Gold as an investment – Why investors today prefer gold coins and what role the gold standard still plays

ByDirk Wasserthal
Gold coins such as Krugerrands and various collector gold coins in capsules and cases, symbolic of gold as a means of payment and the historical gold standard.

Gold as an investment – Why investors today prefer gold coins and what role the gold standard still plays

Gold has been considered a stable form of store of value for centuries. While earlier currency systems were partly directly linked to gold, today gold is primarily used as a strategic asset class – as a complement to cash, securities and tangible assets. Gold coins in particular have established themselves as a practical and liquid form of investment.

This article explains the historical role gold played as a means of payment, why the gold standard no longer has a direct function in modern financial systems – and why investors today primarily focus on bullion coins .

Gold as a store of value – from means of payment to asset class

For many centuries, gold coins were used in everyday transactions. However, with industrialization and the introduction of modern banking and monetary systems, gold coins were gradually replaced by paper money. At the same time, a new function emerged: gold as an investment and security instrument .

Today, gold is no longer used as circulating money, but is bought primarily for three reasons:

  • Preservation of value over long periods

  • Protection against inflation and currency risks

  • Diversification within an asset portfolio

Physical gold – especially in the form of coins with high market acceptance – has established itself as the most flexible and liquid option.

What has remained of the gold standard – and what hasn’t

The historical gold standard directly tied national currencies to physical gold reserves. This system is a thing of the past; modern currencies are no longer backed by gold . Nevertheless, one key effect remains:

Gold continues to function as a trust-based real asset that exists independently of government debt, interest rate decisions, or monetary policy.

From an investment perspective, this means:

  • Gold is not an investment vehicle , but a building block for stability .

  • It is not held as a substitute currency, but as a strategic reserve .

  • Its benefits lie in crisis resistance, preservation of purchasing power and liquidity.

This gives gold a clearly defined role within modern wealth structures .

Why many investors prefer gold coins to bars

Both gold bars and gold coins are investment gold. In practice, many investors consciously choose coins – primarily due to the following factors:

Advantages of gold coins

  • high international recognition

  • Better market liquidity than large bars

  • Flexible divisibility (partial sale possible)

  • easy resale in trade and on the private market

  • Often a lower risk of counterfeiting with established series.

Typical denominations:

  • 1/10 oz – 1/4 oz – 1/2 oz – 1 oz

This allows value blocks to be structured according to requirements , without having to dissolve entire large positions.

Bullion coins vs. collector coins – two different markets

When it comes to gold coins, investors must distinguish between two categories:

1) Investment coins (bullion)

  • Price is based on the gold spot price + premium

  • Focus on liquidity and tradability

  • ideal for asset protection and portfolio hedging

Typical examples:

  • Krugerrand

  • Maple Leaf

  • Vienna Philharmonic Orchestra

  • Britannia

  • American Eagle

  • China Panda

2) Collector and Proof Coins

  • Additional value drivers:

    • Circulation

    • Conservation status

    • demand

    • Numismatics

  • Price is not solely determined by the value of the metal.

These coins are valuable , however, they follow
a numismatic market mechanism and are therefore not a pure gold investment substitute.

Both worlds can complement each other effectively – but they fulfill different investment goals .

Liquidity, spread and markup – what investors should really consider

Three factors play a central role in the selection of gold coins:

  • Spread – Difference between buying and selling price

  • Surcharge on the spot price – depending on the denomination and demand

  • Market liquidity – how quickly and under what conditions can it be sold?

Basic principle in practice:

  • Larger units = lower surcharge per gram

  • Smaller units = greater flexibility when reselling

The optimal structure results from the investment objective, time horizon, and liquidity requirements.

How much gold makes sense in a portfolio?

There is no universal rule. In many investment strategies, gold typically trades within the range of:

  • 5 to 15 percent of total assets

Not as speculation – but as
strategic anchor of stability .

More important than the quantity, however, is:

  • sensible division logic

  • reliable source of supply

  • proper storage

Storage and original condition – a quality aspect for investors

For optimal value retention, the following is recommended:

  • Leave coins in their original capsules

  • Do not touch with bare hands

  • Avoid mechanical damage

  • Buy only from reputable specialist retailers

The condition of a coin, especially a numismatic coin, affects its market value – while for bullion it primarily affects its tradability and trustworthiness .

Conclusion

Gold is not a means of payment today, nor a substitute for modern currencies – but a stable, international asset class with a clear function: preservation of value, risk diversification and financial robustness. For most investors , gold coins in standard market denominations are the most practical form of this investment.

They connect:

  • high liquidity

  • good recognizability

  • flexible denomination

  • long-term value stability

and are therefore a reliable component in a balanced asset portfolio .

We would be happy to advise you individually on the selection of suitable coin types, denominations and investment concepts.

Discover the new additions to our gold coin collection in the current range!

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