Dear Jim,
Regarding the metal content of gold bullion tokens: Gold Eagles are 22 karat, as are Krugerrands–the respondent in the old mail you quoted had that point wrong, too. (Where he claimed Eagles were less accepted than “pure gold” kruggerands (sic).)
British Sovereigns are also 22 karat, with four coins equaling not quite one ounce of gold. Canadian Gold Maple Leafs, PAMP and Credit Suisse bars, and hallmarked bars and coins with .999 or .9999 are as close to pure as one can find.
However, since it’s the gold content that is being traded, and that content is stated in grams or troy ounces, the alloying metal isn’t that significant. What matters is the taker’s confidence in the hallmarks on the coin or bar. Even if the US government should collapse tomorrow, a Gold Eagle is a known ounce of gold in coin form, with some copper to alloy it, whereas a Joe’s Discount Mint One Ouncer may in fact be .9999 gold, but how can one be sure?
This is why such mundane items as worn out pre-1965 dimes have an intrinsic value. They contain a known quantity of precious metal, that was assayed and certified by a government [that was once] willing to back its exchanges with that metal. – Michael Z. Williamson
JWR Replies: Thanks for that advice. I generally prefer bullion coins rather than fractional gold coins such as Sovereigns and $20 gold pieces. The latter sell for numismatic premiums, which is disadvantageous. And because they have fractional weights, determining their value on any given day is more difficult. For the same reason they will probably be less accepted in post-collapse barter transactions. (Although as I’ve stated repeatedly, silver is best for barter coinage because gold is too compact a form of wealth!)
Readers are warned: If you buy gold bars or ingots, buy only serialized bars and have them assayed. Beware of faked gold coins. This is typically done with Chinese Pandas that are sans a milled rim. Any coin with a milled edge is hard to fake, since that is where the “mold line” of a cast fake would be. (A mold line can be easily polished off of a coin with a smooth rim, but it is far more difficult to do on a milled edge.) My general advice is to buy widely recognized gold bullion coins such as U.S. Gold Eagles, Canadian Maple Leafs, South African Krugerrands, or Australian Kookaburras.
Buy whatever variety of gold coin is at present the most widely recognized gold coin in your country. Here in the U.S., that means the U.S. Gold Eagle or the Krugerrand–not $20 Double Eagle gold pieces. (I’m no expert, but I suspect that in England that would mean the gold Sovereign. In France the “Rooster” gold franc. In Switzerland, the “Vrenelli” gold franc.)
The bottom line: Buy only from reputable dealers, never buy gold Pandas, and if it is a bullion coin, only buy coins with milled edges!