What is the difference between investment gold and numismatic gold?
Gold has been one of the safest means of preserving value for centuries. More and more people are buying investment gold bars or modern gold coins, whilst many families have old gold coins tucked away, which they often dismiss as „just gold”.
Yet this is one of the biggest misconceptions.
There is a huge difference between investment gold and numismatic gold coins. Although both are made of gold, their value is determined by completely different factors.
What counts as investment gold?
We refer to gold bars and modern gold coins that are purchased primarily for savings purposes as ‘investment gold’.
These include, for example:
• Krugerrand
• Vienna Philharmonic
• Canadian Maple Leaf
• Britannia
• American Buffalo
Their value is determined almost entirely by the world market price of gold. If the price of gold rises by 10%, their value will also increase by roughly the same amount.
What counts as numismatic gold?
The situation is quite different when it comes to numismatic gold coins. Here, the gold content is merely one measure of value.
The final price is influenced far more by rarity, historical significance, the number of surviving copies, condition, collector demand, and how rarely it comes onto the market.
That is precisely why there can be a price difference of as much as ten or a hundred times between two gold coins of the same weight.
A real-life example from our auction
An excellent example of this is one of the standout lots in the Procopius Numismatics auction.
A 15-ducat gold medal issued to mark the coronation of Ferdinand V in Bratislava in 1830.
Details:
• Weight: 52.37 grams
• Condition: UNC / UNC–FDC
• Rarity: RRR
• Number of known examples on the market: just 4
At Procopius Numizmatika’s international auction, this item achieved a hammer price of 18,000,000 forints.
If we were to treat this coin simply as investment gold, we would need to take only its gold content into account.
In reality, however, the buyers did not pay 18 million forints for 52.37 grams of gold.
But because it is extremely rare, of outstanding historical importance, has survived in excellent condition, and only a handful of collectors worldwide will ever have the chance to acquire it.
In this case, the value of the gold represented only a fraction of the total market value.
Why might an old gold coin be much more valuable?
In numismatics, one of the most important factors is rarity. A coin of which tens of thousands were minted is generally valued at a price close to the price of gold.
However, for a coin of which there are only a few known examples in the world, collectors are willing to pay many times the price.
Added to this are the historical background, the artistic craftsmanship, the condition and international demand.
The biggest mistake: just looking at the weight
Day in, day out, we meet heirs or owners who say: „This is an old gold coin; let’s weigh it and see how much gold it contains.”
It’s like judging a painting by the weight of the canvas.
In the case of a rare historical gold coin, its true value often lies not in the precious metal itself, but in its history, rarity and significance to collectors.
Unfortunately, there have been cases where valuable historical gold coins have simply been melted down because their owners did not realise what they were holding.
Which is the better investment?
The benefits of investing in gold:
• easy to buy and sell
• its price tracks the world market price of gold
• easy to assess
The advantages of numismatic gold coins:
• due to their rarity, their value may increase even independently of the price of gold
• the international collectors’ market drives prices
• they also represent historical and cultural value
• In the long term, the best shares often outperform the price of gold.
Summary
Investment gold and numismatic gold are made from the same precious metal, yet they represent two completely different worlds.
The value of investment gold is determined primarily by the world market price of gold.
By contrast, the value of numismatic gold is determined by its rarity, historical significance, condition and international collector demand.
Ferdinand V’s 15-ducat coronation gold coin from 1830 illustrates this difference well. Although it contains just 52.37 grams of gold, it fetched a hammer price of 18 million forints at our auction. The buyer did not merely purchase the gold, but an extraordinary historical rarity, of which only four known examples have appeared on the international market to date.
Before selling an old gold coin or valuing it solely on the basis of its gold content, always seek the advice of a numismatic expert. An expert appraisal could make a difference of as much as several million forints.
Procopius Numismatics
Procopius Numismatics specialises in the valuation, purchase and sale at international auctions of historical gold coins, rare gold coins and numismatic rarities. If you would like to find out whether your old gold coin is really worth only its gold content, or whether you are the owner of an outstanding numismatic rarity, please do not hesitate to contact our experts.
If you have a moment, we’d love for you to have a look around our website.