s the difference?), and gold bullion bars. With other vendors, consumers could also consider purchasing gold mining stocks, gold ETFs, or gold jewelry. All of these options hold potential value for those interested in buying gold, but it can be helpful to assess which gold products or assets would be the most beneficial in helping you achieve your personal goals.

3. Learn What You Can About The Gold Market

For those unfamiliar with how it works, the gold market and its price fluctuations can seem very confusing. In order to enter into your transaction feeling well-informed, it can be useful to conduct research into the factors that typically trigger gold’s movements on the market and, consequently, when the best time to buy gold would potentially be based on those movements. Seeking out resources like a gold price historical chart can also be helpful in order to gain a more comprehensive understanding of gold’s relative maintenance of market value over the years.

4. Research Reputable Precious Metals Firms

With a purchase as significant as physical gold, it’s natural to want to avoid getting scammed. To find a legitimate business to work with, make sure to perform thorough research in order to properly evaluate whether entering a transaction with a particular firm will successfully deliver the gold products you seek and provide you with an excellent customer service experience.

Reputable businesses in the precious metals industry will typically be able to demonstrate their legitimacy through accreditations from trusted organizations, like an A+ rating from the Better Business Bureau or a AAA rating from the Business Consumer Alliance. These firms will also typically be able to showcase positive reviews from their satisfied customers in order to further reassure potential new buyers that they aren’t about to be scammed or ripped off.

5. Discuss Your Concerns with a Precious Metals Expert

If you’ve done all of the above steps and still have concerns about purchasing gold, seek out a precious metals expert with the knowledge and experience to address your questions and help you feel more confident in your decision. Firms like Rosland Capital have experienced specialists who can assist potential buyers in safeguarding their wealth and determining their next steps toward acquiring gold.For more information and advice on buying gold, visit Rosland Capital’s “How To Buy Gold” page on our main website as well as our supplementary educational site, Buy Gold 101.