History of Gold & Silver Coins

Coins have been used for thousands of years with the first coins thought to have been minted around 670 BC in Turkey. This was over 100 years before King Croessus (the wealthy individual behind the expression “as rich as Croessus”) produced a 98% pure gold coin around 550BC.

Interestingly, Julius Caesar also minted coins to pay his troops, and they were probably some of the first individuals to literally see “inflation”, whereby the value of the physical bullion within the coin rapidly exceeded the nominal value stamped on the coin. Literally the “value” of the currency was dropping relative to the value of the metal used in construction. Governments learnt from this and now construct currency coins from base metals with a low intrinsic value relative to the face value.

Due to our fiat currency system, there is no value placed on the content of our currency other than the nominated face value, and if in fact inflation had caused the face value to be worth less than the intrinsic value of the component metals of a coin, the mix of the coin is changed or as with the 1and 2cent pieces from Australia, they have their production ceased entirely. The advantage of today’s modern bullion coins is that they have their purity and precious metal content guaranteed by the issuing Government. This can provide a degree of confidence and acceptance when trading, without the need to assay for content or quality. Counterfeiting or tampering is difficult and storage is relatively simple.

Common bullion coins such as the Krugerrand, the Canadian Maple, the Austrian Philharmonic and Australia’s own Kangaroo/Nugget are accepted throughout the world for their gold and silver content as well as their artistic beauty. To help negate the negative impact of inflation on bullion coins (whose quality cannot be tampered with) there may be no face value e.g. Krugerrands, or the nominated face value is already well below the coin’s intrinsic bullion value. They trade immediately on a price that has a percentage added for the minting of the coin and potentially a “collectors premium”, but is mainly dictated by their troy weight and precious metal content.

Australian Nugget/Kangaroo coins

Australia’s Perth Mint started producing a bullion coin known as the “gold nugget” in 1986 and was the first legal tender bullion coin to change its design each year as well as limit its mintages annually. In 1989 the design was changed from a gold nugget to a Kangaroo and hence the coin is known worldwide as both the Kangaroo and the Nugget. Each year the new design is produced and released as a proof edition and then released as the general bullion coin the following year.