Can Gold Coins Be Used As Currency?
Some gold coins can be used as currency while others cannot. It depends whether the gold coins were monetized or are just considered bullion. The key is to accurately identify the gold coin.
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Gold Money
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Prior to 1933, the United States minted gold coins as money in denominations of $1, $2.50, $3, $5, $10 and $20. These can still technically be used as currency and spent at face value.
Gold Bullion
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Gold bullion, like American Gold Eagles, resemble gold coins in shape and appearance, but is not considered currency since it is not monetized by a government. Its value is in its gold content.
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Krugerrands
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Gold bullion coins of South Africa, called Krugerrands, are considered legal tender in South Africa. The Krugerrand is unique since it is considered both bullion and currency.
Value
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Gold coins are more valuable than the face value on them since gold commands a high price. Since the price of gold fluctuates daily, gold coins have no fixed value.
Trade
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Transactions involving gold coins are considered trades and not currency for product or service exchanges. This is due to the fact that gold coins have a face value that is different from their actual value.
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