Bullion Series: 1 oz. American Gold Eagle

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For a while, I will move away from highlighting numismatic coins, and focus more on what we like to invest in, here at TRADEway—Bullion!  For the many reasons discussed in our Safety Step online course, we believe that bullion is the best safe-haven investment out there.  So for the next several months, I’ll be focusing on the history behind many of the very bullion coins that TRADEway offers to you!  It’s appropriate to begin with arguably the most popular bullion coin in the world—the 1 oz. American Gold Eagle.

Brief History

The American Gold Eagle Coin is an official gold bullion coin of the United States, first authorized by the Gold Bullion Coin Act of 1985.  The U.S. Mint has struck over 13 million of these coins since they were introduced onto the market in 1986 and sales have continued to rise higher each year since.  American Eagles have a rich history in design, collectibility, and value. 

Following the popularity of the South African Krugerrands, which were released in 1967, as well as the revocation of the Gold Reserve Act of 1934 thanks to President Gerald Ford, demand for a U.S. bullion coin was higher than ever.  In the following decade, the U.S. Mint began producing many of the coins we see today.  After over four decades of illegal gold hoarding, U.S. citizens were now capable of once again buying new gold, and protecting their family’s future with a very tangible asset.  

Because the term "eagle" is also the official United States designation for pre-1933 ten dollars gold coins, the weight of the bullion coin is typically used when describing American Gold Eagles (e.g., "1/2-ounce American Gold Eagle") to avoid confusion.  This is particularly true with the 1/4 oz. American Gold Eagle, which has a marked face value of ten dollars, just like the original ten dollar coins of times past. 

Offered in 1/10 oz., 1/4 oz., 1/2 oz., and 1 oz. denominations, these coins are guaranteed by the U.S. government to contain the stated amount of actual gold weight in troy ounces.  By law, the gold must come from sources in America, alloyed with silver and copper to produce a more wear-resistant coin.

The 22 karat gold alloy is an English standard traditionally referred to as "crown gold".  Crown gold alloys had not been used in U.S. coins since 1834, with the gold content having dropped since 1837 to a standard of 0.900 fine for U.S. gold coins.  For American Gold Eagles the gold fraction was increased again to .9167 (or 22 karat).  This is interesting, because most other bullion coins come with a purity of .9999 (or 24 karat), making them more pure.  Nevertheless, the U.S. Gold Eagle still contains a full troy ounce of gold, like the others, but is merely diluted slightly by this “crown gold” alloy, to increase durability.  It is authorized by the United States Congress and is backed by the United States Mint for weight and content.

The obverse design features a rendition of Augustus Saint-Gaudens' full length figure of Lady Liberty with flowing hair, holding a torch in her right hand and an olive branch in her left, with the Capitol building in the left background.  The design is taken from the $20 Saint-Gaudens gold coin which was commissioned by Theodore Roosevelt to create coins like the ancient Greek and Roman coins.  The reverse design, by sculptor Miley Busiek, features a male eagle carrying an olive branch flying above a nest containing a female eagle and her hatchlings.  The artistry of this coin has become an iconic staple of the precious metals industry worldwide.  

The minting process for these coins is also fascinating.  American mined gold and gold scraps from older Gold Eagles are put into a casting furnace heated to 2,100° F.  The melted gold is then formed into a solid long bar that is cut into segments 30” long. These bars are then put into a machine that uses over nine tons of pressure to flatten them.  They are passed through this machine 12 times until the bars are only ½” thick. They are now called fillets!

A finishing mill then flattens the fillets even more until they reach their final thickness of either 3/100” or 2/10” depending on the denomination.  These blank coins then go into a rimming machine that creates the raised rim.  They are then cleaned in a tub filled with water, a cleaning solution, and steel beads, which also smoothes and shines them. After 20 minutes in this tub they are sifted to separate the blank coins from the steel beads, then hand-dried.

After being heated so many times, the coins can sometimes become brittle, enough so that they could break, so they are put into a furnace that heats them to a specific temperature allowing the gold to soften and re-crystallize.  The blank coins are gradually cooled after this.  Finally, they are ready for the coin press.  The press has a hub and a die, one for each side of the coin.  Each side is pressed simultaneously, and this is done twice to assure the highest possible quality and detail.  This is the final stage of the minting process, and the American Gold Eagle Coin is complete!

The history of American coinage is very rich, and we are very fortunate as investors to have them accessible to us for personal protection.  The 1 oz. American Gold Eagle Coin will always be one of the most renowned coins in the world, and will most likely one of the most popular bullion investments as well.

 
 
 
 
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