The Treasury's first gold auction since 1975 is scheduled for May 23. A total of 1.8 million ounces will be offered in six monthly sales, the minimum purchase being a 400-ounce bar.

If past experience and present policy hold true, much of this gold will be sold for dollars to foreing central banks. Although most Americans will be happy to have the dollar shored up abroad, a few are worried about selling off more of America's precious metal in exchange for paper. They would take little comfort in knowing that, at the rate of 300,000 ounces a month, it would take 77 years to empty Fort Knox.

Since possession of bullion was legalized in 1975, Americans have become increasingly aware of gold as a hedge against inflation. The most popular form of physical possession among small investors is the South African Krugerrand. Last year people in this country bought approximately 1.1 million of these coins, containing one Troy ounce each. Sales for the first quarter of 1978 equal half of 1977's total.

Why should not the United States produce an American version of the Krugerrand? two U.S. legislators have asked. "There is no reason why Americans who want to buy gold bullion coins should have to buy a foreign coin; there ought to be an American coin that would be attractive to investors," declared Rep. Steven Symms (R-Idaho). In an appeal to patriotism as well as an attempt to keep more of America's gold within her shores, he and Sen. Jesse Helms (R-N.C.) last month introduced identical bills to require the government to sell part of the first 1.5 million ounces of gold it puts up for auction in each year in the form of one-ounce and half-ounce gold coins.

The proposed one-ounce coin would bear the likeness of the Statue of Freedom atop the Capitol dome and the word "Freedom." In place of the monetary value would appear "One Ounce Fine Gold." The obverse side would have a represention of the Great Seal of the United States and the words "United States of America" along with the date of production. The half-ouncecoin's design has not yet been fixed, but its supporters would like the words "Human Rights" on its face.

The Treasury's deputy director for gold market activists, Jerry Nisenson, said his department was looking at the proposal carefully. At the same time, he reiterated the Treasury's long-standing opposition to making gold legal tender again after 45 years. Of course, a coin without a dollar denomination would not be the same as the $5 or $20 gold piece of yore. In fact, a round flat object with the value marked only by weight is not a coin of the realm but a medallion in the U.S. government's eyes. This is not so in South Africa, where the Krugerrand is considered legal tender.

There is also the more pragmatic question of inconvenience. Nisenson said there were proposals at the time possession was legalized that the Treasury produce wafers. However, it decided there was no reason to go to the expense of producing and marketing these if the private sector would do so.

A number of private mints turned out small bars, wafers and other forms of bullion. Though they still are being sold, their popularity is small compared with the Krugerrand, which benefits from a $4 million annual advertising campaign. Many banks, brokers and coin dealers have stopped selling wafers and bars because there is not enough profit in them to offset high security costs. But the primary reasons seem to be collectors' lack of interest and the need to recertify their weight and purity. This is to prevent dishonest persons from shaving off lead bars. No such procedure is required for coins.

Since bullion was legalized there have been several private attempts to mint gold-coin-like medallions. Engelhard Minerals and Chemical Corp. of New York test-marketed its American Prospector for two years. With no advertising and only one outlet in Rockefeller Center, the company sold 20,000 of the one-ounce pieces. The premium was 3.5 percent over the price of gold compared with the 6 percent to 7 percent premium attached to a Krugerrand. The project was abandoned this year because it fell outside the company's normal industrial operations, according to an Engelhard employe. Outsiders say Engelhard didn't want to spend the money on intensive advertising.

Yet other reasons for the American Prospector's withdrawal indicate how investors might react to the coin proposed by Helms and Symms. The Engelhard employe, who asked not to be identified because his company has not made the information public, said comments from those buying the Prospector indicated they preferred a 24 karat piece or pure gold piece, bright yellow in hue, instead of the 22-karat Krugerrand, which is slightly copper-colored. But most of all, he said, customers wanted to see the words "Minted in U.S.A." on the coin. "This was a big selling point," he concluded.

According to coin dealers, some of the popularity of the Krugerrand in this country may be traced to the myth - at least among novice investors - that it is minted by the South African government (and therefore will always be honored). The Krugerrand is minted by the Chamber of Mines, a trade organization representing gold producers, and destined primarily for export. A customer can use a Krugerrand to make a purchase in South Africa - provided he can obtain the coin. A South African now living here told of having his name on a bank's waiting list for three months.

Since legalization of bullion, the U.S. government has minted a number of gold medallions in limited editions for public and private use. The largest was the Bicentennial issue. A total of 36,500 gold medals weighing 25,000 ounces and costing nearly $7 million were sold. Far more silver and bronze medals were sold due to the high prices of gold. The three-inch medal containing 13.6 Troy ounces cost $4,000, while the smallest, containing 0.37 ounce, cost $100. That works out to $276 an ounce for gold, or a premium of about 50 percent to 100 percent depending on the price of gold that year. At these prices, it is easy to see why the U.S. Treasury would have little interest in mass minting a coin to compete with the Krugerrand.

Thus far the Helm-Symms bill has evoked little interest on Capitol Hill. But Symms is undaunted. "All indications are that there is a demand for bullion coins of this type by the American people," he said inan introductory statement.