Gold Coins Gain on Media Reports

Even though the gold bullion coin spot price fell 26% in 2012 demand for gold coins rose 63% last year, and the mainstream media is just now starting to realize that lower gold prices do not necessarily mean lower gold coin prices. The U.S. Mint reports its sales of gold coins weekly and looking at the charts shows that each drop in the gold spot price correlated with an upward spike in the Mint’s gold coin sales.

Why would investors buy an asset that is steadily decreasing in price? Because price doesn’t always reflect value or worth. While some gold investors buy the yellow metal with the singular goal of making money in mind, others have a more conservative mindset. They want to protect the wealth that they have accumulated over the years so that their heirs can receive the full value of the gift instead of a watered-down version thanks to inflation.

Gold’s spot price is only marginally important to many gold investors because it represents the metal’s supposed worth in dollars, the very currency from which gold investors are detaching themselves by purchasing gold coins. Sure, some buy bars but in general bars are usually used for extremely large, short-term transactions whose foremost goal is profit. Coins are for the investor who wants a long-term solution for inflation protection and/or those who foresee us using gold (and/or possibly silver) as currency in the future.

I believe that the popularity of gold coins will increase before it decreases, despite fluctuations of the gold spot price, due to the flagrant and rampant devaluation of the dollar to which many members of the media continue to turn a blind eye.

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