Bullion investors have a world of physical products to choose from. There are dozens of national mints and private metal refiners that produce coins, rounds, and bars from silver and gold. Given all of the options available to you, you may not immediately know which is best for your personal investment goals.
Learning which bullion products are out there and which ones are the safest bets for investors is an important part of your due diligence. You should always research before investing in a new asset. We’re going to make you’re job easier by digging into what makes the Canadian Maple Leaf coin one of the best bullion investments in the world.
There is no shortage of bullion products popular among investors. Some of the world’s most popular precious metal coins include the American Eagle, South African Krugerrand, Austrian Philharmonic, Britannias, Australian Kangaroos, Chinese Pandas, and Mexican Libertads. However, one of the most popular is made right here in Canada: the Canadian Maple Leaf.
If you’re looking for a source for gold bullion to include in your portfolio, you can’t go wrong starting with the Canadian Gold Maple Leaf.
Why Are Canadian Maple Leaf Coins So Popular?
Investors appreciate the Canadian Gold Maple Leaf (and its silver counterpart) for its purity, trustworthiness, and global recognition. Issued by the Royal Canadian Mint, standard Gold Maple Leaf Coins are 99.99% pure gold, a high degree of fineness competitive with the best in the global market. It also comes with advanced security features, and it’s one of the most easily traded coins in the world. With a strong reputation worldwide, the Gold Maple Leaf provides a reliable way to store and preserve wealth in uncertain economic times.
#1 Canadian Coins Are Known for Purity and Quality
Refining metals to the highest fineness is not easy. When gold ore is extracted from the earth, it contains a number of impurities, including silver, iron, and zinc. While some gold materials, such as jewellery, use large quantities of alloys to give the precious metal more strength and durability, higher-quality bullion means higher purities. Thus, impurities have to be removed to create bullion through gold processing.
There are two primary methods of purifying gold. The Miller process uses gaseous chlorine to remove impurities. The majority of impurities found in gold will combine with gaseous chlorine before gold does. The process involves melting down the gold and blowing the gaseous chlorine into the liquid. The resulting chloride compounds form a separate layer that can be removed. This method is fast and simple but only produces gold that’s up to 99.5%.
The Wohlwill process is more complicated, relying on electrolysis to produce gold that is up to 99.99% pure – the same purity as the Canadian Gold Maple Leaf, as well as some other coins produced on the international stage.
However, the Royal Canadian Mint is capable of producing 99.999% gold, and it is the only mint in the world to do so. Such products are rarer than your standard Maple Leaf coins, and they come at a premium, but it’s a process that has cemented the Mint’s reputation.
#2 Global Recognition and Liquidity
The Canadian Gold Maple Leaf is one of the most widely recognized gold coins in the world, making it a preferred choice for investors looking for easy entry and exit in the gold market. People trust Canadian bullion coins as much as if not more than, any other bullion product in the world. The mint has a reputation for high-quality products and producing coins that are tough to counterfeit, meaning these coins always have a ready market.
Liquidity in gold investing refers to how quickly and efficiently an asset can be bought or sold without significantly impacting its price. Low liquidity assets can only be moved quickly if the transaction comes with a steep discount. Because the Gold Maple Leaf is widely recognized and trusted by dealers globally, there is always a strong market for it. This allows investors to sell at competitive rates, often with smaller bid-ask spreads compared to lesser-known bullion products, ensuring efficient conversion to cash.
#3 Advanced Security Features
The Royal Canadian Mint is a world leader in security features for bullion coins. They have made spotting counterfeit coins of their products easier than ever with a fool-proof system for determining the authenticity of their coins. Their anti-counterfeiting system has three features:
- Radial lines: These lines are machined across each coin’s surface with micron-level precision to create a pattern unique to each coin.
- Security marks: Micro-engraved marks are created with laser technology, creating fine details that can only be identified under magnification.
- Bullion DNA: The crown jewel of the Royal Canadian Mint’s security technology, Bullion DNA is a technology that allows anyone with a Bullion DNA reader to immediately scan and authenticate any Gold or Silver Maple Leaf manufactured after 2014.
