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Who Buys Gold Eagles Today?
June 10, 2010

The fractional gold American Eagles go on sale today to the Mint’s authorized distributors. They will in turn sell them to the secondary investor-collector market.

Because they are allocating supplies, we already know that the Mint thinks demand is higher than its ready supply.

The question that pops into my mind is where is the this demand coming from?

Are investors scrambling to buy fractional coins?

I wouldn’t think so. The mark-up for the smaller coins is higher. If you want to buy large amounts of gold, buying the smaller sizes is simply throwing money aware.

What about collectors?

Will they rush in right away to try to get examples of each size for their set?

It is possible. Collectors always like to be the first on the block to own something. The expectation that gold will continue to rise in value will not dampen that tendency.

How about non-collector buyers?

That is probably the heart of demand. TV offers and newspaper sales pitches all focus on genuine U.S. gold coins. The price point for the ounce has gotten too high for the average spur-of-the moment panic buyer, so the lower prices of the half, quarter and tenth-ounce pieces is a huge sales advantage – especially the tenth ounce.

There seems to be an unlimited supply of people who will send $100 to $200 for something. The gold value of the tenth fits comfortably at $125. Even with the mark-up, it is still within the range.

So who will do the buying of the fractional gold American Eagles?

We are about to find out.

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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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