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World Gold Bullion Coins: Canadian Maple Leaf

Beauty, Liquidity, Value

Written by Luke Burgess
Posted January 4, 2016

The tides of investor interest have begun to flow back into the gold market.

According to the U.S. Mint, sales of American Gold Eagles increased 53% last year to over 800,000 ounces.

Meanwhile, the U.S. Mint also posted 2015 sales of American Gold Buffalo bullion coins of over 220,000 ounces — a 24% increase compared to the previous year.

Should you also decide to add physical gold bullion coins to your portfolio, you should be aware of the range in premiums dealers are charging for different coins.

Gold Bullion Coin Premiums

All bullion coins generally carry a premium — an additional value over spot prices. These premiums are generally the end result of a series of price markups to cover costs and realize profits that runs through the distribution chain from mint to retail dealer.

The premium for gold bullion coins has been lower than for silver coins over the past several years, especially right now. The premium for silver bullion coins are among the highest they've been in decades. But when you buy gold bullion coins, you generally get a lot more bullion for your money.

Nevertheless, the range in premiums for different gold bullion coins is significant — ranging from about 5% to 15% (give or take). Here's what you might expect to pay in a premium for different world gold bullion coins:

American Gold Eagle 5.5% to 10.5%
American Gold Buffalo 5.5% to 10.5%
Canadian Gold Maple Leaf 4.0% to 9.5%
Austrian Gold Philharmonic 4.0% to 9.5%
Mexican Gold Libertad 8.5% to 14.5%
Australian Gold Kangaroo 4.0% to 9.5%
Chinese Gold Panda (30 gram) 6.0% to 11.5%
South African Krugerrand 4.5% to 9.0%

The amount a dealer charges for bullion premiums usually depends on the purchase volume and method of payment (dealers generally charge a lower premium with a larger purchase and payment with cash, check, or bank wire). Paying for bullion with a credit card or PayPal is generally more expensive.

And, of course, every dealer is going to charge a different range of premiums based on its needs. A brick-and-mortar bullion and coin shop is going to charge a higher premium than a simple online resale operation because the B&M has much higher overhead. The premiums above are simply rounded averages of a few different dealer quotes.

But from what I can tell right now, the most affordable gold bullion coins to look into are the Maple Leaf, Philharmonic, and Aussie Kangaroo.

Generally speaking, investors should not have a hard time finding any of these. However, the Canadian Maple Leaf is perhaps the most well known among investors and dealers.

Canadian Gold Maple Leaf

The Canadian Gold Maple Leaf coin is among the most widely recognized gold bullion coins in the world. As the official bullion series of Canada, complete with legal tender status, the Maple Leaf is sought after by investors and collectors alike.

The Royal Canadian Mint began the series in 1979 with the introduction of the first Gold Maple Leaf (GML). At the time, the only other government-minted bullion coin was the South African Krugerrand.

However, the Krugerrand was scarce due to the economic boycott of apartheid-era South Africa. So for a lot of investors, it was the Canadian Maple Leaf or nothing. The U.S. Mint began production of the American Gold Eagle bullion coin in 1986.

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Gold Maple Leafs minted between 1979 and 1982 have a gold content of .999. The RCM increased the gold purity in the Maple Leaf the following year, and the coin continues to have a .9999 purity to this day.

This puts the Gold Maple Leaf among the purest of all gold bullion coins. The gold purity of an American Eagle, for instance, is only .9167. The same is true for many other gold bullion coins. And there's a good reason: Pure gold is incredible soft.

Bullion producers like the U.S. Mint add alloys like silver and copper to coins like the Gold Eagle to strengthen the metal. One major problem with pure .999 fine (or higher) gold coins is handling. The softness of pure 24-karat gold means coins can easily become damaged.

Some special-edition Gold Maple Leafs are even minted with a purity of .99999, called the "five nine" bullion coins.

