Gold certificate—what is it?
Until 1934, the gold certificate had U.S. money counterparts that proved gold ownership.
Understanding Gold Certificate
Gold certificates were legal money and valued in U.S. dollars during the gold standard. Investors still receive gold certificates to prove bank-stored gold ownership.
The US left the gold standard in 1933. Collectors collect U.S. Mint gold certificates. Gold certificates on eBay cost $10–$200 or more, depending on age, rarity, and quality.
Gold certificates, like stock certificates, reflect ownership of a certain amount of gold. From 1879 until their abolition, the certificates were worth the same as U.S. cash.
Gold bullion is hard to transport and trade. Gold certificates made gold ownership and usage practicable. Gold certificates still show ownership of the indicated quantity of gold to investors.
U.S. gold certificates resemble paper banknotes from the same era, with some differences. Most had bright orange backs and a gold U.S. seal on the front; however, designs varied.
A 1907 $1,000 gold certificate bears the denomination in all four corners but “IN GOLD COIN” underneath a picture of Alexander Hamilton. The front features a gold seal and serial number, and the rear is orange.
Americans used gold certificates until 1933, when President Franklin D. Roosevelt lifted the currency from the gold standard. Between 1879 and their phaseout, the certificates were theoretically exchangeable as money because the dollar’s value was related to gold. However, they were rarely utilized in everyday transactions.
Gold and stock certificates establish ownership of gold and firm shares, respectively.
Gold Certificates Today
Some U.S. and foreign banks and financial firms issue gold certificates. These usually say ounces. The market affects their financial worth. That makes them precious metal investments, not currency investments.
Modern gold certificate trading is dangerous. Like bankrupt stock certificates, the certificate is useless if the issuing firm fails.
Conclusion
- From 1879 until 1934, when the U.S. abandoned the gold standard, gold certificates had the same face value as dollars.
- US gold certificates are now collectible exclusively.
- Some banks and corporations offer gold certificates to prove ownership of a given quantity of metal.
