Today, you can buy pre-1933 gold coins as collectibles or long-term investments. These coins were once circulating money, including $2.50 quarter eagles, $5 half eagles, $10 eagles, and $20 double eagles.

There are many good reasons that gold coins have been used as money throughout history.

One reason stands out: It gave all countries a common standard to measure the value of their currencies against.

1911 s saint gaudens gold double eagle

1911-S Saint Gaudens gold double eagle.

When Gold Was Money and Money Was Gold

Accordingly, gold coins of the same weight and purity had the same purchasing power anywhere in the world. This was true even though the coins may represent a different amount of currency in each nation.

As an example: International trade and payments between governments were always conducted in gold or sometimes silver.

Most gold coins used the same purity standard of .900 fine gold. In other words, a typical gold coin was made of 90% pure gold. Today you will only see 99.9% pure gold coins categorized as "investment-grade" gold.

Using precious metals for transactions both large and small made sense.

Paper banknotes and all forms of credit are only a promise. In all cases, gold was the fulfillment of that promise.

Why would the Treasury of any government accept something besides the real thing?

All of this meant that gold helped link together economies around the world. It was the stable and immutable basis upon which economic growth and activity were measured.

Why Did All of the Gold Coins Disappear?

It has been many decades, and in some cases almost a century, since gold coins were issued as circulating legal tender by any of the world's governments.

It is telling that most people today have never held a real gold coin. You probably wouldn't recognize a $20 Liberty double eagle if you saw one!

coronet liberty head double eagle gold twenty d no motto

The "Coronet" or Liberty Head double eagle gold $20 coin.

The world financial system was in many ways less organized and less sophisticated during the 1800s and early 1900s than it is today. This is stating the obvious.

However, one thing tied this global system together in relative harmony: Gold.

The world operated on a gold standard where different currencies could be measured against one another based on how much gold they represented.

Specifically, most countries used a gold specie standard. This meant that the local currency could be converted into a specific amount of gold in the form of coins at any time.

Moreover, gold and silver coins were freely spent in the normal course of commerce.

The onset of two world wars and the Great Depression in the first half of the 20th century put an end to the gold specie standard.

War debt makes an honest gold standard virtually untenable. Governments have too many incentives to inflate away their debt burdens through currency devaluation.

Although a modified gold standard replaced the previous system for the thirty years following the end of World War II, gold coins were no longer part of the monetary system.

What Is Pre 1933 Gold?

This is what makes the year 1933 so important in numismatics. It marks the last time any gold coins were produced for regular commerce in the United States.

Later that year, one of the first actions taken by newly-elected President Franklin Roosevelt was to declare a bank holiday and order the confiscation of all privately held gold. The U.S. government literally outlawed possession of gold by executive decree.

Several countries had already halted production of gold coins beforehand, as the United Kingdom did in 1925. Once the U.S. stopped minting gold coins in 1933, it caused everyone else to follow suit.

gold sov

The Gold Sovereign was the flagship gold coin of the United Kingdom.

This is where the idea of "pre-1933 gold" came about. It's essentially the cut-off point between the era of gold coins and today.

It was a time when gorgeous designs appeared on coins, like the $20 Saint-Gaudens double eagle, the $5 Indian Head half eagle, or the $10 Indian gold eagle.

Shop for pre-1933 gold coins from the United States and around the world

The Role of Gold In the Bretton Woods System

There was, however, a system used during the transition from a true gold specie standard to the modern regime of free-floating fiat currencies.

It was put into place in 1944 through the Bretton-Woods Agreement. Hence it came to be called the Bretton Woods system.

Bretton Woods was the modified gold standard mentioned earlier. You might think of it like an indirect gold standard.

The system was based on the U.S. dollar, which was theoretically still convertible into gold (just not gold coins).

The arrangement only functioned because the United States owned the vast majority of the world's gold when the dust cleared after World War II. By some estimates, the U.S. held almost 70% of all the known gold in existence (at the time) by the middle of the 20th century.

bretton woods

A photograph from the Mount Washington Hotel in Bretton Woods, New Hampshire. The conference was held in July, 1944.

America was also the overwhelmingly dominant military power in the wake of a devastating war.

The rest of the traditionally powerful nations had few alternatives but to agree to such a system.

Bretton Woods also initially worked because the U.S. was providing approximately half of the entire world's manufacturing capacity during the postwar economic boom.

Thus the American dollar underpinned a huge portion of global commerce in the period that immediately followed.

The dollar was also backed by a huge stockpile of gold -- perhaps 20,000 metric tons of the precious metal.

As a result, other currencies were essentially pegged to the value of the U.S. dollar. In turn, dollars were the only currency that could easily be converted into gold by central banks.

The Nixon Shock and the Death of Bretton Woods

A number of nuanced economic factors began to cause this monetary system to erode and eventually collapse.

The dollar's fairly steady exchange rate with gold made it the primary reserve currency for central banks all over the world.

Yet as economic conditions improved (especially in Japan and Europe) during the 1960s, it became difficult for the U.S. to maintain a healthy balance sheet.

Running balance of payments deficits in the U.S. offered global liquidity and encouraged faster economic growth abroad. Paradoxically, it meant that over time the dollar would lose stability.

The only mechanism for propping up the system in the face of this deficit problem was manipulation of the gold price.

This could be accomplished by selling large amounts of gold on the open market to suppress prices, but this "solution" was short-lived.

Ultimately, the crisis culminated in 1971 when President Richard Nixon unilaterally ended the U.S.-guaranteed convertability of the dollar into gold.

The momentous decision is informally referred to as "closing the gold window."

nixon shock

President Nixon announced the suspension of dollar convertibility to gold in a nationally televised address on August 15, 1971.

The shorthand "Nixon Shock" caught on because the president acted without consulting any advisers or the American-dominated international monetary institutions such as the World Bank or International Monetary Fund (IMF).

Within a few years, every advanced economy in the world had decided to allow the exchange rate of their respective currencies to float freely.

Follow the link to read more about the Nixon Shock and the end of Bretton Woods.

Gold Coins Are Insurance Against Another Systemic Disruption

In the time since Bretton Woods ended, the global monetary and financial system has become dramatically more complex.

Crises and recessions are commonplace. Speculation in the foreign exchange markets is rampant.

During the same period, gold prices have gone up enormously on the free market.

Although it again became legal to own and trade gold in the United States after Bretton Woods, the use of gold coins in commerce has never returned.

Instead, investors can buy and sell the old pre-1933 gold coins that escaped confiscation and melting.

Fiat currencies are only maintained through government decree. They rely upon tenuous international agreements and ever-increasing debt. This is not a durable foundation.

Buying physical gold is the safest and most convenient way to protect yourself from yet another financial crisis or disruption to the economic system.

Listen to podcast episodes about old gold coins and the Gold Standard from Gainesville Coins:

Death of the Gold Standard

The Durable Ethics Behind the Gold Standard

The Half Union: The $50 Gold Coin You've Never Heard Of

Is Gold Confiscation Really Coming?

Who Owned the Most Gold In History?

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Everett Millman

Everett Millman

Managing Editor | Analyst, Commodities and Finance

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in Reuters, CNN Business, Bloomberg Radio, TD Ameritrade Network, CoinWeek, and has been referenced by the Washington Post.