Gold bullion coins are measured by weight in troy ounces. The troy ounce weight of a coin differs from the coin’s actual weight by being somewhat less. The troy ounce value measures the amount of pure gold contained in a gold coin. The remainder of the coin’s weight is made up of other metals that have been mixed with the gold as an alloy.
Gold is a soft metallic substance and cannot be molded into a hard coin or ingot without the assistance (addition) of another metal. That’s why the actual weight of a coin or bar is always somewhat greater than the troy weight. A gold bar, for example, that weighs one kilo (2.5 pounds, or 37 ounces) would probably have a troy weight of about 32.5 ounces. The remaining 4.5 ounces in the bar are the alloy metal that was mixed with the gold to make it hard.
Gold bullion coins come in a variety of weights, including 1 ounce, 1/2 ounce, 1/4 ounce, 1/10 ounce and 1/20 ounce sizes. The one-ounce size is typically the most popular and available.
Among one-ounce gold coins, the Canadian Maple Leaf, the American Eagle, and the South African Krugerand are the most commonly traded. Of the three, the Maple Leaf has the most pure gold content (highest troy ounce value). This makes the coin more yellow in appearance and more sought among investors than the American Eagle or Krugerand, although their prices (trade values) are identical.
Gold bullion coins become particularly popular, and even may become temporarily unavailable, during crisis times in the economy. This is because investors regard gold as one of the safest forms of money (the others being silver and platinum). Whatever the market is doing, gold can be counted on to retain its intrinsic value. After all, it has been treasured by mankind since the dawn of civilization and will never go out of style.
Unlike the actual material itself (bullion coins or ingots), stock market certificates representing gold do not ensure stability. When the market crashes, so do gold shares, but gold itself (the coins and bars) actually rise in value. Having a cache of gold bullion coins in one’s possession is one of the best ways to protect oneself from financial loss in an unstable economy. (See Gold Coins as Investment.)