Gold Coin Sales May Get a Boost From U.S. Issue
Since the U.S. banned imports of the Krugerrand last October, the Canadian Maple Leaf has snared more than 65% of the gold-coin market here, overtaking the South African coin for the first time since the U.S. ban on gold sales was lifted in 1974.</br></br>But the Maple Leaf is meeting new competition on several fronts. Sales of the four-year-old decorative Chinese coin, the Panda, have surged. Luis Vigdor, senior vice president of Manfra, Tordella & Brookes Inc., the large New York foreign-exchange dealer, calls it the "hottest coin on the market." The state of California has begun offering a "California Gold" piece. And next October, the U.S. government will issue its first official gold coin in 50 years.</br></br>If the new U.S. coin is "properly defined and distributed, it could knock everything else out of the water," asserts Jeffrey Nichols, president of American Precious Metals Advisors.</br></br>Although gold coins have lost the enormous appeal they had in 1980 -- when inflation propelled gold to record high prices -- they may be ready for a modest comeback. Many gold bugs see inflation returning, and with it, coin buying. Some feel the introduction of the American gold coin will also revive the market. It will act "like an injection of vitamins" into the U.S. gold market, says Mr. Vigdor.</br></br>For prospective coin buyers, the most important consideration is a coin's liquidity. "You want to be certain that in two years or 10, you can resell it," says Mr. Nichols. Coins' purity and weight also vary; one-ounce coins are the most popular among investors.