The Monetary Value of Coins

twuuajsf-coins_chuckcross_eyeem_gettyimagesjpg-1210-680Gold used to be the metal of choice for minting coins in the ancient world. Gold had a high weight to value ratio and it was also easy to work into lingots or standard gold coins. The metal was instantly recognizable and it is very inactive in terms of chemical composition. This means that it does not spoil or dull in shine like other metals such as silver or bronze.

Gold coins were used for many years way up until the turn of the century. But the great depression of the 1930s saw the central banks of several governments adopt other, much cheaper metals with which to mint coin without diminishing quality or durability standards.

Gone were the florins, guineas and gulden and in came new much cheaper to produce coinage. Gold, however, retained its value and any coins that were not exchanged for their new value in coinage could be sold on as bullion at true value, according to weight.

Major currencies around the world, including the dollar and the pound, sterling were still pegged against gold value long after that. It was only in the 1970s and 1980s, when the phenomenon of digital share trading took hold, that the backing bullion became less important than the virtual or paper money that is used today.

The most remarkable thing in all of this is that gold still retains its value and central banks around the world are still producing gold coins as investments. People still trade in gold and there are which track the metal’s value on a 24-hour basis. Trading in gold is stil big business.

There are schemes, for example, that allow the purchase of gold coins for a fee and once a specific number of coins is collected, it can be redeemed for a fixed amount of relative cash, or it can be reinvested in the collection of yet larger denominations of gold coin.