The marketplace for 1 oz gold coins has changed significantly since the late 20th century, when gold bullion coins were first introduced. At the turn of the century, a sea change occurred in the economic landscape with the collapse of the Dot-Com bubble in 2000. The 21st-century gold market represents a new paradigm shaped by a monumental shift in monetary and fiscal policy. The effects of this policy shift appear quite favorable for gold coins, especially American Gold Eagles.
According to U.S. Mint annual sales reports, the Gold Eagle has been the number one gold bullion coin in the world. However, American Eagle coinage may not be best suited for your individual preferences. Outlined below are the pros and cons of buying U.S. Mint Gold Eagles.
Low-Interest Rates:
Since the Dot-Com recession, there have been prolonged periods of subdued lower interest rates aimed at stimulating economic growth. Attempts to raise rates in response to inflation have led to increased recessionary pressures, resulting in the continuation of subdued rates. This economic uncertainty, driven by ongoing monetary intervention, bodes well for the American Gold Eagles and the coin market in general.
Quantitative Easing:
As a second measure to stimulate economies, central banks have implemented transactions that increase the money supply to prompt economic activity. This monetary inflation is widely known to breed price inflation, which directly benefits the gold coin market.
Fiscal Stimulus:
There is a school of thought that government spending initiatives—beyond what is funded by taxes—can help drive economic recovery. While this approach may provide a short-term boost, it ultimately depletes the private sector’s funding by redirecting resources. Fiscal stimulus adds directly to the national debt and places a long-term burden of carrying charges on taxpayers. The U.S. debt is now so monumental that many economists see the dollar itself at risk. With debt levels becoming unsustainable, a devaluation seems imminent, which positions the gold coin market favorably.
Considering that gold investors have purchased 22.9 million U.S. Mint new-issue 1 oz American Eagle coins through 2023 and many more in the secondary market, it’s clear that we are not alone in believing they are a good investment. Here is why:
| FROM | ENDING | END VALUE | +/- | GAIN/LOSS | ||
|---|---|---|---|---|---|---|
| 2000 | $274.60 | |||||
| UP | 2000 | thru | 2012 | $1,695.20 | $1420.60 | 517% |
| DOWN | 2012 | thru | 2015 | $1,080.40 | -$614.80 | -36% |
| UP | 2015 | thru | 2017 | $1,316.60 | $236.20 | 22% |
| DOWN | 2017 | thru | 2018 | $1,288.40 | -$28.20 | -2% |
| UP | 2018 | thru | 2020 | $1,917.20 | $628.80 | 49% |
| DOWN | 2020 | thru | 2021 | $1,841.40 | -75.80 | -4% |
It seems clear that buying American Eagle Gold Coins for investment makes sense. Of course, individual needs and net worth profile dictate investing objectives, but the solid benefits of the ever-popular U.S. 1 oz Gold Eagle seem quite evident. To discuss the attributes of gold coins that are most critical in your portfolio, call your Monex account representative.
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