The price of gold increased by 6% during the third quarter of 2010, as reported by US Mint. This surge stemmed from the increased demand of bullion gold and gold coin of 5% in September. The US dollar’s decline also boosted gold investment. Hedge funds also played a part in boosting the gold coins’ prices.
It was suggested that the US Mint had trouble keeping up with the production of gold coins and bullion gold due to the increasing gold demand. The 24-karat American Gold Buffalo and the Canadian Gold Maple Leaf coins were the market’s favorite for the third quarter.
Understanding Gold Prices
An individual who wants to own gold coins must know how to evaluate their value and the difference between a gold bullion coin and a numismatic gold coin. The bullion gold is mainly for hedging inflation while the numismatic coin is to grow wealth for the long-term.
The bullion gold value is based on the intrinsic gold content per ounce whereas the numismatic gold value is affected by its rarity, popularity, numismatic significance, grade, quality, supply and demand in addition to the gold content. A 1933 St. Gaudens bullion gold coin could fetch thousands of dollars. But based on its numismatic value as well as historical importance, its value could be seven figures, as in the case in 2002 where a piece was sold for $7.6 million.
Determining Gold coin Prices
Bullion gold prices can be determined by its intrinsic gold content, the actual market price of the bullion gold and an extra premium that includes manufacturing, transportation and other costs. The bullion gold price is usually slightly higher than the spot market price of gold.
There are many bullion gold coins that are currently popular like the American Gold Eagles, Chinese Gold Panda, Canadian Gold Maple Leaf and the South African Gold Krugerrands.
The selling gold coin price can be determined by the following:
1. Weigh the gold content using a gram scale
2. Be updated on the spot price of gold as the price can change anytime in the gold market. You may find the most current spot prices online.
3. Assess the coin’s pure gold value.
4. The gold coin’s final price must include other factors like manufacturing costs, transportation costs, distribution costs as well as dealer commissions. Hence, the gold bullion market price is normally higher than gold’s spot price.
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