Where are Gold Eagle Coins Selling in 2009?

Since the surge in the price of gold bullion, Eagles have been hard to keep in stock, but who's buying?

Since financial markets really began having difficulty in late 2008, there has been are an awful lot of gold bullion Eagles being bought and sold in every major worldwide market. For much of 2008, gold investments were in the form of physical gold. But, in 2009, many investors have been willing to buy virtual gold, in the form of exchange-traded funds (ETFs) or other types of “paper gold” at higher prices. Regardless, demand for both commodities and investment accounts in gold continues to send the price upward.

Since it has become difficult to purchase gold Eagles from the Mint, collectors should remember that there are plenty of certified Double Eagles that have been in circulation since the program began in 1986, creating a massive domestic market, not unlike the gold jewelery hordes of India,estimated at 15,000 tonnes. Many investment grade coins are found in coins shops all over the United States and in traveling coin shows. As they age, these coins to take on some additional value other than that of the commodity price, alone.

Sales of the gold bullion Eagles are not confined to the United States. It is true that sales to international buyers do diminish the collective US or North American hoard of gold. While many nations do have import tariffs, movement to raise and lower rates drives much of the short-term speculation. Fees on conducting these transactions, whether in the form of a tax, import duty or any other type of squeeze will always contribute to some markup on cold coins, especially imported ones, over the spot price of gold.

This has caused the price to rise to such levels that some markets are simply cut off from importing gold eagle investments until the price comes down again. Markets being cut off from formerly sound sales include India and much of South-east Asia. In fact, the gold exchanges of nations with poor exchange rates as compared to the so-called “hard currencies” of the world, are buying gold for prices that are already historically high in local value. The same amount of money is reported to still be spent on gold items, but the amount it buys is far less. It's no wonder that people are selling.

Part of the rise in demand has come from China. Gold Eagles have been flowing into China, despite China being one of the world's largest producers of gold. There is still a lot of money in the world that people are looking to put into something more stable than a bank, or stocks or bonds or derivatives or any of the other things that have all taken a beating lately. There's a lot of new money in China, that doesn't own old land, and it has to go somewhere. People not only buy gold Eagles and other coins, but small denomination gold “cards” are often purchased in tiny fractional amounts that are easily hidden.

Another major player is our friendly neighbor to the North, Canada. With their own very successful bullion program, an entire collection of investment grade coins (marked as 99.999% pure) in proof includes quite a few denominations in gold, silver and platinum, all with the same maple leaf on the obverse. However, coins flow freely over the border, with 1-ounce maple leafs just as easy to acquire at a local coin shop as gold bullion Eagles. Because there are so many more people in the US, the trade balance has far more buyers south of the border, but many thousands of ounces of gold are sold in Canada each year.

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Arthur McGuire

March 17, 2009