US Mint Gold Coins and Avoidable Scams

Back in July 2011, based on the sudden spurt of growth in spot gold prices, respected economists like Paul Krugman suggested simplistic assertions such that gold is a bubble that is bound to burst soon. They based these assertions on the understanding that gold prices have risen to record nominal highs due to retail gold dealers in the US engaging in a “marketing scam” trying to aggressively sell gold coins by preying on people’s fears about inflation. Today such assumptions have been unfounded because of the continuing astronomical growth. What they missed was that this is no speculative frenzy; it is a very real and global demand for gold.

As research by Dr. Constantin Gurdgiev, head of research with St Columbanus AG and the adjunct lecturer of finance at Trinity College, Dublin, recently pointed out in his article, ‘If you are looking for bubble, don’t look for gold coins.’ Gurdgiev writes, “Gold coins are traditionally held by retail investors as portable units to store wealth. Due to this, plus demand from collectors, gold coins are less liquid and represent more of a pure ‘store of value’ than a speculative instrument.”

The US government Mint began minting coins in 1795 for currency purposes. Today there are a variety of bullion, proof, numismatic and commemorative US mint gold coins. The Denver and Philadelphia mints alone produce 65-80 million coins a day. They are very popular, but you must speculate as to why and consult an expert before thinking of including gold in your portfolio.

Benefits of US Government Minted Gold Coins:

If you are interested in purchasing of gold coins, make sure you are clear of your intent. If you want to purchase for pure inflation protection then bullion coins such as the American Eagle or the American Buffalo coins may be your best option. If privacy, confiscation protection and long-term growth portential are your goals then numismatic gold coins may be your best option.

Reliability and Certification: The US government minted coins come with guaranteed purity, weight and content certification. Rest assured, there is no chance of counterfeit gold, mismanaged content or scams of any other kind when you invest in coins that are backed by a certification from the US government, as long as you are buying from a certified dealer. All bets are off when going through a private party.

Liquidity: Because of the credibility of the certification by the US government, these coins are also highly liquid. They are easy to add to one’s portfolio and also trade. Since they are the leading coins that are traded in America, they have some of the smallest buy/sell spreads. You can also rest assure that you are not being duped into paying more than the coin’s worth.

Variety: The US mint comes up with new designs of coins for commemorative coins, medals and proof coins every year. In addition to this, they also have bullion in various denominations and numismatics since 1795 onwards in a variety of extremely popular designs such as the American Double Eagles, Liberty Heads, Saint Gaudens etc. The dates of release and details of design are released prior, in the interest of investors and collectors alike. When acquring numismatics the guarantee provided by grading companies like PCGS and NGC are key to ensuring your safe purchase, because they guarantee authenticity.

As the market fluctuates and investment experts speculate on gold options, coins constantly undergo revaluation of prices. In fact, August 2011, saw the US mint clamping down on production and sales for a full day and a half to decide on new prices seeing the increase in spot gold prices.

Counterfeit gold is a reality of the gold market that one should beware. At ITM Trading we help gold buyers looking for signs and certifications of purity and authenticity of the coins, which comes with US minted bullion coins as a 100% guarantee, and with numismatics through grading companies.