#4 Availability of Multiple Sizes
The Canadian Gold Maple Leaf coin is available in several sizes to cater to different investment preferences and budgets. Commonly available sizes include 1 oz, 1/2 oz, 1/4 oz, 1/10 oz, and 1/20 oz. Some of these options maintain the same 99.99% purity, while others are only 99.9%. All feature the iconic maple leaf design.
The variety in sizes provides flexibility for investors, allowing you to choose a coin that fits your investment goals. As a general rule, bullion is cheaper per ounce when you buy in higher quantities. However, smaller fractions can make gold more accessible on a budget. When you’re buying physical bullion, you can’t buy half a coin when you only have half the available budget to invest, so fractional coins can make investing easier.
#5 Government-Backed Trust and Security
One of the reasons investors prefer coins over bars is their reliability. Coins can only be produced by state-owned and operated mints. These are the same institutions that produce fiat currency for entire countries. They’re highly secure, reputable institutions.
That’s not to say that private refiners can’t be trusted. Many of them are trusted around the world. Leading brands like Valcambi, Asahi, Heraeus, Baird & Co., and PAMP Suisse established themselves as reputable manufacturers of bullion products.
Are There Tax Advantages for Canadian Investors?
When it comes to taxes, the more you know about investing, the better. One of the key tax advantages of buying precious metals in Canada is that investment-grade gold and silver are exempt from GST/HST.
The Canada Revenue Agency has minimum purity standards for precious metals to qualify. Gold products must be 99.5% or higher and silver must be 99.9% or higher to qualify for the GST/HST exemption. These minimums are important if you’re looking at certain other popular coins. For example, neither the American Gold Eagle nor the South African Gold Krugerrand qualify. They are both 91.67% gold, which improves their durability and affects their appearance, but also means that they are subject to HST.
When bullion is sold for a profit, any gains are taxed as capital gains, rather than being fully taxed as regular income. Only 50% of capital gains are included in taxable income, meaning that an investor is only taxed on half of their profit at their marginal tax rate.
By taking advantage of precious metals exemption from GST/HST at the point of purchase and the capital gains tax in the year that you sell, investors can enjoy a cost-efficient way to protect and grow their wealth through bullion.
However, there is no tax advantage to buying the Canadian Maple Leaf compared to other gold coins or bars that meet the CRA’s minimum purity standards for tax exemption.
Coins with Collector’s Appeal: Learn the Art of Collecting
Before you start hunting for collectible coins, be clear about your goals. Investing in bullion and collecting coins are two separate activities. Investors have one goal in mind: maximizing the returns from their portfolio, and using bullion as one asset among many to achieve that.
Collectors approach bullion with a very different mindset. They will largely be interested in coins and rounds (bullion that is round and coin-like in appearance, but made by a private refiner rather than a sovereign mint) with unique designs, historical circulation coins, designs that commemorate a special occasion, and very rare coins (these often have some kind of story attached to them, such as a misprint or error). The collector is not as opportunistic as an investor, and while they may seek out additions to their collection that will rise in value over time, they are not as concerned about the fluctuating spot price of silver or gold.
Should collectors be interested in Canadian Maple Leaf coins? That depends on your goals. The Royal Canadian Mint regularly issues commemorative coins that recognize some kind of historical event, Canadian flora and fauna, or even pop culture. These are unlikely to gain much collectible value in your lifetime, and they cost more than standard-issue Maple Leaf coins. Collectible coins that are worth significant amounts of money are already in high demand from collectors. They’re hard to find, and you’re not the only one looking for them.
However, if you love the design or you feel a connection to the event being commemorated, you should go ahead and buy it. Collecting is a fun and rewarding hobby. Just don’t mistake it for investing.
Canadian Gold Maple Leaf coins are some of the best investment-grade coins out there, and we’re lucky to have easy access to them here in Canada. If you’re trying to find a reliable bullion dealer with a large stock of Canadian Gold Maple Leaf coins, look no further than Global Bullion Suppliers. We’re your trusted source of bullion investments and provide competitive, up-to-the-minute pricing. In addition to buying and selling bullion, we can also help you learn about the investment benefits of gold and silver and how to store and insure bullion with a consultant for first-time investors. Get in touch today to start your journey into gold.