U.S. Mint Gold Coins: Is This the Right Time?

The first week of September 2011 saw gold prices touch a new record high of over $1,900/oz as renewed Eurozone debts continue to effect financial markets. The uncertainty in the market was set off with Angela Merkel, Germany’s Chancellor and her coalition losing out in an election on Sunday. Political disunity could further hinder efforts aimed at resolving the debt situation. Among other gold news, the August sales figures for both gold as well as silver American Eagle coins reached the highest since January. Around 3.68 million ounces in silver coins and 112,000 ounces in gold coins were sold by the U.S. Mint in August 2011.

David Wilson, analyst at Societe Generale said, “Clearly the debt issue is back in the spotlight." Wilson further said, “Added to that you had the fairly (weak) U.S. non-farm payrolls data. There are a number of reasons you can see why gold is supported."

Is it a Good Time to Acquire US Mint Gold Coins?

The Federal Reserve, on August 9th, 2011 pledged to keep rates of interest low for the next two years. This unprecedented step was accompanied by an unusual bearish statement about the outlook of the American economy for the coming months. Gold tends to do well in a weak dollar/low interest rate environment, and this is what acted as the catalyst for gold’s movement during August. According to experts these trends are expected to continue supporting the rally in the prices of gold.

If you are planning on increasing your holdings in gold coins because like most analysts, you think, prices will soar in the next few months, what do you think would be your best option? Which type of U.S. Mint gold coin do you think will offer the best value? If your target is just to capitalize on the price movement, bullion coins might work well. If your aim is asset preservation in the long-term and are concerned about monetary controls and/or capital, adding low premium pre-1933 American and European gold coins might serve your purposes. These gold coins have been treated as historical items, since the 1930s by the United States government. As a result, these coins offer privacy minded individuals with more safety as compared to gold bullion.

U.S. Mint Gold Coins: A Few Facts about American Bullion Coins
Many new buyers today are completely unaware of the fact that before 1986, American bullion was unavailable. This made it quite hard for average people who wanted to invest, as old coins were often valued as collector’s item and bars were usually large. However, when the Gold Bullion Coin Act of 1985 was passed, both gold and silver bullion became easily available. Here are a few more facts about American bullion.

All U.S. bullion have denominations and hold value as legal currency. For instance, the Silver Eagle is a dollar, while the Gold Eagles vary in denomination from $1 to $50 in denomination. This value is assigned to bullion coins, so that they can be considered as legal tender and therefore can be transported to and from various countries without being taxed.

Originally, between 1986 and 1991, the U.S. Mint dated bullion coins using Roman numerals. This allowed them to be easily distinguished as bullion. The Mint however, decided this wasn’t necessary any longer and since 1992, it has been minting bullion coins using Arabic numerals only.

Certain American Indian tribes made their own bullion. From a legal perspective, most of the recognized Native American Indian groups are considered as sovereign nations and therefore have the right to produce coinage. The Poach Band of Creek Indians and Shawnee Nation have both produced one ounce silver bullions.