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How Are Gold Coin Prices Determined?

How Are Gold Coin Prices Determined?

How can two 1 oz. gold coins have two different prices? It's a curious thing! Both coins are just 1 oz. of gold, right? There's more to it than that. Many factors go into the price of a gold coin. Even though gold coins may look relatively the same, appearances aren't everything. Follow along as we explain why gold coin prices vary so much.

Coin Type

When evaluating the price of a gold coin, the first thing you want to ask yourself is, “What's special about this gold coin?” There are many different types of gold coins available. A few of the most commonly found ones are listed below.

1 oz. Gold American Eagle Coin, View of Front

1 oz. Gold American Eagle Coin

Bullion Coins: Bullion is most simply defined as “precious metals in bulk form,” and gold bullion coins come in a variety of weights, from 1/10 oz. to 1 oz. Gold bullion coins are generally produced with a standard matte finish and are often not sealed in plastic slabs.

The price of a gold bullion coin is most often influenced by the coin's weight and the current market price of gold. Condition is a minor factor. A few scratches here and there won't impact the gold coin's market value.

2018 1/4 oz. Gold American Eagle Coin MS70 in plastic sealed PCGS case with First Strike label

2018 1/4 oz. Gold American Eagle MS-70 (PCGS)

 

Certified Coins: Certified gold coins are evaluated and graded for their condition by a third-party grading service, like Professional Coin Grading Service (PCGS), on the Sheldon Coin Grading Scale of 1 to 70. The higher the number, the more perfect the coin.

The price of a certified gold coin is tied to the coin's weight in gold, but also to its availability and condition. Because a certified coin's condition plays such a major role in its market potential, certified coins are encapsulated and sealed in impact-resistant, tamper-proof slabs.

Proof Gold American Eagle Coins, Reagan Legacy Series

Proof Gold American Eagle Coins

 

Proof Coins: “Proof” indicates a coin’s finish and method of manufacture, not a coin’s condition or grade.

The Guide Book of United States Coins (via NGC) defines the term as: “Proof, A specially made coin distinguished by sharpness of detail and usually with brilliant, mirror-like surfaces.”

Like certified coins, the price of a proof coin is also tied to its availability and condition. Not all proof coins are graded and certified, but those that are have shown to not be as vulnerable to the same level of spot price volatility as bullion coins.

W Burnished Gold American Eagle Coins PCGS MS70 $50

Uncirculated/Burnished Gold American Eagle with “W” Mintmark

 

Uncirculated Coins: The term “uncirculated” can actually refer to three things: 1) a coin that's released to the public but not intended for general circulation; 2) a coin that's been given an official grade of Mint State 60+; or 3) the process by which a coin is made. The third definition is how the U.S. Mint refers to uncirculated coins and the interpretation we rely on here at U.S. Money Reserve.

Uncirculated gold coins are minted in much the same way as circulating coinage and tend to be more affordable than proof coins. They can also be produced in higher numbers than proof coins, but not always. The Uncirculated/Burnished Gold American Eagle with the “W” Mintmark is one of these exceptions. It offers the lowest mintages of any coin in the history of the Gold American Eagle program.

Coin Size

Big cars, big houses, big televisions—bigger things usually cost more than smaller things! The same can generally be said about gold coins.

This price factor is pretty simple to understand. In general, the bigger the coin, the higher the price! Let's look at a Gold American Eagle Coin as an example.

A 1/10 oz. Gold American Eagle Coin is 16.5 mm in diameter and 1.19 mm thick. It contains 1/10 troy oz. of gold and as of October 22, 2018, costs about $140.

A 1 oz. Gold American Eagle Coin, on the other hand, is greater in size and price. It has a diameter of 32.7 mm and a thickness of 2.87 mm. It contains 1 troy oz. of gold and as of October 22, 2018, costs about $1,294.

Keep in mind that this isn't a hard and fast rule in gold coin pricing. You can definitely find 1/4 oz. gold coins that are priced higher than 1 oz. gold coins due to rarity, demand, or historical significance.

Coin Grade

Coin grading is the process of determining a coin's condition, typically on the scale of 1 to 70 that we mentioned previously. The higher the grade, the higher the coin quality—and often, the higher the price!

“Seventy is perfect and flawless with absolutely no imperfections, no fine scratches, no hairlines at all,” says John Rothans, Chief Numismatist at U.S. Money Reserve. “That’s basically the top, top, A +++ of the coin grading scale.”

A coin's grade is an important factor in its price. As PCGS notes, this idea coincides with the basis of Sheldon’s Coin Grading theory, “that a ’70’ would be worth 70 times as much as a ‘1.’”

There are only so many high-grade coins in existence, and gold coin prices often reflect this. Alan Luckett, former Customer Relations Director at U.S. Money Reserve, explains the concept with an easy-to-understand analogy.

“It’s not unlike if you or I had a 1965 Mustang in showroom condition with 200 miles on it,” he says. “You go to auctions now, and you see that car that we could’ve bought for $3,000 in 1965 or 1966. The car now sells for $250,0000. Why? It’s still a ’65/‘66 Mustang. It sells for that because there aren’t any of them in that flawless condition.”

Graded coins have been examined and evaluated by trained experts. Many gold enthusiasts find that that expertise is worth paying for.

U.S. Money Reserve Free Gold Information Kit

 

Get free access to U.S. Money Reserve’s exclusive Gold Information Kit with special offers, diversification strategies, and a precious metals guidebook. Sign up now to gain access to this exclusive resource, only from America's Gold Authority®.

Coin Company

 

Can you put a price on trust? Where you buy gold coins is just as important as what type of gold coin you purchase. Every gold company is different!

You can buy gold coins online, over the phone, or even buy gold locally. Some gold buyers avoid local dealers, though, because they don't want to deal with potentially higher prices, sales tax, false advertising, limited variety, and wasted travel time.

Buy gold coins online and you can shop anywhere, any time of day. Forget traffic and parking. You can shop in private, without pressure from a hovering sales associate, and you can leverage the expertise of knowledgeable Account Executives with years of experience and training. Buy gold coins online and you can also compare a variety of gold coin types and prices, all in one place.

Before you go with the lowest prices locally or online, do your research. The Federal Trade Commission advises gold buyers to, “Check out the seller by entering the company's name in a search engine online,” and “Read about other people's experiences with the company.” Reputable, trusted gold companies tend to have top ratings from consumer advocate groups like the Business Consumer Alliance and the Better Business Bureau, as well as many positive reviews from customers.

We can't speak for other gold companies, but we can tell you what to expect when you purchase from America's Gold Authority, U.S. Money Reserve.

Call and we'll begin with a free in-depth consultation about your financial objectives and long-term goals. Our gold market veterans work one-on-one with you to help you choose the right gold coins for your precious metals portfolio. There's no pressure to buy. Education is our top priority, and it's 100% free.

Take it from Ronald G. In his U.S. Money Reserve review on October 14, 2018, he shared the following: “Enjoyed my conversation with the representative. He is very knowledgeable about all the different gold coins I'm interested in investing in.”

If you have questions about prices for specific gold coins or the price of gold in general, call us at 1-844-307-1598. Ronald was certainly glad that he did! Account Executives are standing by to answer your call.

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