1 Ounce Gold Coins vs Fractional: Which Is Better For You?

Context of Argument

Gold has been valued for thousands of years, with historians tracing its use back to around 3600 BC in Ancient Egypt. Over the millennia, it has become one of the most popular assets for investors, often used as a hedge against inflation and periods of economic uncertainty.

Because gold is internationally quoted in troy ounces, the concept of a coin containing exactly one ounce of fine gold was a masterstroke of simplicity and effective marketing. For many investors, it was the South African 1 oz gold bullion coin that set the standard. First issued in 1967, the series has since sold over 50 million ounces, making it the most traded bullion coin in the world. Because of this, the Kruger has had a number of imitators including the Canadian Maple Leaf, the American Eagle, the Chinese Panda, the Austrian Philharmoniker, the British Britannia, the Australian Nugget, and others.

While one-ounce gold coins remain the most commonly traded among investors, a growing number of both new and experienced individuals are turning to smaller, more accessible options that offer greater flexibility and affordability. In the past, there weren’t as many choices as there are today, but with more world mints now producing fractional gold coins alongside their flagship one-ounce versions, the market has expanded significantly.

Which brings us to a simple question: Should you be investing in fractional gold coins or one-ounce gold coins?

A Summary of Fractional Gold Coins

This section will provide bite-sized summaries of what fractional gold coins are and the different types available.

What Type of Fractional Gold Coins Are There?

Most mints now produce fractional gold coins, making it possible for investors with any budget to buy small amounts of gold. Examples of fractional gold coins include Krugerrands, Eagles, Maple Leafs, Philharmonics, and Kangaroo Nuggets. Common fractional sizes include half-ounce, quarter-ounce, and tenth-ounce coins, though some mints also produce fifteenth-ounce or twentieth-ounce versions. Because fractional coins cost nearly as much to produce as full one-ounce coins, they tend to carry a higher percentage premium relative to their gold content.

For UK investors seeking to be tax efficient offerings, there are a number of fractional UK gold coins available. All of the UK coins listed are exempt from Capital Gains Tax.

• Fractional Britannia Coins
• Gold Half Sovereigns
• Gold Quarter Sovereigns

Pros & Disadvantages of Investing in Fractional Gold

With gold having seen significant gains over the past decade, fractional gold coins offer a practical hedge against inflation without breaking the bank. Even small purchases that align with your portfolio strategy may yield strong returns in the decade ahead.

So what's the benefits?

• Cheaper than 1 ounce gold coins
• Great for new investors
• Fantastic tool for liquidity and ease of trade
• Ensures quick returns when sold during peak gold prices

What's the negatives?

• Higher mark up prices as manufacturing prices are more expensive leading to higher premiums for the consumer
• Smaller coins can wear fast compared to larger coins such as 1 oz gold coins
• 1 oz gold coins and larger coins offer better value per gram than fractional sizes

Smaller vs Larger Sizes

In general it is cheaper to produce larger coins, but they are less convenient for the investor because they cannot easily be split. The same applies to gold bullion bars. One kilo bars are available at lower premiums, but smaller bars give more flexibility. It's difficult to chop off an ounce or so from a one kilo bar.

One ounce coins seem to have won their place as the market favourite, as far as newly issued coins are concerned. However, this does overlook the existence of older "real" gold coins, which are often available at even more favourable prices than the "modern" one ounce coins.

Which Are the Best Buy?

The exact answer depends on a few factors, current market conditions, and size of purchase. At the time we created this page in 2000, for small quantities, Krugerrands were cheaper than sovereigns (in percentage terms relative to their gold content), but for purchases from about 5 or 10 ounces upwards, sovereigns become a better buy in our opinion. Updating this page in December 2017, there are better one-ounce gold coin buys: One Ounce Gold Coins Our Choice - Often these will be Krugerrands, but it could simply be whatever we have a surplus of at the time. We get to keep our stocks balanced, and you benefit from a lower premium. One Ounce Gold Britannias - these benefit from being CGT exempt. 

Speak To Us Before You Buy Gold Coins

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Contact us today and you'll not be disappointed.