I was watching a program on how US gold coins are made and they said a $50 gold coin cost over $500 dollars. What's wrong with this picture? If it's only worth $50 bucks why would anyone pay $500 for it?
2006-08-25 04:19:56 · 13 answers · asked by DialM4Speed 6 in Business & Finance ➔ Other - Business & Finance
OK maybe some didn't understand. I'm talking about NEW 1oz. gold coins that are made every year by the mint. There ain't noting rare about them.
2006-08-25 04:27:38 · update #1
The value of the coin is at least $500.00 or whatever the price of gold is per ounce.
To legally make it the coin the government needs to give it a value so the picked a value of $50.
It was never worth $50.
Just like a 1, 5, 10 or 100 bill is printed on the same paper but has different values, the paper is still worth the same.
2006-08-25 12:56:57 · answer #1 · answered by Man 6 · 2⤊ 0⤋
The coin is minted in the denomination of $50.00, but the value of the gold in the coin is much more (approximately $500.00). Many coins are made in this fashion for collectors/investors. While many of these coins are legal currency of the issuing nation, it would be crazy to use it as such and not sell it for the value of the component metals.
Here is an interesting related fact about pennies. In the early 1980's the price of copper increased to the point where pennies were worth more than 1 cent. Why spend them if the copper in them is worth more than their face value?? The US solution was to remove most of the copper. Since 1983, US pennies are no longer copper. They are zinc with a thin coating of copper.
Guess what? The price of zinc is rising to the point where today, the metals (zinc & copper) in a penny are passing the face value of 1 cent. This is why there is all the talk about possibly getting rid of the penny.
2006-08-25 04:33:01 · answer #2 · answered by Mr. G 6 · 3⤊ 0⤋
The mint when issuing a coin must give it a "Face Value" to make it legal tender. The "Face Value" ofthe coin is not what the coin is "worth" rather a fixed amount of currency value if the coin were to go into circulation. If you took the coin to a store, you could "spend" it for $50, but the coin is actually "worth" more due to it's gold content.
2006-08-25 04:33:04 · answer #3 · answered by londonhawk 4 · 1⤊ 0⤋
When the coin was first minted, gold cost 50 dollars an ounce, now gold is worth 500 dollars an ounce. Pretty simple.
2006-08-25 04:23:18 · answer #4 · answered by October 7 · 1⤊ 1⤋
The U.S. mint is funny about stuff like that. The likely reason for the price hike is that the metal markets are soaring. Gold is a precious metal. They probably minted it as a $50 coin but they also probably used at least 1ounce of fine 99.9% pure gold. Plus it's graded in "mint"condition which means it's never been handled. That will drive price up considerably
2006-08-25 04:29:53 · answer #5 · answered by jcbulldozer 2 · 0⤊ 1⤋
Hey June, If you don't want to be involved in what you're investing in, then picking mutual funds might be as good a plan as any. But, if you want better-than-the-market returns, it would be worth learning a bit more about how to invest your money in the stock market directly. However, I'm a big advocate of value investing in the stock market (finding great companies to invest in, buying them at the right prices, and then selling only when the company becomes overvalued...). These are tried and tested principles that investors like Warren Buffett have used to grow their investment to many times their original value, and as I've said, I'm a big advocate of this approach. It's an approach that doesn't require you to sit in front of a computer screen for hours every day (like day trading...). Plus, you actually have some advantages if you buy your own stock directly as opposed to relying on a mutual fund manager to grow your investments for you. If you're interested, I have some great books as starting points on value investing on my website... Hope this helps, and good luck!
2016-03-27 05:33:26 · answer #6 · answered by Heidi 4 · 0⤊ 0⤋
It a ripoff, thats why. I would bet you wouldnt find a buyer for it the next day for 500 dollars.
Coins are a losing deal. You Pay a premium, or spot price or something, So You will pay more for what it is worth, Hoping for its 1oz value or 1/10th value ( doesnt matter ) to go Up.
Do YOurself a favor, pick up a book called, Barron Financial Handbook.
Lots of good info in there, It will take a lifetime to read most of it. lol
2014-02-04 17:41:43 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Because gold is more expensive and it depends on the weight of the coin and how much gold was actually used.
2006-08-25 04:22:17 · answer #8 · answered by bradnmich2003 4 · 2⤊ 0⤋
It's the gold content, upon which the value is based
2006-08-25 04:22:20 · answer #9 · answered by Anonymous · 2⤊ 0⤋
becuase it is very rare to have a $50 gold coin so they would sell them for that much because there so rare
2006-08-25 04:22:58 · answer #10 · answered by Anonymous · 0⤊ 2⤋