Canadian Gold Maple Leaf Coins
Investing in Royal Canadian Mint Gold Maple Leaf Coins
The Royal Canadian Mint took gold coin investing to another level in 1979 when it introduced Gold Maple Leaf coins to compete with Krugerrands, whose tremendous success had proven a strong demand for gold bullion coins.
Because Gold Maple Leaf coins were .999 fine gold, they achieved instant popularity with gold bullion coin buyers who wanted to invest in pure gold coins. Unfortunately, the purity and the designs of 1-oz Gold Maple Leaf coins have caused them to fall into disfavor with gold bullion coin investors in recent years.
Pure gold is soft, and for that reason gold coins in the Western world have traditionally been alloys, as have been all U.S. gold coins (until the .9999 fine Gold Buffaloes were released in June 2006.) Still, the Royal Canadian Mint wanted its 1-oz Gold Maple Leaf coins to be different from Krugerrands and opted for pure gold coins.
The Problem with Canadian Gold Maple Leaf Coins
The primary problem is that Gold Maple Leaf coins have sharp reeded (milled) edges and a clear "field" alongside Queen Elizabeth's image. When Gold Maple Leaf coins are taken out of their tubes (1-oz Gold Maple Leafs come ten coins to a tube.), it is extremely difficult to get them back in their tubes without scratching.
It is not realistic to suggest that people investing in Gold Maple Leaf coins never remove the coins for inspection, for then investors would be "buying a pig in a poke." When gold coin investors lay out thousands of dollars, they want to inspect their gold-and rightfully so.
Compounding the problem is that some gold coin investors do not realize that scratching Canadian Gold Maple Leaf coins lowers their values. Consequently, some Gold Maple Leaf coins get really beat up. Not only are Canadian Gold Maple Leaf coins easily scratched, if they are dropped on a hard surface a rim "ding" is guaranteed. Gold Maple Leaf coins are falling into disfavor with dealers for another reason.
In 1983, the Royal Canadian Mint switched to .9999 fine gold for Gold Maple Leaf coins. This may sound like a better deal for Gold Maple Leaf coin buyers, but the change was so insignificant that the Royal Canadian Mint did not even increase prices for Gold Maple Leaf coins.
There is almost an immeasurable difference between .999 fine gold and .9999 fine gold, but you cannot tell that to gold coin investors who want pure gold coins. The .999 fine Gold Maple Leaf coins sell at lower markups than .9999 fine Gold Maple Leaf coins.
Because of the ease with which Gold Maple Leaf coins are damaged, each Gold Maple Leaf coin sold back into the market has to be inspected not for only for damage but also date, to distinguish between .999 fine coins and .9999 fine coins. Then the dealer doing the inspection has to decide what to do with the coin, ship it to another buyer (who may complain about the scratches) or send it to a refinery.
Even when Gold Maple Leaf coins come back in perfect condition, they have to be inspected. This creates a lot of unnecessary work in an industry that works on a razor-thin margin. Consequently, some dealers are now bidding back of spot for 1-oz Gold Maple Leaf coins, knowing that any 1-oz Gold Maple Leaf coins that come in may end up being sent to a refinery.
Canadian Gold Maple Leaf Coins Premiums
Premiums on new 1-oz Gold Maple Leaf coins range from as low as 4% for large purchases to about 7% for small orders. CMIGS' minimum first time gold order is five ounces.
Gold Maple Leaf coin premiums mostly are determined by the Royal Canadian Mint and its wholesale distributors. Previously owned Canadian Gold Maple Leaf coins carry smaller premiums. Actual markups for Gold Maple Leaf coins depend on quantity, gold price volatility, and availability.
CMIGS fears that 1-oz Gold Maple Leaf coins are headed for Krugerrand status, where they are bought and sold because they contain one ounce of gold. Actually, Canadian Gold Maple Leaf coins may be headed for sub-Krugerrand status. Being alloyed with copper, Krugerrands do not damaged easily, and they are readily accepted in the secondary market. Scratched and damaged 1-oz Gold Maple Leaf coins rarely are accepted by gold bullion coin investors, and fewer dealers want to handle Gold Maple Leaf coins.
People investing in pure gold coins have other choices. The Perth Mint offers several pure gold coins at the same prices as new Gold Eagles. Further, The Perth Mint encapsulates each coin in a hard plastic case, which does a great job of protecting against damage.
In fact, CMIGS' number one recommendation is the year 2006 1-oz Gold Dog, which is the eleventh coin in The Perth Mint's Lunar Series. Additionally, gold investors wanting to invest in pure gold coins now have the option of investing in the new .9999 fine U.S. Mint Gold Buffalo coins.
If you would like to discuss investing in Canadian Gold Maple Leaf coins, or any aspect of investing in gold, call 1-800-528-1380. We take calls 7:00 a.m. to 5:00 p.m. Mondays through Fridays.
The minimum orders for bullion purchases at CMIGS are five ounces of gold, platinum, or palladium, or 300 ounces of silver. Orders up to $20,000 may be accepted without a deposit. Usually, payment by bank wire transfer is required for large orders. Sometimes, a deposit may be required before prices are locked in for large orders. See Doing Business With CMIGS.
