6

If you're going to keep some money in cash, is there any downside to keeping it in gold coins that you can buy at their face value, where that face value is higher than the metal value?

I came across this €1000 coin, which can actually be bought for €1000. It contains 17 grams of gold, worth about €600 today. Is there any downside to this over keeping €1000 in regular banknotes? (Other than the practical challenges of getting a bank to accept it, I guess.)

The potential upside is, of course, that the metal may eventually be worth more than the face value. (Of course, if you're keeping many of these for a long time there would be some storage costs, like with any physical metal.)

Improve this question
6
  • The main downside I can think of vs banknotes is that you can't easily spend it. You'd have to exchange it at a bank for smaller denominations that merchants will accept. Compared to a single €1000 banknote however, there is not really any downside, it's certainly more durable, which is a good thing.
    – CactusCake
    Commented Aug 23, 2017 at 12:27
  • I'd be careful with 'face value' - it just means the coin shows that number on it. This could well be some worthless collectible where you struggle to find anyone paying you just the 'gold value' for it.
    – Aganju
    Commented Aug 23, 2017 at 12:52
  • 1
    @Aganju the key terminology here is "legal tender" and "circulated" (or "uncirculated"). All legal tender is worth its face value for repaying debts, meaning a creditor cannot refuse such a coin as settlement for a debt. In real life however, currency is more often used for immediate transactions, not settling debts, and in that situation a merchant is allowed to refuse any method of payment that they don't like, for any reason or no reason at all. Circulated coins are generally acceptable though, and even uncirculated coins can still be accepted, but it's at the merchant's discretion.
    – CactusCake
    Commented Aug 23, 2017 at 13:08
  • @CactusCake , i am well aware of that. Legal Tender is not mentioned in the offer. Not Circulated has no meaning, as any collectible is not circulated when you buy it. I just warned the OP, face value means nothing - I can write '1000 Euro' on a piece of paper and declare it has a face value of that.
    – Aganju
    Commented Aug 23, 2017 at 17:58
  • What do you mean "practical challenges"? Either it's money, or it's not. There is no "challenge" that will make a bank take something that is not money. Gold is not money. Also not money is a Beanie Baby or this overpriced collectible. Have you ever tried actually selling collectibles? If you want to learn collectibles trading, start ...smaller...
    – Harper - Reinstate Monica
    Commented Aug 24, 2017 at 2:16

1 Answer 1

Reset to default
6

I came across this €1000 coin, which can actually be bought for €1000. It contains 17 grams of gold, worth about €600 today. Is there any downside to this over keeping €1000 in regular banknotes?

These are bullions / medallions / collectibles / Non Circulating Tenders or whatever name one wants to call it. A coin has a value because the Central Banks says so that enforces everyone accept it at that.

This as such is not a coin. Banks or anyone else will not accept this for face value.

These are of numismatic interest and certain people do collect such items. They are collectibles to the extent the price is dependent on general interest in future on such items and quantity available. So if future the price may go up much higher than the gold price or may retain its gold price.

Mints make these with intricate design, best finish, limited quantity to charge the additional premium.

If you are not into numismatics, stay away, a better options is buy simple gold bullion of similar weight for actual gold price.

Improve this answer
9
  • 2
    So that coin is not legal tender, basically? If so, it seems like a borderline scam for them to call it a "1000€ Face value coin"!
    – EM0
    Commented Aug 23, 2017 at 13:16
  • 2
    @EM0 It looks like coins minted at Monnaie de Paris are legal tender, but you should definitely familiarize yourself with what that term means and, perhaps more importantly, what it doesn't.
    – CactusCake
    Commented Aug 23, 2017 at 13:27
  • 2
    Note that in the US, even coins listed as having a "suggested value" on the face and not showing any resemblance to actual US coins have been confiscated with the creators charged with Counterfeiting. I have no idea what the EU law or practice on the issue is.
    – user42405
    Commented Aug 23, 2017 at 13:30
  • 1
    @CactusCake That's interesting. How did you confirm that they're legal tender? And if they are, OK, obviously a sandwich shop can refuse to accept a €1000 gold coin (indeed, I'd be very surprised if they accepted it!), but can a French bank (that ordinarily allows cash deposits) refuse to accept it?
    – EM0
    Commented Aug 23, 2017 at 14:55
  • 2
    @EM0 Yes, there is at least one French bank that will exchange them for you; see "Collector Coins" on page 4 of this document. The rest of the document also discusses "Legal Tender".
    – CactusCake
    Commented Aug 23, 2017 at 15:03

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .