Why do investors pay high premiums for international bullion coins instead of standard cast bars?
The Premium of Minted Coins
When you buy a sovereign gold coin (a coin minted by a national government), you pay a higher premium over the spot price than you would for a raw cast bar. This premium covers the intricate minting process and the guarantee of a sovereign nation.
The South African Krugerrand
Introduced in 1967, the Krugerrand is the most widely traded gold bullion coin in the world. It is made of 22K gold, but contains exactly one troy ounce of pure gold (the alloy makes it more durable than 24K coins). It is instantly recognizable and highly liquid worldwide.
The British Sovereign
Extremely popular in Pakistan due to historical colonial ties, the British Sovereign is a smaller 22K coin. It is highly sought after for gifting during weddings and childbirths, carrying a numismatic (collector) value on top of its gold weight.