Exchange Rate Logic:
The Goldback® is the world’s smallest mass produced bullion product we know of, with each unit being one thousandth of an ounce of gold. Naturally, splitting a single ounce of gold into a thousand separate, uniquely serialized pieces, costs money in terms of production, labor, and distribution. This isn’t true for gold alone, but for every other material as well — food, steel, lumber, water, etc. The smaller the unit, the greater the cost. A bottle of water for example, may cost 50 cents when sold individually, 15 cents in a package of three dozen, and the same pint of water might cost much less than a single cent from a tap.
An ounce of gold in Goldback form has significantly greater utility than a single one-ounce gold coin, which you can’t spend a thousand times, like the same amount of Goldback gold. So what is a fair premium for such a level of added utility? According to our research, up until 2019, the market would have put about a ~200% - 800% premium on a near one thousandth of an ounce gold product. The Goldback regularly trades at around 100% above spot which is an unprecedented value in the fractional gold space. We are very proud to offer gold currency at such a competitive exchange rate! (See how it stacks up against other fractional ounce gold products)
There are thousands of businesses that will accept the Goldback as payment for goods and services. Most local currencies are pegged to the U.S paper dollar in some way. The Goldback, however, is pegged to the gold dollar. Yes, gold dollars actually exist. The U.S Treasury has produced millions of legal tender, one-ounce gold coins with a $50 stamped face value. So one fiftieth of such a coin equals one gold dollar. The gold content of a Goldback is pegged to this form of legal tender. All Goldbacks may be redeemed for $50 in U.S. Minted Gold Eagles or Buffaloes via our partners at AlpineGold. This can be done in increments of 1,000 Goldbacks for a one ounce coin. We don’t recommend doing this since Goldbacks carry a higher value, this is a guarantee in large part because we don’t want people to feel like they ever need to recover the gold by melting the Goldbacks down. We also believe that this guarantee neatly classifies all Goldbacks as Specie Legal Tender Instruments.
For a more full comparison video of the super fractional gold market check out the video below:
Click on the infographic For a High Resolution Version, In a new window.
Published Average Exchange Rate:
Although Goldback Inc. specifies a gold-dollar exchange rate for the Goldback based on the metrics discussed above, paper dollar rates available at various currency exchange markets may vary depending on a variety of real world economic factors. To help merchants set their Goldback prices for goods and services, we publish the prevailing average exchange rate on our home page.
We determine this by averaging the paper dollar exchange rate for a single Goldback across various published online sources. Goldback dealers receive all Goldback denominations at the same proportionate rates—meaning, if a dealer were to pay $4 for a ‘1’ Goldback, then a ‘50’ Goldback would run them $200. We encourage those seeking to acquire Goldbacks to check around for the best rates.
Goldback Purchasing Power:
In terms of purchasing power, how does the Goldback stack up against other currencies? Since its initial introduction in 2019, the Goldback has seen a 70% rise in its average paper dollar exchange rate. By comparison, during that same period, the gold dollar’s purchasing power rose by about 34%, using the same metric. So whether you were buying your groceries with paper or gold dollars over the past two years, the Goldback would have delivered significantly more purchasing power than the gold dollar and double that amount vis a vis the paper dollar.
Analysis:
The Goldback is an interchangeable currency pegged to the gold dollar. This means that the ‘50’ denomination contains fifty times more gold than the ‘1’ denomination—and should run fifty times as much when exchanged for another currency, such as Federal Reserve notes. Thousands of people actively conduct commerce for goods and services using the Goldback as money on a daily basis.
Unlike other forms of gold, the Goldback isn’t intended for an eventual exchange back to paper dollars. Rather, the intent is that they circulate within local economies as money. If you’ve been looking for easy to use, physical, inflation-proof money, then the Goldback is for you.
Read more about how the Goldback is the cheapest 1/1000th of an ounce gold product here.
* The gold content in a Goldback is actually pegged to the Gold Dollar coinage produced by the U.S Mint. Each 1,000 Goldbacks has the equivalent amount of Gold as a one ounce U.S Minted Gold Coin.