Gold is gold is gold. Or is it? The potential of your precious metals portfolio could be significantly impacted by the purity of the gold coins within it—and yes, gold purity can vary. Learn the key differences between 18k, 22k, and 24k gold coins so you can choose the best product for your needs.
Karat vs. Fineness
Before we get too far, let’s go over a couple of major definitions: karatage and fineness.
- Karatage: Karatage refers to the purity of gold (such as 18 karats or 18k).
- Fineness: Fineness expresses the precious metal content of gold in parts per thousand, such as 750—meaning 75% gold, which translates to 18k.
What follows is the breakdown of precious metal content for 18k, 22k, and 24k gold.
|Precious Metal Content of Gold|
|18k Gold||Gold: 75%,|
|Generally reserved for gold jewelry|
|22k Gold||Gold: 91.7%|
|Gold American Eagle Coin|
|24k Gold||Gold: 99.99%|
(the purest type of gold you can buy)
|Gold American Buffalo Coin|
In the world of coins, those made of 24k gold can be among the most coveted, but 22k gold coins certainly don’t go unnoticed. Gold American Eagle Coins are made of 22k gold and despite the fact that the U.S. Mint is required to issue Gold Eagles “in quantities sufficient to meet public demand,” they’ve been unable to do so multiple times. The demand for the coins was simple too high. Also, because 22k coins contain copper, they're physically sturdier than 24k gold coins.
Gold Coin Prices by Purity
As you might imagine, since 24k gold coins are made of pure gold, their prices tend to be higher than 22k gold coin prices. And 22k gold coins tend to carry higher prices than 18k gold coins.
More gold usually equals more money paid for a coin, especially with gold bullion coins, but that's not always the case. Certified gold coin prices can also vary based on a coin's grade, condition, and availability.
Here are examples of a popular 22k gold bullion coin and a popular 24k gold bullion coin:
- The 22k Gold American Eagle Coin is one of the top-selling gold bullion coins in the United States. The 1 oz. Gold American Eagle Coin is designated as official legal tender, meaning the federal government backs its gold content, weight, and purity. It’s a popular addition to any gold owner’s portfolio. It’s also the only 22k gold coin authorized by the IRS for inclusion in a Self-Directed IRA.
- The 24k Gold American Buffalo Coin is a fine example of American coinage and is said to recall “a golden age of coin artistry.” Introduced in 2006, it’s the nation’s first-ever 24k gold coin. Plus, this 1 oz. coin is authorized U.S. legal tender. The Gold American Buffalo Coin takes its inspiration from one of the most recognizable designs ever struck by the U.S. Mint.
Forbes.com declares that the American Eagle and American Buffalo are among the best gold coins for North American asset holders.
Why buy gold coins over jewelry?
So, why buy gold coins such as the American Eagle or American Buffalo (or even gold bars) instead of gold jewelry? Annual jewelry demand barely changed in 2018, after a 3 percent YoY drop in Q4 demand reversed the Q3 gains, reports the World Gold Council. The reason for this flat demand could be threefold:
- Coins and bars can be easier to sell than gold jewelry, mainly because their purity and fineness are simpler to determine.
- Bullion coins and bars could sell closer to the spot price of gold than jewelry.
- Some would argue that the coin and bar pricing is more objective and consistent than jewelry, since fashion, added gemstones, and the history of a particular piece of jewelry could have a significant impact on its price.
The TaxAct Blog cites several other reasons to consider adding gold coins to your portfolio, including:
- Gold tends to go up when other assets decline, providing a stabilizing effect for your portfolio.
- Gold can work as a hedge against inflation.
- Gold isn’t hit with capital gains taxes until you sell it.*
The bottom line is that coins can be one of the best ways for asset holders to buy gold, according to Forbes.com, because they’re highly liquid and easy to sell or trade. Plus, gold coins may offer higher premiums than gold bars do. These are just a couple of golden reasons to buy gold coins vs. other types of the precious metal.
Are you wondering where to buy 24k gold coins? Or 22k gold coins? U.S. Money Reserve is America’s Gold Authority® for a reason. We know gold! Shop government-issued 22k and 24k gold coins today.
*Nothing herein should be considered as tax or retirement advice as U.S. Money Reserve cannot and does not offer tax advice. Clients should consult an attorney or tax advisor for specific tax or legal advice. U.S. Money Reserve does not guarantee the performance or service of any depository or IRA custodian. Estimated third-party storage and administrative fees are subject to change at the discretion of the selected independent IRA custodian and depository.