Are American eagle gold coins a good investment?

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American Eagle gold coins can be a good investment for those who value liquidity, diversification, and a tangible store of value. However, it’s essential to carefully consider factors such as premiums, tax implications, and your long-term investment goals before making a decision. It’s also a good idea to consult with a financial advisor or investment professional for personalized guidance based on your individual financial situation and objectives. Ld coins can be a good investment for certain individuals. 

Here are some reasons to be considered:

Positive AspectsNegative Aspects
High Liquidity: Recognized and Accepted in USA Premiums over Spot
DiversificationLower Purity (22k)
Hedge against EconomicTax Implications
Long-Term WealthShort-Term Volatility
  • Store of Value: Gold has been a store of value for centuries, and American Eagle gold coins are no exception. They are made of 22-karat gold and are guaranteed by the United States government for their weight, content, and purity.
  • Liquidity: American Eagle gold coins are highly liquid and can be easily bought and sold at many coin dealers, precious metals dealers, and some banks.
  • Portfolio Diversification: Gold can help diversify an investment portfolio and provide a hedge against inflation and economic uncertainty.
  • High Premiums: American Eagle gold coins have relatively high premiums compared to other gold coins, making them an expensive option for investors

The high Liquidity. Main advantage.

American Eagle Gold Coins are recognized and accepted in the USA, and they offer high liquidity in the global market. They are considered legal tender, with each size valued at the denomination printed on it (at values of five, ten, twenty-five, and fifty dollars). In fact, American Gold Eagle coins are the most widely-circulated and recognized gold bullion coins in the world. The US Congress officially recognizes American Gold Eagles, and the US Mint guarantees their weight and composition, making them highly sought after by investors The hope is that most, if not all, stackers are now aware that American Gold Eagles and American Silver Eagles consistently command higher prices than most other sovereign bullion coins. As pointed out, this premium is due to their liquidity advantage. Opting for more affordably priced foreign gold and silver coins may seem enticing, but selling them quickly can be quite challenging. The advice is to stick with U.S. government-backed coins, as it will save considerable headaches down the road. The recommendation is to Buy American!

The high Premiums over Spot. Main inconvenient.

The cost of an American Gold Eagle, which is around $1,900, is almost the same as a Gold Buffalo. Considering a spot price of $1,720, this disparity doesn’t align with the premium. Other options like the Canadian Maple Leaf, Krugerrands, Philharmonics, Britannias, and Kangaroos all come in at different price points, with a difference of about a hundred dollars between the Eagles and the Kangaroos on the high and low ends.

Therefore, if you’re solely looking at prices, it might not be the best time to invest in U.S. Mint coins. While some factors like familiarity and ease of selling might favor Eagles and Buffaloes, the current premium isn’t justified, and it’s advisable to consider other options like Britannias and Kangaroos, which come at a lower cost and similar ease of selling. However, it’s essential to weigh your personal preferences and long-term goals when making your gold coin investments.

Are american eagle gold coins taxable? Yes, American Eagle gold coins are taxable. According to Investopedia, physical holdings in precious metals such as gold, silver, platinum, palladium, and titanium are considered by the IRS to be capital assets specifically classified as collectibles. Holdings in these metals, regardless of their form—such as bullion coins, bullion bars, rare coinage, or ingots—are subject to capital gains tax. The long-term capital gains tax rate for collectibles is 28 percent. Therefore, if you own American Eagle gold coins for more than a year and sell them, you will be taxed at your personal capital gains tax rate, up to a maximum of 28%

Recently, a purchase was made of a beautifully graded NGC MS63 1924 double eagle, acquired for just $75 over spot from a local coin shop. Despite some fluctuations in the gold market, contentment remains with this acquisition. Due to the substantial premiums attached to U.S. gold coins, the preference has primarily been for alternatives such as French roosters, Swiss Helvetia’s, Sovereigns, Britannia’s, and even some Mexican coins (particularly the 20 Pesos featuring the Mayan calendar, which is still held dear). Prior to this, the collection included only a handful of smaller U.S. coins, many of which had seen wear and tear from previous use in jewelry or had been cleaned. An additional bonus was discovered, as the state exempts sales tax on bullion and specific collectible coins, resulting in significant savings compared to purchasing from dealers like APMEX or other eBay sellers. It has been resolved never to pay more than 5% above spot price moving forward. Just last week, some Britannia’s were acquired at just under 5% over spot, a considerable savings compared to the 10% premium paid for a selection of eagles and buffaloes a week prior. While it’s possible that the resale value might balance out in the future, there are no intentions of selling. It simply makes sense to maximize gold holdings within a budget. Speaking of premiums, recently, the premium (in relation to spot price) on one-ounce 2021 Buffalo gold coins listed by a prominent bullion dealer was calculated. The premium price per coin stood at $234.99 over spot, equating to a premium percentage of approximately 13.9% above spot. And this was considered a “Pre-Sale” deal.

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