Gold bullion coins offer an exciting and potentially rewarding opportunity to diversify your investment portfolio. But have you ever wondered, “what are gold coins made of?” or “are gold coins solid gold?” Here, we explain what metals are used to make coins and how they’re made. Thus, you’ll have a greater understanding of gold bullion coins before you delve into this compelling new investment enterprise. Let’s get started.
What are coins made of?
Gold coins, unsurprisingly, are made using gold. To be considered bullion, investment-grade gold, coins must contain at least 99.5% pure gold. Generally speaking, bullion coins are 24-carat gold, though. This means that they are 99.99% pure gold. Conversely, jewellery typically contains 37.5% (9-carat) gold.
But, what is gold made of? Gold is a precious metal that has been used for jewellery and coinage for millennia. In fact, up until 1930, it was even used when minting legal tender. Gold is found under the surface of the earth, therefore it needs to be mined and extracted from the rock before it can be refined and used.
What Is a 22ct Gold Coin?
Carat is the term used to describe the purity of gold. Like we mentioned earlier, 24-carat gold contains 99.99% pure gold. This purity is measured on a scale, with 24-carat at the top, depicting pure gold. As we move down the scale, we find more impurities, and therefore, the carat rating goes down.
So, what is a 22ct gold coin? Historically, 22-carat gold coins were extremely popular. In fact, most gold coins minted since 1800 are 22ct. These coins are approximately 91.67% pure gold. Interestingly, gold is quite a soft metal. Therefore, the higher the purity, the less dense it becomes. This means that pure gold coins are more susceptible to scratching and other damage. As coins are used as legal tender, they need to be able to withstand a lot of movement, wear and tear.
Are gold coins solid gold? Yes, but to make gold coins more durable, they are often alloyed with other metals. Typically, the other 8.33% of 22ct gold coins will be made up of more durable metals like silver, copper, zinc, or nickel.
This method is often used when minted gold bullion coins too. The addition of other metals helps to make the coin stronger, preventing scratching and other damage as the coins are moved about. For instance, American Gold Eagle coins and the South African Krugerrand coins will contain tiny amounts of copper or silver to strengthen them.
How to Make Gold Coins
Experts make each bullion coin under license from central banks, in mints. Typically, these mints are controlled by governments or their national banks. The entire production process is known as ‘minting’ and it comprises three main steps:
- Design and die making
The Refinement Process
The first step in the minting process is to prepare the metal. This is done in a refinery. In the case of gold bullion coin production, the refinery will need to use gold ingots or a gold alloy. These gold bars are then pressed between rollers and subjected to intense pressure. This rolls the metal bars into large sheets. Next, these sheets are rolled into coils. In coin production, the sheets will be cut in ‘blanks’ to prepare them for minting.
Forming a Design, Prototyping, and Making Die
As you know, there are many different bullion coins, each with its own distinct and intricate design. Typically, these designs are based on traditional imagery, or they have elements originating from historical coins. It takes years to develop new designs, and it is usually only done to mark a significant or historical event. For instance, coins were designed and minted to celebrate the Queen’s Diamond Jubilee in 2021.
When a new design for a coin has been approved, they must first make a large scale clay model. Then, using this, they can make a plaster cast. Advanced mechanical technology is then used to reduce this cast down to an actual-size cast. They can then use this to make a steel ‘master’. Then, they impress or engrave this master with the design. Next, they make ‘hubs’ or relief punches from this master. Experts use these punches to make dies. These are stamps that we use to press the design onto gold banks, making finished bullion coins.
Over time, the dies will wear down, and the imagery will lose definition. Therefore, it’s important to produce multiple punches or hubs so that we can make replacement dies when needed.
Minting Gold Coins
Once the dies are ready to go, they roll the coiled gold sheets out to the required height for each coin. This height is slightly more than the finished height of the coin, because as it is pressed, the intense pressure will flatten the coin slightly. When these blank coins are stamped out, we refer to them as ‘planchets’. The leftover scrap metal is known as webbing, and it is returned to the refinery where they will reuse it. Next, they use powerful machinery to press the planchets between two dies to stamp them with the required design.
You may have noticed that some coins have a knurled pattern around the edges. This is referred to as the third side. This pattern is achieved by using a specific edging machine. Alternatively, one can achieve this effect by using an engraved collar. This collar is fitted around the planchet before it is pressed. Then, the pressure of the press flattens the coin, imprinting the engraving on the inside of the collar onto the third side of the coin.
What Happens After Minting?
When the minting process is complete, each coin is scrutinised to make sure any sub-standard coins are returned to the refinery to be reused. If a coin has even the slightest imperfection, it is known as a waffler, and it cannot be used. On the rare occasion that a defective coin is passed into circulation, it can become an object of desire for coin collectors and numismatists, due to its rarity.
The entirety of the minting process is conducted under strict security measures to ensure the safety of the coins. This is particularly true when it comes to minting bullion coins, as they are extremely valuable. Once these coins pass quality checks, they are stored in vaults or transported to dealers. Equally, any coins that are defective are returned to the refinery under high-security conditions.
Any coins made of gold, particularly 24-carat gold, are exceptionally valuable, whether they have small imperfections or not. This is because gold has a high value-to-weight ratio. Coins can be re-melted into larger units or re-coined.
Now You Know What are Gold Coins Made of
Now you can answer the question of “what are gold coins made of”, you may be ready to dive into the realm of precious metal investments. With GoldCore, this process couldn’t be easier. Simply click the “open account” button at the top right of our site. There, you will receive instructions on how to set up your very own trading account. You can read more about this process here on our "What are Gold Coins" page.
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