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National mints the world over produce millions of troy ounces of investment
grade bullion coinage in various sizes. These coins are generally "legal tender coins" and as such the
issuing government guarantees the purity and fine precious metal content.
Investment grade bullion coins currently in production typically range in size from 1 Troy Ounce to as
small as 1/20th Troy Ounce of fine gold, silver or platinum. With the purity ranging from just over .9000
fine to .9999 fine, investment grade bullion coins dimensions and gross weight will vary from mint to mint.
Some of the more popular investment grade bullion coins in production today are:
The following sample coins will be displayed:
Open a Physical Metals "Spot" Account
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Typically investment grade bullion coins will trade at a premium to the price of refined
bullion. This premium, initially established by the issuing mint, reflects the additional
expense involved in striking and distributing the coins. As with other physical commodities,
supply and demand can and will influence the level of these premiums in the secondary
market. Alliance makes active, two-way, bid-ask markets in these and other popular
investment grade bullion coins.
The U.S. Mint produces a finite number of Gold Eagle coins each year. This creates year
specific demand and is one of the factors affecting the premium a particular issue may
command. Gold Eagles coins are initially distributed through a Primary Dealer Network and
are priced against London Gold. The direct mint premiums are quoted as a percentage of the
value of one troy ounce of gold. The Mint's initial offering premiums to designated Primary Dealers
are:
| American Gold Eagle |
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For example, with London Gold trading at $320.00 per
troy ounce, new Gold Eagles (i.e., current year and
direct from the Mint) would be priced to the Primary
Dealers as follows:
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| Weight |
|
% Premium |
Cost per Coin |
| 1 |
TOZ |
Coin |
= |
3.0% |
$329.60 |
| 1/2 |
TOZ |
Coin |
= |
5.0% |
$168.00 |
| 1/4 |
TOZ |
Coin |
= |
7.0% |
$85.60 |
| 1/10 |
TOZ |
Coin |
= |
9.0% |
$34.88 |
Gold Eagle Coins are then offered to the investing public with a
mark-up and are bought from the investing public at a mark-down
that reflects current demand for refined gold bullion and the
specific supply and demand for a particular issue (year and weight).
In most cases, the public may only purchase the coins from
a primary or secondary dealer and cannot buy coins directly from the
issuing mint (except for "proof" grade collectables).
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The above example illustrates coin pricing as a percentage of net fine weight value. Investment
grade bullion coins can also trade on a dollars and cents per troy ounce premium and/or discount
or on a per coin premium and/or discount to the prevailing gold price.
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