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Buying American Eagle Gold Coins to Hedge Against Inflation

Jul 19, 2008
American Eagle bullion gold coins are an excellent way to begin and diversify any investment portfolio. With the decline in the value of the US dollar, and the rise in oil prices, gold as an investment continues to rise. Before you buy any kind of investment, however, it is important to know about what you are buying.

Let's talk about the metal in the American Eagle. First, the bullion coin is a 22 karat gold coin, made by the U.S. Mint, and is fully backed by the US Government. Originally introduced in 1986, the coins have become and excellent way to get into the gold market. The reason it is not 24 karat is due to the fact that some other metals need to be added to keep the coin hard enough from denting. All American Eagle gold coins, including the bullion, are made with gold that is from the United States only.

In general, all American Eagle Gold Bullion coins can be quickly sold for cash at coin and precious metal dealers throughout the world. Technically, these coins are legal tender in the United States; the 1 oz. gold bullion coin, for example, has a face value of $50 yet, given the fact the coin is worth almost twenty times that amount based upon the market price of its gold composition, this is basically a symbolic gesture. Again, people are purchasing the coin based on it's metal value, not face value.

For the new investor, there may be some confusion about the difference between the American Eagle Gold Proof coin, and the American Eagle Gold Bullion coin.

Eagle Gold Proof Coins: According to the U.S. Mint, are collector edition coins. They are minted through a special process that -begins by manually feeding burnished coin blanks into presses fitted with special dies. Each coin is struck multiple times so the softly frosted, yet detailed images seem to float above a mirror-like field. All Gold proof coins come packaged with a certificate of authenticity in a protective case and mounted in a satin-lined blue velvet case. They are originally available for sale directly from the Mint.

American Eagle Gold Bullion: These coins are not purchased for their rarity or age. They are purely meant as a way to acquire a position in gold as a precious metal. The gold market dictates the price they will sell for at the time of purchase. American Eagle Gold Bullion coins are not available for sale directly from the mint. Instead, they must be acquired through an authorized dealer.

When investing in gold bullion coins, fitting American Eagle Gold Bullion Coins into a Portfolio Gold is typically done as a hedge against inflation. During the 1970s, a time of historic inflationary pressure, for example, an investor would have been much better off had he owned a portfolio consisting largely of gold. However, throughout the 1990s bull market, however, gold bullion was an under performer and would have resulted in sub-par returns on a compounded basis for the decade.

Currently with the US economy in recession, and inflationary pressures on the horizon. The economic conditions are great for gold now, and proof is seen in it's continual rise in value.

Finally, American Eagle Bullion Gold Coins can legally be purchased through an IRA account as an investment. It is advised to check with your financial advisor for details on how to do this correctly.
About the Author
Visit http://eaglegoldcoinshop.com for pricing on American Eagle Gold Coins . You can find Eagle gold proof coins , and American Eagle bullion at auction pricing.
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