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7 Essential Tips for Investing In The American Eagle Gold

Updated on June 9, 2016

Augustus Saint-Gaudens gave American coinage, the most celebrated design of all times – front full view of Liberty, holding a torch in one hand and an olive branch in another. Aptly, this design went on to feature on the obverse of the most popular bullion coin in the country – the American Gold Eagle Coin. After its authorization under the Gold Bullion Coin Act, 1985, the American Eagle first became open to the public access in 1986.

Variants of the American Eagle

Just like paper currency, bullion coins are also legal tenders that can be used to repay any debt or satisfy any liability in the U.S. This explains why each American Eagle is denominated with certain Dollar amount. However, these denominations - $5 (1/10 troy ounce), $10 (1/4 troy ounce), $25 (1/2 troy ounce), and $50 (1 troy ounce) – are only indicative. The actual value of this 22 Karat Gold Coin comes primarily from its gold content and consequently, changes with the spot price of gold. Other factors that affect the prices are minting costs, distribution expenses, and shipping & handling charges.

Benefits of Investing in the American Eagle

As per the United States Mint, “What truly sets American Eagles apart is that they are the only bullion coins whose weight, content and purity are guaranteed by the United States Government.” This distinguishing guarantee also ensures that all the gold used in these coins is mined in the U.S. only.

This guarantee adds additional dimensions of tradability and high liquidity to the American Eagle. By far, it has been the most widely transacted bullion coin in the country. High level of trading in the coin also ensures narrower spreads that lead to better margins.

Tips for buying the American Eagle Gold Coins

  • Distinguish Between Bullions and Antiques. Understand the difference between bullion coins and rare antique coins. The latter derive their value from a number of factors, such as grade, rarity, historical significance, dealer’s margin, and so on. They do not rely much upon their gold content and are not legal tenders.
  • Buy Online. Internet-based shopping has its benefits; but, at the same time, greater prudent is required in such transactions. Apart from checking the track-record, always ask for the return policy of the vendor. In case you find that the coin(s) you receive are defective or otherwise, not up to the mark, you should be able to ask for a replacement or refund.
  • Play Safe. Always buy from authorized dealers. If possible, ask your acquaints about the reputed sellers in your area. Internet has made it possible to buy straight from the Mint, no matter where you are. Understandably, this mode offers the maximum authenticity.
  • Check Seal. Bullion coins are covered in protective capsules of transparent plastic and arranged in boxes. Any lot sold by the Mint is accompanied by a certificate of authenticity. Always the check the original packaging and insist on the certificate if you are buying the mints from a dealer.
  • Do Not Worry About Bullion Grading. All the bullion coins are issued in mint state grades and usually carry the highest grade MS-70. Therefore, do not get tricked by a dealer, who overcharges in the name of supplying higher grade coins.
  • Think Economy. Different dealers charge different margins on the sale of coins. Though, some of this is genuinely used towards shipping and handling charges, the rest is the dealer’s profit. This is the component, where you will notice a lot of variance from one dealer to the other. It is highly recommended to compare the premiums before buying. Of course, the easier way is to buy straight from the Mint, where the premiums do not reflect undue profiteering.
  • No Need to Report. No law requires reporting of purchase or sale of gold. Those were the stories of foregone years (1933-75) when owning gold was made illegal. However, the speculations regarding this purported ‘reporting’ still do rounds and several dealers take advantage. These sellers advertise that the bullions purchased from them are not reportable and add a premium to this effect in their prices. By all means avoid such vendors.

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    • SagaciousScribe profile image

      SagaciousScribe 5 years ago

      Nice looking coins!

    • EurionConst profile image

      EurionConst 6 years ago from Delhi, India

      thanks! :)

    • jamiecoins profile image

      jamiecoins 6 years ago from ireland

      very usefull info