I've seen this in other gold currencies, too, and I don't understand it, when an ounce goes for $650 plus.
2007-07-17 16:41:55 · 4 answers · asked by ireallycantbelievethat 2 in Business & Finance ➔ Investing
The reason the face value of a gold coin is so low compared to the melt value, is because the gold coins are not intended for circulation. The face value of a one ounce coin is $50 - this is to keep the holders of the coins from being tempted to use one in circulating. While you can legally pay for dinner with a one ounce gold coin, you'd be losing about $600. The reason the government does not want the coins circulating, is the same reason they ended the $500 and $1000 notes - there is not much reason to be carrying around currency in those denominations - the activity is likely fraudulent if you have to pay for it in "$650" bills.
Hope this helps.
2007-07-17 18:13:34 · answer #1 · answered by goldmoderncoins 1 · 1⤊ 0⤋
Of course $25 is the face value of the coin. Nobody is going to walk into a store and pay for a $25 item with a coin worth $650, but if the bottom fell out of the gold market and the price of bullion went down to, say, $10 per ounce, you could still buy $25 worth of merchandise. In that sense it's to your advantage to have the Gold Eagle be "legal tender for all debts, public and private". Can't hurt, might help.
Actually, it's not all that rare for a coin to have its metal content be worth more than face value. That's why the old 90% silver coins are never seen in circulation anymore. A 1960 Washington quarter is still worth 25 cents at the drugstore, but there are a lot cheaper ways to pay for a can of talcum powder than by laying down the right number of 90% silver coins!
2007-07-18 00:32:40 · answer #2 · answered by zygote222 5 · 0⤊ 0⤋
I can't add anymore as goldmoderncoin gave a great answer. The only thing I can say is the first person is slightly off - American Gold and Silver Eagle coins are indeed legal tender for payments of all debts. But the answer the goldmodern gave for the reasoning behind your question is EXCELLENT.
2007-07-18 10:54:54 · answer #3 · answered by 4XTrader 5 · 0⤊ 0⤋
All metals are hot right now, even copper. Did you know that the copper in a cent is worth more than a cent? People are taking them out of the country in bulk to be melted down. The Secret Service is even trying to track these shipments, because it's illegal to do that.
2007-07-18 01:04:35 · answer #4 · answered by gregory_dittman 7 · 0⤊ 0⤋