Value in dollar of United States Gold Coins.

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When the U.S. Mint was formed by an act of Congress in 1792, the coins it was authorized to mint were backed by silver and gold. In 1792, the Dollar was fixed by law to contain 37.14 grains of silver, and was equal to 24.75 grains or 0.05156 troy ounces of gold. Gold was legally defined to be 15 more times valuable as silver.

The U.S. Mint had been producing gold coins since its establishment in 1792, continuing until the government recalled privately-held gold in 1933. The standard unit for these gold coins was the $10 gold coin, often called an “eagle.” The first gold coins were minted in 1795 – the eagle, which contained $10 worth of gold and had a $10 face value, the half-eagle, $5 and $5, and the quarter-eagle, $2.50 and $2.50. Because gold in its pure form is a soft metal, these coins were produced from gold that also contained an alloy of silver and copper to make them more wear-resistant. These coins were therefore “.91670 fine,” or 22 karat gold.

In 1849, with the rush of gold from San Francisco, the gold dollar and the double eagle was introduced, with a face value of $20 and gold value of $20. In simpler terms, the value of currency, like a $20 gold coin or a $1 silver coin, was originally tied directly to the value of a specific amount of gold. This connection was established by the government, which had the authority to decide how much gold a certain amount of money represented. They chose to declare that $20 represented the value of one ounce of gold, and they physically stamped this value on gold coins. The main objective was not to create a gold coin worth $20, but rather to ensure that each dollar was equivalent to 1/20th of an ounce of gold. This concept is what we refer to as the gold standard. Under this system, a dollar could be exchanged for a precise amount of gold, and gold could be converted into an exact number of dollars, all determined by legal regulations.

For instance, in 1834, the United States adopted the gold standard, setting the price of gold at $20.67 per ounce. This value was meant to remain fixed, offering a stable investment, in theory. However, during the 1929 stock market crash, people began hoarding gold. The U.S. Mint continued to produce gold coins until 1933, when the nation went off the gold standard, and private ownership of gold was made illegal, except for numismatic purposes. Most collectors, afraid of the ruling, turned in their gold even though it was legal for them to keep it. However, enough collectors did not, and there were plenty of gold coins in banks overseas, to assist the modern-day collector.

These de-monetized coins are highly sought after by collectors, who pay a premium for the rarity of the coin, on top of the value of the gold it contains. While the value of the dollar fluctuates against other currencies and can go up or down, the value of gold has always gone up, and will continue to go up, which is why investors have been purchasing gold since the dawn of time.

As of the time of this writing, gold is selling for $1950 per ounce and is confidently expected to stay over $2,000 per ounce. Sixty percent of those people investing in gold are doing it in the form of gold coins, in particular the American Eagle and Gold Buffalo.

But what about the classic gold coins of yore?

Because of their rarity, many Gold Eagles and Double Eagles have commanded enormous prices when recently sold at auction. The 1933 Double Eagle sold in 2004, the only one in the world that is legal tender, sold for $7,590,020 (the last $20 was the cost because it had been made legal tender.)

The 1787 Brasher Doubloon was sold a few years ago by Heritage Auctions for $2,990,000. The 1927-D Double Eagle, even rarer than the 1933 version, sold for $1,897,000. The finest known 1920-S Eagle sold in March, 2007 for $1,725,000, and the 1796 No Stars Quarter Eagle was sold in 2005 for $1,380,000.

Gold and especially gold coins have been and continue to be a sound investment in today’s troubling economic times. While paper money may become worthless because there is little to no inherent value in paper, gold will always have value as a commodity.

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2 responses to “Value in dollar of United States Gold Coins.”

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  1. Aria Everhart

    Why is a $5 gold coin being sold for over $600? I came across a $5 coin on eBay and I’m curious, is it the gold content that makes it so expensive? If I were to buy it, would a store only consider it worth $5? I’d appreciate it if someone could explain how this works.

    1. Alexandre Laurent

      Hello Aria:

      The reason a $5 gold coin is being sold for over $600 is primarily due to the gold content it contains. Gold coins, like the one you found on eBay, are not intended for everyday transactions but rather serve as a tangible investment in the price of gold. In this case, the value of the coin is not determined by its face value, which is $5, but by the weight of the gold it contains, which is approximately 1/10th of an ounce.

      Gold is a precious metal, and its price can fluctuate significantly in the market. At the time you came across this coin, gold was trading at around $1,000 per ounce, making 1/10th of an ounce worth approximately $100. That’s why the coin is being sold for over $600. People who buy gold coins are essentially investing in the potential increase in the value of gold over time.
      In a store, however, the coin would only be worth its face value of $5 if used for a purchase. Gold coins, like other precious metal coins, are not typically used for everyday transactions, as their intrinsic value as a metal exceeds their face value. It would indeed be impractical to use a gold coin in a vending machine or for any small purchase.
      Moreover, it’s common for countries to produce coins with a fixed face value that is significantly lower than the actual value of the precious metal they contain. These coins are more like investments in the metal itself. For example, Canada produced a coin with a face value of CAD 1 Million Dollars, but it was made from 100 kg of gold, which, at the time of production, was worth much more, approximately USD$3,400,000.
      Additionally, some gold coins, especially rare ones, can be worth more than just the gold they contain due to their collectible and historical value. For instance, the US 1933 Double Eagle, which is a $20 coin with approximately 1 ounce of gold, is worth over 18 million dollars to collectors because of its rarity and historical significance. So, when considering buying a gold coin, it’s important to recognize that its worth extends beyond its face value and gold content.


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