When a gold investor decides to take the leap and “get physical”, the usual first step is the purchase of a gold bullion coin. Many investors in the US, with good reason, are attracted to the American Gold Eagle coin, for its liquidity, convenience, and wide availability. The AGE however is not the only game in town; many other countries’ gold bullion coins approach (and possibly equal or surpass) the popularity of the American Gold Eagle in many parts of the world. [See also: 50 Ways to Invest in Gold.]
For instance, according to a (now offline) article at ResourceInvestor.com (via the Kitco Forums), the world’s best selling gold bullion coin is minted by the Turkish Mint.
It may come as a surprise to most retail gold investors to learn that The Turkish State Mint has issued 134 million “Meskuk *and Ziynet” *gold bullion coins (13 million ounces equals about 405 metric tonnes), making them the world’s best-selling gold bullion coins over past decade. The coins were sold mainly in Turkey and in the Middle East. The United States Mint, by comparison, issued only 9.8 million Eagle and Buffalo gold bullion coins (6.8 million ozs. = 212 tonnes) in the same period.
As well as boosting demand for Gold Coins and bars in Turkey, the Eurozone crisis appears to have led to increased interest in Allocated Gold accounts – whereby an investor owns gold outright as his or her property, with the gold being stored in a professional bullion vault under a custody arrangement.
“A number of countries,” the report says, “notably Turkey and German-speaking European markets, saw an upsurge in demand for allocated metal accounts, largely on the back of concerns relating to European financial stability.”
Beyond the gold coins minted by Turkey, many other countries’ gold coins enjoy wide popularity both worldwide and in the US. If you visit the APMEX ‘Top 40 Products’ page, and filter out the fractional gold coins, you can see a useful ranking of the relative popularity of gold bullion coins amongst the (large) APMEX client base (as of 5/24/2012):
- Gold American Eagle
- Gold [American] Buffalo
- Gold Canadian Maple Leaf
- Gold South African Krugerrand
- Gold Austrian Philharmonic
- Australian Gold Kangaroo
- Gold Austrian/Hungarian 100 Corona AGW .9802
- Gold French 20 Franc Rooster AGW .1867
- Gold Swiss 20 Franc AGW .1867
- Gold British Sovereign AGW .2354
Of course, given that APMEX categorizes different countries’ coins somewhat inconsistently from the point of view that we’re trying to get a feel for each countries’ coin’s popularity across all years, this ranking must be taken with a huge grain of salt (e.g., sometimes APMEX lists a specific year’s coin as a unique product, but other times lumps different years together into a “random year” product). Still, the ranking above gives some clues about which gold bullion coins are most popular among the APMEX client base, which is a decent proxy for the American retail investor market.
In any case, diversifying into different bullion coin types can make sense, even from an investor point of view (since the appeal to a collector is obvious!) There are many choices beyond the venerable Krugerrand and the obvious Gold Eagle that have plenty of liquidity for the retail investor. Personally, I am a huge fan of the Chinese Gold Panda. But that’s just me, and I like bears!
Disclosure: The author is long gold.