The World Gold Council recently announced their plans to attempt to popularize half gram gold coins. The plan seems mostly targeted towards consumers in India, in advance of the upcoming festival.
How small is a half gram of gold? There are 31.1034768 grams in one ounce. If you are familiar with the one-tenth ounce size gold coin, a half gram of gold would be about one-sixth of that size. The value of one half gram of gold based on Friday’s gold closing price would be about $14.68.
The story about half gram gold caught my attention because it is the opposite of what’s happening with gold in other parts of the world. As the price of gold increases, it makes sense to popularize smaller size coins or bars so that a mainstream audience will continue to have options for investing in gold. In the United States, smaller sized coins have actually been suspended in favor of producing only one ounce coins.
This step was taken by the US Mint at the end of 2008. At least one other world mint that I follow, took similar action. For all of 2009, the US Mint has only produced gold bullion coins in the one ounce size. Based on the current price of gold plus the standard markup, the price tag for the smallest possible gold purchase approaches $1,000. This may be out of reach for many potential investors.
In advance of Y2K, there was a renewed interest in precious metals investing as a disaster hedge. Even mainstream consumers began to buy into the story, bringing in many new gold investors with budgets both large and small. When Y2K precious metals investment reached its peak in 1999, the US Mint sold 2,750,338 1/10 ounce gold coins which would have cost around $40 each. The 275,000 ounces sold via 1/10 ounce coins actually exceeded the total amount of gold bullion sold by the US Mint for some prior years.
The current lack of fractional sized bullion coins has effectively cut off a significant portion of gold investment demand. Importantly, this is demand which would come from a mainstream investment audience, which gold currently lacks.
An array of recent gold related articles to ponder as the price of the metal dips to $874 per ounce.
ETF Securities USA recently filed with the SEC to launch exchange traded funds covering platinum and palladium. There are currently no exchange traded funds covering these metals available in the United States.
As I have in the past, I have compiled the total bullion sales from the US Mint’s bullion coin programs. The numbers for March 2009 bullion sales carry a bit of a surprise. The US Mint recorded the highest monthly silver bullion sales since December 1986, which was the second month the silver bullion coins were offered.
As gold turns lower on reports of a “turning point” for the entire global economy, let’s take a look at some thought provoking gold, silver, and precious metals related stories from other news sites and blogs. This round up includes stories on the Gold ETF and Silver ETF, a call for a return to the gold standard, Fort Knox, and prospecting for gold.