Which US Gold Coins Are Investors Seeking?

The physical gold markets are separated by thousands of miles and even oceans. Whether the physical gold market is located in New York, Mumbai or Dubai, the activity in these markets impacts gold prices. These markets trade in gold bullion. While gold bullion is the most common, investors are being attracted by common date US gold coins.

The Financial Times reported on October 12, 2010 that some analysts believe that the price of gold seems to be skyrocketing due to a sluggish economy and low confidence among citizens in government policies.

US Gold Coins: Bullion Versus Common Date

While most investors are aware of gold bullions, common date US gold coins are not as well known. The latter are classic gold coins and are fairly scarce. They are also known as “generics.”Although millions of such coins were minted, they were used in circulation during the 19th and the early 20th century. Due to this many are not traceable and only a few are traded today. Bullion gold coins trade as a commodity in the financial markets. It is minted mostly by the government for investment purposes. Bullion coins are valued by their physical gold content.

Why some buyers are attracted to common date US gold coins include the following reasons:

Scarcity: Typically gold coins that came into circulation are not easily found, as a majority of them were lost, melt down or hoarded. The case is the same with common date US gold coins, which have the “scarcity” value for investors. The supplies of these coins are limited, while gold bullions are produced each year.

Classic: Coin collectors are eager to get their hands on common date US gold coins for the “classic” value, since they may date back to the 19th century.

Not purely subject to spot prices of gold: Since common date US gold coins have much more value for collectors than just the price of the metal, their price may remain flat or even rise while the price of gold declines.

Flexibility with the law: The buying and selling of common date US gold coins does not have to be reported to the IRS, which is not the case with bullions. Moreover, these classic US gold coins cannot be recalled and confiscated by the government.

Common date US gold coins include $20 Saint-Gaudens and Liberty, $10 Indian and Liberty, $5 Indian and Liberty and various others.

US Gold Coins: The Soaring Popularity of the American Eagle

The American Eagle gold coins have been among the most popular choices for investors for quite a while now. Back in the beginning of the production of these gold coins, the Mint’s sale of the American Eagle was modest, though it continued to rise. For instance, in 2000, the Mint sold only a total of 165k ounces of gold through the gold eagle coins. The average monthly sale was less than 14k ounces. However, in 2001, the sale of gold eagles improved to 325k ounces against the backdrop of bearish sentiments. With the average price of gold being as low as $272, $88 million worth of gold American Eagles were sold.

Although the demand for gold American Eagles picked up in mid-2007 as indicated by the sale of the Mint, it did not quite soar till the summer of 2008, amid escalating fears surrounding the global recession. The monthly average sale of gold American Eagles was 33k ounces during the first half of 2008, which was in accordance with the bull market at that time. However, in the second half of 2008, as the panic started, the average monthly sale of gold American Eagles soared to 111k ounces. In October 2010, while the price of gold was between $1350.00 and $1399.00, the price of American Eagle Proof Gold Coins was between an impressive $1635.00 for a 1 ounce gold coin to $180.00 for a 1/10 ounce gold coin.