An Investors’ Guide to American Gold Eagle Coins

As any good investor knows, diversification isn’t optional. If you want a well-rounded portfolio that performs well in good times and bad times, you must spread out and attach yourself to a variety of assets. This includes precious metals like gold and silver. And when it comes to buying gold, the American Gold Eagle is one of the most widely recognized types of coins on the market.

What Are American Gold Eagle Coins?

First issued in 1986, and recognized as the official gold bullion of the United States of America, the American Gold Eagle has established itself as one of the most trustworthy gold coins on the market. They are considered legal tender, and their weight, content, and purity are all guaranteed by the U.S. government.

The U.S. Mint produces American Gold Eagle bullion coins in four specific weights: one ounce, half ounce, quarter ounce, and tenth ounce. Each coin consists of 22-karat gold. Technically, each size contains a different legal tender face value:

• 1 ounce: $50 face value
• 1/2 ounce: $25 face value
• 1/4 ounce: $10 face value
• 1/10 ounce: $5 face value

While each denomination has a face value, you’ll be hard-pressed to find anyone who actually uses Gold Eagle coins as tender. That’s because the face value and the nominal value are significantly different. Currently, a single ounce of gold is valued right around $1,900. That would put 1/2 ounce at approximately $950, 1/4 ounce at $475, and 1/10 ounce at $190.

Gold Eagle coins are made up of an extremely durable composition of 91.67 percent 22 karat gold, 3 percent silver, and 5.33 percent copper. The one ounce coin has a diameter of 1.287 inches, while the 1/2 ounce coin comes in at 1.063 inches. The ¼ ounce coin is 0.866 inches in diameter, while the 1/10 ounce coin is 0.650 inches.

3 Tips for Buying and Storing American Gold Eagle Coins

While there are plenty of different gold coin designs and types to choose from, the American Gold Eagle is one of the most trusted options (largely because of the fact that it’s guaranteed by the U.S. government). Here are some tips for buying and storing:

1. Have an Investment Strategy

Make sure you know what your investment goal is when purchasing gold. While gold might be gold, there are a variety of different approaches to precious metal investing.

For example, are you going to buy a few gold coins and stick them in a safe in your house? Or are you going to open up a gold IRA and use it as part of your retirement savings strategy? If you’re going to do the latter, then you can’t actually buy the gold yourself and keep it under your mattress. You have to make sure you’re buying and storing it properly in order to enjoy the tax benefits within your IRA. 

2. Know Your Grades

There are three different grades of Gold Eagle coins. The standard version is called a bullion coin. These are designed and produced through a standard coin process and are intended to serve as investments. This is the most common type of coin (and the one most investors buy and hold).

The second grade is known as an “uncirculated coin.” These coins are intended for collectors and come sealed in plastic capsules or presentation cases. As a result, they charge a slight premium.

The third grade is a “proof coin.” These are also intended for collectors. As a result, they’re finished to an even higher standard. As a result, they’re less suitable as a traditional investment medium.

3. Know Where to Buy

It’s important that you know where to buy your American Gold Eagle coins. If you’re just an average investor who wants to keep a few ounces in a lock box or safe, there are plenty of websites where you can purchase gold and have it securely and discreetly shipped to you. But if you’re buying gold for a gold IRA, you’ll have to go through your brokerage/custodian’s process to ensure it’s properly purchased and stored within the legal requirements and stipulations set forth by the IRS.

Adding it All Up

If you’re looking to diversify your investment strategy, purchasing American Gold Eagle coins is a great step in the right direction. Adding a gold coin or (or a few) each year can help you gradually gain some independence from the stock market and U.S. dollar. And in an economy and global marketplace like this, that’s not a bad idea!