Last week, if you were looking for gold coin news, you were likely to come across two stories about the release of brand new collector’s coins being issued by national mints.
The Royal Canadian Mint has released silver and gold coins commemorating the canonization of Pope John Paul II. The US Mint has released a new gold coin as part of their National Baseball Hall of Fame program, which is being heavily marketed as the “first curved coins ever produced.”
Unfortunately, it seems that even well-respected bullion producers play the gold scams game nowadays. What’s worse, it appears to work – the US Mint sold out of the first 50,000 of these new curved coins in just days!
To an experienced and intelligent gold investor, both of these coins are rip-offs. If you’re a devout Catholic or a hardcore baseball fan who can afford them, maybe these will be nice collector’s items for you. But don’t be fooled into thinking you’re simultaneously making a good investment.
A quick look at the specifications reveals how overpriced these coins are. Here’s a synopsis:
Pope John Paul II Fine Gold Coin
- Weight: 7.8 grams – 1/4 troy ounce
- Price: About $590 US
- Actual value of gold content: About $322 US
- Total Markup: Over 83%!
National Baseball Hall of Fame Proof $5 Gold Coin
- Weight: 8.359 grams – a bit more than 1/4 troy ounce
- Price: $424.75 US
- Actual value of gold content: About $346 US
- Total Markup: Over 22%!
We’re not sure what’s so appealing about a bent coin. It’s a nice marketing gimmick, but the real curveball is the steep price tag. The price of the Canadian coin is worse, which they justify by touting the limited nature of this mintage – only 1,500 coins were produced. Of course, who’s to say they won’t run off more and more if these sell out?
How much of a role will the collectible factor play in a coin’s value in ten years? Who knows! But we will always know what an ounce of pure gold is worth, no matter what is stamped on its face.
Fundamentally, gold is cheap right now – it’s a great time to buy. But that doesn’t mean you should break the bank just because a new coin design catches your eye.
