Price of Numismatic Gold Coins Expected to be Reduced

The prices of US Mint numismatic gold coins are set to be reduced in the fifth week of July, 2010. The price decline will be in synch with the recent depreciation in the price of gold. This price change will affect the sale of numismatic gold coins available, including the 2010 Proof Gold Buffalo and the First Spouse Gold Coins featuring Sarah Polk, Margaret Taylor, Abigail Fillmore and Jane Pierce.

A Brief Introduction to the Policies Affecting the Price of Numismatic Gold Coins

According to the new pricing methodology used by the US Mint, the value of gold is based on the average London Fix gold prices. The prices of numismatic gold coins also cover all other costs incurred by the US Mint, such as the cost of minting, marketing and distributing such products (including labor, materials, dies, use of machinery and promotional and overhead expenses). This new policy also entitles the mint to alter is prices on a weekly basis. This is done by using the average of the London Fix prices from the prior Thursday AM to the current Wednesday AM.

This policy was highly criticized in the beginning as it failed to incorporate the changes at the end of May, 2010. However, the officials later offered greater clarity when they announced the hidden policy - the prices will be changed only if the Wednesday PM Fix agrees with the ongoing weekly average. After considering all the details of the policy, experts are of the view that a decline in price is imminent.

Numismatic Gold Coins: Market Trends

For week July 15-21, the average London Fix price for gold from Thursday AM Fix to Wednesday AM Fix was $1,193.42. This value changed to $1,191.25 by Wednesday PM Fix for July 21. The US rates are fixed in the $1,200 to $1,249.99 range. Experts are predicting a price decline as high as $50 an ounce.

Based on these developments; the price of the 2010 Proof Gold Buffalo will undergo a downward revision, from $1,510 to $1,460. Similarly, the price of First Spouse Gold Coins will be reduced from $766 to $741 for uncirculated coins and from $779 to $754 for proof coins.

Numismatic Gold Coin Price Reduction: Right Time to Buy Gold Coins

The price reduction of numismatic gold coins currently being circulated by the US Mint is good news for those who wish to invest in gold. Unlike the stock and forex markets, which rely heavily on market trends, the gold market relies on the demand for and supply of the precious metal. According to the World Gold Council, the demand for gold is likely to be strong in 2010, despite elevated gold prices. Additionally, gold coins also have heritage and collectors.

The 2010 Proof Gold Buffalo has been priced at $1,510 since it went on sale from June 3, 2010. Figures updated till July 18 have shown that around 22,844 coins have already been sold. Since its release, the price has not been revised even once. The recent decline, although expected to be very brief, will work as a high time for purchasing this coin.

The latest addition to the First Spouse Gold Coin lineage is Jane Pierce First Spouse Gold Coin. This coin was put on sale from June 3, 2010. Priced at $779 (proof) and $766 (uncirculated), these coins are also expected to be very popular among investors in gold.

Till the second quarter of July 2010, gold prices continued to rise. Referring to this rise, Juan Carlos Artigas, Investment Research Manager at World Gold Council, said, “...while gold continued its upward trend during Q2 2010, its price, relative to the price of various assets is not overvalued by historical standards.”