But honestly, I'd call this a gimmick. That extra “9” (even the last two) isn't going to make that much of a difference when you go to sell your coins. The RCM's addition of those extra nines is practically on par with the evolution of the multi-blade cartridge razor, with brands like Gillette and Schick continuously adding one more blade to up the competition.

And that's one thing I really don't like about the Canadian Maple Leaf coins: There are a lot of gimmicks.

Every government-issued bullion coin has proof coins. This is a way for the country's mint to show off its minting technology and skill. Many government mints also produce special issues of their bullion coins, including those with special finishes such as satin, reverse proof coins, and color enhancements, such as holographic or enameled graphics.

But the Canadian Gold Maple Leaf comes with all of those special finishes, color enhancements, and more. Special issues of Gold Maple Leafs include:

gmlrp Reverse Proof Gold Maple Leafs — These coins feature a reversal of the mirror-like and frosty contrast typically seen on proof coins.
gmlrpf12125 .99999 Fine Gold Maple Leafs — Sometimes called the “five nines” coin, these special-issue coins have much lower mintages. Most have a legal tender value of $200, with five issued at a one million dollar face value and a weight of 100 kilograms.
gmlrpds Colored Gold Maple Leafs — First minted in 1999 to commemorate events and anniversaries, colored Gold Maple Leafs feature enameled coin devices.
gmlrphg Hologram Gold Maple Leaf — Minted between 1999 and 2009 to commemorate Gold Maple Leaf anniversaries.
gmlrppv Privy-Marked Gold Maple Leaf — Minted between 1997 and 2005, these coins feature a small privy mark that identifies an individual, mint, event, or acknowledges something else.

The Royal Canadian Mint has produced several other individual GML special issues commemorating different things or featuring some kind of special finish. There are simply too many to individually name. However, the basic features of the Gold Maple Leaf have remained the same since its inception.

The obverse of the coin depicts the likeness of Queen Elizabeth II (aging through the years), and the reverse showcases the signature maple leaf that is so closely associated with Canadian nationalism.

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Radial lines and a micro-engraved laser mark were added to the Gold Maple Leaf in 2015 as new security features.

The standard version of the Gold Maple Leaf is one troy ounce. Other sizes currently available range from 1 gram to 1/2 ounce.

The premium for Maple Leafs is, among other gold bullion, one the best right now. APMEX is currently charging a 3.5% to 9% premium for an uncirculated 2016 Canadian Gold Maple, depending on how many purchases at one time and how you pay (check/wire or credit card/PayPal).

As one of the world's most recognized gold bullion coins, the Canadian Gold Maple Leaf is a good coin to own for investors — as long as they stay away from the gimmicks.

Good Investing,

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Luke Burgess
Energy and Capital

P.S. It's important to note that the Royal Canadian Mint has produced, and still produces, a million other commemorative gold bullion coins that feature all kinds of designs aside from the Gold Maple Leaf series. So if you set out to purchase Canadian Gold Maples for your portfolio, make sure you get the right coin. It's likely that you'll encounter these commemorative coins when purchasing GMLs.

Of course, it's just my opinion, but some of the gold commemoratives issued by the Royal Canadian Mint are ridiculous in appearance or theme or simply uninteresting. Here are just a few...

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1991 Canada 1/4 oz Proof Gold $100 Empress of India

Commemorates the 100th anniversary of the Empress of India's first arrival in Vancouver from Yokohama, Japan. In other words, an old ship you've probably never heard of and likely don't care about.

2003 Canada Gold $150 Sheep Hologram

Part of the Royal Canadian Mint's tribute to the Chinese Lunar Calendar. There are several different coins in this series. But duuude, that's trippy, whoaaa. Wait, what were we talking about?

2015 Canada Proof Gold Iconic Superman™ Comic Book Covers (#4)

Yeah, you're seeing that. It's not a bird. It's not a plane. Both would actually make more sense on a government-issued coin. But yup, it's Superman.

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