Precious metals have been mined for thousands of years all over the world. After being extracted from the earth, these metals must be refined and processed to separate any and all impurities. Once the precious metals have been processed, they can be taken to refineries and mints worldwide to produce bars, coins, or other variations of precious metal products. There are two main types of mints that investors should know about, government mints and private mints.
Government, or sovereign, mints are controlled by the national government in which they operate. The main product these mints produce is coinage. Coins produced at sovereign mints are considered legal tender or otherwise commemorative. Each coin has a face value, enabling its use as currency. For precious metals, the intrinsic precious metal value of the coin usually is more than the face value, so they are rarely used as actual currency. Coins minted at government mints come with guaranteed metal purity and specialized security measures to provide authenticity as needed.
The United States Mint is one of the largest mints in the world. They have production facilities in Philadelphia, San Francisco, Denver, and West Point, with a bullion depository in Fort Knox and headquarters in Washington D.C. Products from the US Mint include mintmarks depicting where the coin was minted. A “P” is from Philadelphia, a ”S” is from San Francisco, a “D” is from Denver, and a “W” is from West Point. One of the US Mint’s most popular programs is the American Eagle, which includes gold, silver, platinum, and palladium coins. Other examples of sovereign mints include the Royal Canadian Mint, Perth Mint, Austrian Mint, Chinese Mint, and Royal Mint. Sovereign mints produce some of the most popular products, like the Canadian Maple Leaf, Austrian Philharmonic, Chinese Panda, UK Britannia, and South African Krugerrand. Sovereign coins usually carry a higher premium over spot price due to their collectibility.
Private mints are owned by companies that produce non-governmental bullion products. The main two categories of products private mints create are bars and rounds. If you would like to learn more about the difference between coins and rounds, read our blog discussing this matter. Since there is no government directing their production, they are able to create products with their own branding and design. There are more variations with private mint products, as they can also be any weight, shape, purity, and metal content. There is still some regulation, as private mints must abide by the standards set by the London Bullion Market Association (LMBA) to be authorized for trading.
There are many prestigious private mints around the world. GoldClub Direct offers products from Credit Suisse, Valcambi, SilverTowne Mint, and others. These mints are well-renowned worldwide and offer great quality bullion at low prices. Private mint products tend to have a lower premium as their standards are not as strict as sovereign coinage.
Should I buy from a government mint or a private mint?
Buying from a sovereign mint vs. a private mint is up to individual preference. Products from a sovereign mint will be a good addition to a portfolio for an investor that is looking for legal precious metal coinage backed by a national government. Products from private mints are well suited for investors who are looking to invest in precious metals with the lowest possible premium. GoldClub Direct stocks products from only the most respected government and private mints.
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