Should I Buy Fractional Coins?

Should I Buy Fractional Gold Coins?


Written by John Rothans

Oct 7, 2020

You’re probably familiar with the heavy hitters in precious metals—the coins that everyone seems to want, like the 1-oz. Gold American Eagle, 1-oz. Gold Krugerrand, and 1-oz. Gold Maple Leaf. But you have other options—options that offer opportunities for more variety and liquidity. Here, we break down the advantages of purchasing fractional coins.

What Are Fractional Gold Coins?

One of the ways bullion gold coins are measured is by their weight. They can also be measured by gold purity. Fractional gold coins are those that contain a fractional amount of gold—less than 1 oz. They typically come in 1/2-oz., 1/4-oz., and 1/10-oz. amounts. Fractional coins are legal tender and have face value, but they’re not meant to be used as currency, The Royal Mint notes. The price of a fractional coin tends to decrease as the weight decreases, though there are some exceptions if a coin is highly sought after or incredibly unique.

Examples of fractional coins are:

Perhaps the most popular fractional gold coins are Gold American Eagles. The U.S. Mint minted the first American Eagle coin in 1986 under a congressional measure signed into law by President Ronald Reagan. Produced at the West Point Mint in West Point, New York, the gold coins come in 1-oz. ($50 legal-tender value), 1/2-oz. ($25 legal-tender value), 1/4-oz. ($10 legal-tender value), and 1/10-oz. ($5 legal-tender value) sizes.

Because the U.S. government backs them for their gold content, weight, and purity, American Gold Eagle coins are recognized in markets worldwide.

American Gold Eagles represent about 80% of the gold bullion in circulation in the U.S. They’re also composed of 91.67% gold, 3% silver, and 5.33% copper.

Why Buy Fractional Gold Coins?

Fractional gold coins can offer several advantages. These include:

  • Affordability: Fractional gold coins generally cost less than their heavier counterparts since they contain less gold.
  • Diversity: Diversifying is about more than purchasing different precious metals and coins. It’s about incorporating different coin weights, too.
  • Flexibility: Let’s say you need to liquidate a portion of your physical gold holdings, but you don’t want to liquidate a full ounce of gold. You can’t sell a portion of a 1-oz. coin. However, depending on its weight, you could liquidate a fractional coin and receive the funds you want.
  • “Gift-ability”: For the holidays, you want to give each of your kids a gold coin. However, you’d like to divide up the $2,000 you’ve allocated for those gifts. With that $2,000, you can buy several fractional coins. The U.S. Mint writes that fractional gold coins “make affordable and thoughtful gifts.”
  • Memory: Many fractional coins honor historic American events. A fractional gold coin, like the 1/10 oz. Iwo Jima Gold Bullion coin, offers a great opportunity for gold buyers to memorialize a significant point in history but spend a little less.

In the end, buying a fractional gold coin can be a great way to own a “piece” of a highly sought-after 1-oz. coin.

You can buy fractional gold coins online or over the phone today. Call 844-307-1589 to speak with a knowledgeable Account Executive and learn more about U.S. Money Reserve’s selection of exclusive fractional gold coins, like the 1/10-oz. Iwo Jima Gold Bullion coin.


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