Considering that gold is trading north of $600, one has to ask how it is possible to buy cheap gold. After all, in late 2005 gold traded at $460, and in 2001 gold traded below $300.

What we are talking about is buying low-premium gold bullion coins, favorites of seasoned gold bullion investors. Premiums are also called markups. All gold bullion coins sell at premiums over spot.

In the U.S. gold market, the 1-oz American Gold Eagles are the standard by which all modern gold bullion coins are measured, and other gold bullion coins are commonly quoted at premiums or discounts to Gold Eagles. The venerable Krugerrand is a good example. Currently, Krugerrands are selling at $13 to $15 discounts to Gold Eagles.

South Africa introduced the Krugerrand, the first gold bullion coin to contain exactly one ounce of gold, in the 1970s, when inflation was running rampant, with rates hitting 13%, and the prime rate topping 21%. Further, the Cold War was still hot, with the Russians having rolled into Afghanistan. Of the fifty million Krugerrands sold, probably half were sold in the United States, possibly more.

The South Africans for the most part had the U.S. market to themselves. The Canadian Maple Leafs would not be introduced until 1979, and the American Gold Eagles not until late 1986. It was in 1985, however, that the South Africans ran into a major roadblock.

The U.S. Congress banned the importation of Krugerrands, as a slap on the hand of white-ruled South Africa. The ban lasted ten years, until 1995 after Nelson Mandela had been elected South Africa's first black President, in an election in which black South Africans were permitted to vote for the first time.

By time the ban was lifted, American Gold Eagles had become the dominant gold bullion coins in the United States, and they remain the most popular gold bullion coins in the U.S. (However, the U.S. Mint's new Buffalo Gold Coins, introduced in June 2006, out-sold Gold Eagles in 2006. In 2007, we will learn if the Gold Buffs are to become the best selling gold bullion coins in the U.S.)

The introduction of the 1-oz gold Krugerrand was a brilliant move for the South Africans, coming at just the right time. However, that was then, and this is now.

Today, Krugerrands are no longer promoted, and the cost of manufacture has fallen out of their price, and they sell at small premiums over spot gold, a premium that simply reflects gold in a useful, recognized form.

Other recognized low premium gold bullion coins include the Austrian 100 Coronas and the Mexican 50 Pesos. Austrian 100 Coronas contain .9802 ounce of gold, and the Mexican 50 Pesos are the largest readily-available gold bullion coins on the market, containing 1.2057 ounce of gold.

The Austrian 100 Coronas and the Mexican 50 Pesos were never promoted as the South Africans promoted the Krugerrands and as the U.S. Mint promotes its Gold Eagles. The Austrian 100 Coronas and the Mexican 50 Pesos are restrikes, officially issued reproductions of formerly circulating coins.

Investors wanting cheap gold cannot go wrong picking one of these three cheap gold coins. Krugerrands, however, are better known than either the Austrian 100 Coronas or the Mexican 50 Pesos. Consequently, the 100 Coronas and the 50 Pesos are often available at slightly smaller premiums than Krugerrands.

Although the 100 Coronas and the 50 Pesos are not always available in large quantities, investors wanting low premium gold coins should inquire about the 100 Coronas and the 50 Pesos when looking to buy cheap gold.