What are bullion coins?

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What are bullion coins?

Originating in Gold Coins used as payment coins, as the gold standard was still maintained at the time. Since gold has also acquired a real investment function, there are also gold coins that do not have a primary payment function but are used as a pure investment.

One of the most important characteristics of an investment coin is that the value of the coin is based on the weight of fine gold incorporated in the coin, linked to the market value of gold. However, many gold investment coins do have a face value attached to them and can also be legal tender. This is not the most important feature of an investment coin, as in most cases the value of gold is significantly higher than its face value.

An important distinction that we would like to make here are the collector and commemorative coins on the one hand and the investment coins on the other. Of course, in practice this can be intertwined. Since a gold commemorative coin can indeed fulfil an investment function due to its weight of gold.

Regulatory Investment Coins

In the European Directive 98/80/EC, the European Commission specifies the properties of investment coins and distinguishes the investment coins with some of the collectible and numismatic coins. The following characteristics are decisive for investment coins:

-        if the gold content is higher than 90%;
-        if the coin was minted after 1800;
-        if it is or has been legal tender in a state; and
-        if the sales value does not exceed 80% of the market value of gold.

The Dutch government has also adopted this in the Turnover Tax Act 1968. In addition, the government indicates in this tax law that all Gold Coins mentioned by the European Commission in their annual report in the C series of the Official Journal also falls under the heading of investment coins.

Dutch investment currencies

The gold coins of the Dutch state that fall under investment coins according to the European Commission are:

-        golden ducat (single and double)
-        1 guilder coin
-        5 guilder coin
-        10 guilder coin
-        10 euro coin
-        20 euro coin
-        50 euro coin

Common investment coins

Despite the diverse range of Dutch investment coins, many foreign coins are also traded in the Netherlands. Many of these investment coins are minted specifically for this purpose, also known as bullion coins. Often there is a premium for the issuing party. These investment coins are usually issued by a state and also have a face value. However, this face value is significantly lower than the market value based on the gold.

Common investment coins in the Netherlands are the:

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