Gold Coins

[Doug H]

I have a question about gold coins and I'm sure its simple, I just don't know the answer so excuse me for being ignorant. Have gold coins always been a collectable or novelty or were they made for circulation(to be spent). I went on a numismatic page and looked at all the gold coins that were made starting in the 1800s and you have 1, 2.5, 3, 4, 5, 10, and 20 dollar face value gold coins, but what I don't understand is that I keep thinking "the value of the gold has always been more than the face value of the coin". I wouldn't think they made gold coins for collecting back in the 1800s. If they made the coins for circulation...who was carrying them...only the wealthy? In today's times even poor people walk around with a few coins in their pockets don't they. I did read about how Roosevelt recalled all gold coins after 1933. So I can see how after that the value went up. But I guess my bottom line question is...lets say 1853...was a 1 dollar gold coin really only worth 1 dollar? The buffalo gold coin that the mint came out with...has a face value of 50 dollars which way under what its worth...why not put 500 or 1000 dollar face value on it. is this so in case the gold value plummets that the coin wont be worth so much.

Thanks for teaching me about gold coins.

 

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[blindbug]

Gold coins were used in circulation as a form of money for a long time (well before the 1800's, think Roman empire here). It wasn't until the great depression, when people starting hoarding their gold, that the metal was discontinued from use as a 'circulating currency'. You say that the value of gold is significantly higher than the face value, but remember that in the year 1900, an ounce of gold was only worth about $20 total... and that's pure gold (most gold coins from circulation are not 0.9999% pure). A year 1907 $20 gold piece has about 33 grams of gold in it, at around $20 an ounce, you are talking about $24 worth of gold at the time (it's about $1250 worth of gold today)

Starting in the 1970's, the value of gold skyrocketed against the value of the dollar, but it primarily started in the 1930's, when a presidential order to not hoard gold and turn in your gold coins was issued. In 1933, an ounce of gold was about $32, and by 1977, it was up to $161 an ounce.

So to answer your question... yes, people actually used gold coins as circulating currency during those times. Mostly the 'rich' but it didn't take much money to be considered 'rich' when a few dollars would buy enough food for a family for the week.

(NOTE: all my calculations are very fuzzy... but I hope it answers the question)

 

[coinsareawesome]

They were also used in the Greek empire, too. I saw a gold coin on ebay from 405-395 BC for around $50,000!

 

[Doug H]

Thanks blindbug

 

[unclemac]

there are still folks alive today (my dad being one) that used gold coins at face value.