Investing in Gold Bullion Coins
Certainty in a Time of Economic Uncertainty

INTRODUCTION
Many first-time investors believe gold is purchased in the form of the bullion bars often depicted in the movies, but in the real world most opt for one-ounce gold bullion coins. For the investor who seeks a basic hedge against economic uncertainties and/or hopes to invest for profit, this is the simplest and most direct way to own gold.* Gold bullion coins are portable, liquid and track the gold price.

As minted coins, they come in standardized sizes, weights and purity, making them easy to transact in the global marketplace. As such they are foundational items in the standard gold portfolio.

Produced at national mints in numerous countries -- West Point (United States), Winnipeg (Canada), Pretoria (South Africa), Vienna (Austria) and Perth (Australia) -- they trade at relatively minor premiums over the spot price and are widely owned by millions around the world. Gold bullion coins are generally minted in 1-ounce, 1/2-oz, 1/4-oz and 1/10-oz sizes and occasionally in 1/20th oz. Current pricing can be tracked readily in the financial sections of most local and national newspapers, and on the internet at gold-specific websites like USAGOLD.

Gold’s bull market and the credit crisis ramp up demand
During the first decade of the 21st century with the arrival of the secular bull market, gold experienced something of a renaissance in the public consciousness, not just in the United States, but on a global basis. Gold bullion coins, generally viewed as a portfolio hedge and store of value, were a major beneficiary of the general trend to gold ownership.

Production of the largest selling one-ounce gold bullion coins grew steadily throughout the decade. However, after the Lehman Brothers collapse in 2008 and the start of the global credit and financial crisis, public interest in gold bullion coins accelerated to a new level.

Mintage figures for the popular one-ounce American Gold Eagle, a bellwether for the overall market, provide a telling example. In 2006, the Mint produced 237,510 one-ounce coins. In 2007, production fell to 140,016, but by 2008 production had jumped to 710,000 coins. In 2009, at a time when the financial press was expressing optimism about a recovery, investors purchased another 1,493,000 coins. The heightened demand spilled over to early 2010. In short, Wall Street’s loss of investor confidence translated at least in part to the gold market’s gain. ...

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Michael J. Kosares
Author
The ABCs of Gold Investing
How to Protect and Build Your Wealth With Gold

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