Why Are 1oz Gold Coins Different Prices?
Dealer selections will differ based on available inventory. Each coin contains one troy ounce of pure 99.999 gold.
Gold coins like the Krugerrand, Maple Leaf and 50 Dollar Eagle each contain the same amount of gold (one troy ounce), so why do their prices vary so drastically? There may be several reasons behind this discrepancy.
Why Are There Different Prices?
Gold premiums depend on various factors. They reflect the cost of mining, refining, minting and shipping products to market; premiums may differ based on which manufacturer produces it and the size of product being produced: for instance it costs more to create one troy ounce coin than one ten-ounce bar.
Condition is another important factor in a coin’s value; especially if its appearance has suffered due to inappropriate handling. Relative scarcity also has an effect on price – for instance when only a handful of 1899 Gold Half Eagles remain for purchase.
Some coins produced specifically for collectors can carry a premium over their bullion counterparts due to factors like quality, design and history of each coin produced for collectors. Additional costs must also be considered when analyzing coin pricing: shipping from source to market costing an individual extra, salaries paid out by sale/buy teams as well as counterfeit prevention teams tasked with keeping tabs.
What Makes One Coin Worth More Than Another?
Simply put, premiums are determined by supply and demand. Because there are only limited supplies of high-grade coins out there, when these become scarcer their price naturally increases as will all commodities from cars to food and more.
One other factor is coin size; generally speaking, smaller coins tend to be more cost-effective due to minting dies, sourcing metal, marketing and distribution expenses, etc. for 1 oz coins than for smaller ones.
Due to this reason, fractional gold coins generally command lower premiums than their 1 oz counterparts – giving you access to pure gold for less money with 1/2 oz American Eagle coins such as those available in this case.
Some investors also enjoy the ease and portability of carrying around smaller denomination coins, like half ounce coins which are roughly equal in diameter to quarters and 60% thicker than nickels – this makes spending them easier in case of hyperinflation, something many buy gold against. Diversifying your portfolio can also make liquidating holdings or bartering easier – this makes investing easier all-round!
What Makes One Coin Worth Less Than Another?
Other than gold’s intrinsic metal value, many factors influence the price of 1oz gold coins beyond just their intrinsic metal value. Condition rarity plays an integral part in coin pricing – there are only so many high-grade (as determined by the Mint) coins available in mint condition so if you find one it could likely fetch more than its lower graded counterparts.
Demand can also play a factor. Some coins, like the popular Mexican Mint Libertad gold bullion coin, are in short supply, which drives up their premium in comparison with similar 1oz gold coins from that mint.
Face value of gold coins is also an integral factor when establishing their prices. Since the US Mint is part of the Department of Treasury and must abide by congressionally established rules regarding bullion coin face values and sizes, even if an ounce of gold could cost more than $50 at today’s rates, its face value will still only cover part of its true cost when sold as American Eagle coins.
Though this may sound bizarre, if you think about it it becomes clear. Just because a stock cost $500 per share doesn’t mean its worth would remain unchanged at $100 a share.
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