Gold Certificate

DEFINITION of 'Gold Certificate'

A physical document resembling a paper bank note that entitles the holder to a specified value of gold. Because gold bullion is difficult to transfer and store, gold certificates facilitated the ownership and use of gold when it was legal currency. Gold certificates were in general circulation in the United States and used as money from 1882 to 1933.

BREAKING DOWN 'Gold Certificate'

The United States government under President Franklin D. Roosevelt made gold certificates, as well as the possession of gold in any other form except jewelry, illegal in 1933 when the U.S. went off the gold standard. About 30 years later, gold certificates became legal again, and they have been prized by collectors ever since, but they are not legal tender. The highest denomination of gold certificate ever issued was for $100,000, but it was only used as an accounting tool within the Federal Reserve. One such note belongs to the Smithsonian collection at the National Museum of American History.

RELATED TERMS
  1. Short Gold ETF

    An exchange traded fund that seeks to profit from negative changes ...
  2. Digital Gold Currency - DGC

    An electronic, private currency backed by gold bullion. Companies ...
  3. Gold Reserve Act Of 1934

    An act that took away title to all gold and gold certificates ...
  4. Gold Bull

    A slang term for a market or investor who is bullish on gold. ...
  5. Gold Bug

    An individual who is bullish on gold. Gold bugs believe that ...
  6. Gold Fund

    A mutual fund or exchange-traded fund (ETF) that invests primarily ...
Related Articles
  1. Options & Futures

    Does It Still Pay To Invest In Gold?

    This asset's appeal dates back thousands of years. Find out whether it can live up to the hype.
  2. Options & Futures

    Why Gold Matters

    Gold is a very useful investment during periods of instability and high inflation.
  3. Mutual Funds & ETFs

    4 Ways You Can Invest In Gold Without Holding It

    Owning gold can be a store of value and a hedge against unexpected inflation. Holding physical gold, however, can be cumbersome and costly. Fortunately, there are several ways to own gold without ...
  4. Options & Futures

    Getting Into The Gold Market

    Add some sparkle to your portfolio by getting in on this classic commodity.
  5. Options & Futures

    Why Gold's Price is More than 'Supply and Demand'

    The price of gold is moved by a combination of factors. But the way they work together is sometimes counterintuitive.
  6. ETF Center

    The Gold Showdown: ETFs Vs. Futures

    ETFs and gold futures are two ways to diversify into the metals asset class, but there are advantages and disadvantages to both instruments.
  7. Investing

    Why is Gold a Counter Cyclical Asset?

    Gold is widely considered a safe haven during market turbulence. History has proven gold performs counter cyclically to the state of the U.S. economy.
  8. Options & Futures

    Why Gold Is No Longer the Currency King

    Although a gold standard seems like a good idea, looking at its role in U.S. history reveals that it may not be the beacon of stability that it claims.
  9. Mutual Funds & ETFs

    The Relationship Between Gold and Gold ETFs

    Here's how the price of gold ETFs corresponds to the price of actual gold.
  10. Mutual Funds & ETFs

    Investing in Gold: Direct Vs. Professional Management (ABX, GG)

    Find out how you can access the gold market through common stock, futures contracts, and actively managed or passively managed ETFs and mutual funds.
RELATED FAQS
  1. What was the Gold Reserve Act?

    The Gold Reserve Act of 1934 gave the government the power to peg the value of the dollar to gold and adjust it as it pleased. ... Read Answer >>
  2. What are the primary factors that drive prices in the gold industry?

    Find out about the factors that drive gold prices, such as interest rates, the stock market, demand and supply, and the value ... Read Answer >>
  3. For investors, what are the alternatives to owning physical gold?

    Learn some of the primary alternate ways that someone can invest in the gold market besides simply purchasing physical gold ... Read Answer >>
  4. What is the gold standard?

    The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. With ... Read Answer >>
  5. Has gold been a good investment over the long term?

    Examine the performance of gold as an investment, dating back to 1933, when President Roosevelt required all gold bullion, ... Read Answer >>
  6. How can I track gold prices?

    Learn how to track gold prices. Gold is a commodity traded as a physical asset and a futures contract. The one you track ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center