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Gold rounds vs Gold American Eagle coins

Should I Buy Rounds or Coins? Key Differences To Consider

Stocks, real estate, bonds, and beyond: every asset class has its own unique words and phrases, as well as bits of language that you must pick up in order to take part in the larger conversation. Buying gold and silver is no different. The more you know, the further you can take your portfolio. Two phrases that can pose problems for new precious metals buyers include “coins” and “rounds.” The two are uncannily similar in terms of physical appearance, however, there are important distinctions to understand before buying rounds over coins. Being savvy about the differences between these two can lead to owning a portfolio that you're not only proud of, but that performs to your standards.

What's the difference between rounds and coins?

Production

  • Coins are minted by a sovereign government, are legal tender, and have a minimum face value in addition to a melt value.
  • Rounds are minted by private mints, have no face value, and generally have only melt value. Since only a governing authority can extend monetary value, or face value, to a coin—not a private mint or company—rounds cannot be a form of legal tender.

Keep in mind… You could theoretically use government-issued coins as money to buy groceries or pay for gas, just as readily as quarters or dollar bills. Rounds, on the other hand, are not backed by a government and are not accepted as legal tender. A round’s appeal is primarily tied to the metal it contains. Think of rounds more like small, non-monetary, coin-like pieces of precious metal.

Design

  • Coins are round in shape. In most countries, designs must be approved by a legislative body and advisory committee. Some coins feature a design that changes from year to year, like the Australian Kangaroo Gold Coin and the Australian Kookaburra Silver Coin, a practice that can boost the appeal, rarity, and performance of these coins. The year of issue is always present on a gold or silver coin.
  • Rounds are also—you guessed it—round. They can be produced with nearly any design, even designs that closely resemble the official designs on coins. Helpfully so, these replica rounds must be marked as such. They will either have “R” or “COPY” stamped on them so that buyers can quickly distinguish between government-issued coins and privately minted rounds with a similar design. A round may or may not have an issue date stamped into it.

Keep in mind… The designing and minting process for government-issued gold and silver coins ensures consistency and design integrity. With that said, both coins and rounds can have designs that hold special meaning, making gifts of gold and silver a great way to commemorate important events such as birthdays, anniversaries, weddings, national holidays, etc. The design on a coin or round can also signify something unique between the giver and recipient, an influencing factor that goes far beyond the monetary appeal of gold and silver.

1 oz. Gold American Eagle Bullion Coin

 

 

The Gold American Eagle Coin remains one of the most beautiful coins ever struck. Learn how the coin's obverse and reverse designs cemented it as a symbol of American tradition and unity. Call 1-844-307-1589 to secure yours today. As the U.S. Mint's most popular gold bullion coin, it has a history of selling out!

Size & Weight

  • Coins are minted in a range of sizes—primarily 1/10 oz., 1/4 oz., 1/2 oz., and 1 oz. weights.
  • Rounds can also be produced in a variety of sizes and weights, with one big exception: No round can have the exact same specifications as a government-issued coin. A round can never have the same diameter, thickness, and mass as a legal tender coin. This helps prevent counterfeiting and makes it harder to defraud coin-operated technologies. It can also lead to some unexpected weights, like 1/20 oz., 2 oz., 5 oz., and 10 oz. rounds.

Keep in mind… At larger weights, gold or silver rounds can serve as substitutes for bars and support fast, high-volume diversification. Some buyers prefer the smaller sizes of rounds, like the 1/20 oz. rounds, which can be an affordable way to get started when you’re new to the world of precious metals.

Price

  • The price of bullion coins is primarily determined by the spot price of gold and silver and the coin's weight. The price of certified coins includes these factors, along with coin availability and condition.
  • Rounds typically have a low premium over spot price, like bars, since a round's market value stems from its intrinsic metal content. Gold and silver rounds may look more like coins, but they have more in common with bars than bullion. Rounds tend to offer little insulation from spot market volatility.

Keep in mind… Unlike rounds and bars, many coins have numismatic potential. In addition to their intrinsic metal value, these coins also have a proven rate of appreciation based on their rarity, condition, and demand. Their “worth” includes historic and aesthetic appeal, similar to a painting. In both the case of coins and rounds, a greater weight typically carries a higher price.

Performance Potential & Risk

  • The performance potential of many bullion coins and certified coins is well documented. Issue dates, coin types, coin populations, and more can be tracked over time, giving you greater insight into how your gold and silver coins may perform in coming years.
  • Since there are so many variations of rounds, it's tough to speak to their performance potential. A round commemorating the release of a popular film may perform well one year, but not the next. Performance can differ from round to round, design to design, and timeframe to timeframe.

Keep in mind… There’s risk associated with buying a round that you simply won’t find with a government-issued, legal tender coin. For instance, your local coin shop may design and sell their own gold round, beautifully emblazoned with the American flag on one side and Alexander Hamilton on the other. Sounds patriotic and official, but will it retain its market value? It might. It might not. If you buy this round, you could end up stuck—stuck selling it back to the same local shop or to another dealer at a much lower price.

Coins or Rounds: Which is right for you?

U.S. government-issued gold and silver bullion coins and certified coins come with additional security and peace of mind that you likely won’t find with privately produced rounds. In the case of the Gold American Eagle Coin, for example, you know that the coin is backed by the U.S. government for its gold content, weight, and purity. A round doesn't necessarily come with the same quality guarantee.

In uncertain economic times, you can limit the number of financial unknowns in your life by buying gold and silver coins. Call 1-844-307-1589 for a one-on-one consultation with an experienced Account Executive. A knowledgeable representative will take the time to help you make the right decision for your unique situation.

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