U.S. Mint To Start Making 99.99% Pure Gold Coins
Golden buffalo set to roam again as new U.S. coin
http://www.suntimes.com/cgi-bin/prin...ss/mint18.html
BY MARTIN CRUTSINGER ASSOCIATED PRESS
June 18, 2006
WASHINGTON-- The golden buffalo, the legendary symbol of the American West, will soon roam again--this time as the nation's first pure gold coin.
The U.S. Mint will start taking orders in the coming week for the coins. Officials believe they have found a winning combination that will appeal to nostalgia buffs and investors.
The coin will be slightly larger and thicker than a Kennedy half dollar, will contain one ounce of gold and will be designated a $50 gold piece. The actual price will depend on the market price of an ounce of gold, plus markups.
The design is a replica of the popular buffalo nickel that was minted from 1913 to 1938. The golden buffalo has a buffalo standing on a grassy mound on one side and a stern-looking Indian chief on the other side, duplicating the images created by famed artist James Earle Fraser for the 1913 nickel.
"Many people will recall getting a nickel with the Indian head and the buffalo. It is really a beautiful design and evokes wonderful images," the deputy director of the Mint, David Lebryk, said in an interview.
The buffalo without the Indian chief made a brief comeback on the nickel last year as one of the designs used to commemorate the 200th anniversary of the Lewis and Clark expedition.
Mint officials are hoping the new American Buffalo gold coin will be a hit not only in this country but with investors around the world.
The government already produces a 22-karat American Eagle gold coin. This is the first time the Mint has produced a 24-karat coin, a designation that means the coin contains 99.99 percent gold as opposed to 91.67 percent gold content in the 22-karat coins.
Global investors in the past few years have turned increasingly to the purer gold coin. Those sales now make up about 60 percent of the gold coin market, led by Canada's Maple Leaf.
Analysts said the Mint is introducing the coin at a good time. After languishing for two decades, gold prices have been soaring recently, hitting a 26-year high of $732 per ounce in early May.
Gold was trading at $578 per ounce on Friday in New York, down from the recent highs but above Thursday's level of $566.50 per ounce.
While the volatility shows that small investors need to be careful in choosing precious metals as an investment, analysts said gold does offer a good hedge against inflation.
"Gold has made a comeback in the minds of investors after having been all but forgotten," said Mark Zandi, chief economist at Moody's Economy.com. "It will probably be only a small part of anyone's portfolio, but the fact that prices are now double what they were a few years ago has created a lot of newfound interest."
The Mint will sell two versions of the coin:
A bullion coin, designed for investors. Starting Monday, the Mint will sell the coin only to authorized buyers who will distribute the coins to a network of several thousand local dealers--coin shops, banks and other financial institutions.
The Mint will base its sales price for this coin on the market price of gold and a premium of about 3 percent; other markups in the distribution chain are expected to push the final sales price to about 5 percent to 7.5 percent above the market gold price.
A proof coin, which is aimed at collectors. This coin has a finer finish and a higher quality strike. The Mint is setting the initial price at $875 per proof coin and will only produce 300,000 of them.
Collectors can buy the proof coins directly from the Mint starting on Thursday by going to the Mint's Web site--www.usmint.gov--or by calling 1-800-USA-Mint. The site will also have a listing of local dealers who will be selling the coins.
All the American Buffalo coins will be produced at the Mint's facility in West Point, N.Y. Officials plan a ceremony on Tuesday to put the actual coins on display for the first time.
