Collecting American Eagle Bullion Coins

By Arlyn G. Sieber May 26, 2010

This article was originally printed in the book The Instant Coin Collector, by Arlyn G. Sieber.
>> Click here for more information on this book.

 Silver American Eagle bullion coins, and their gold counterparts, were historic firsts for the U.S. Mint when they made their debut in 1986. They were the first official U.S. coins struck primarily to be bought and sold for their bullion value.
American Eagle bullion coins can be held in individual retirement accounts. Some individual date and mintmark combinations, however, also have collectible numismatic value, including proof versions. The story behind the coin Gold and silver bullion coins, produced by various countries, are official government issues. They are legal tender, and usually have a nominal face value, but they are produced and sold as a convenient way for private citizens to invest in precious metals and are not intended to circulate. To facilitate their trade, the coins are sized based on their precious-metal content. Gold bullion coins, for example, usually contain either a tenth-ounce, quarter-ounce, half-ounce, or full troy ounce of gold. Silver bullion coins usually contain one troy ounce of precious metal.

The standard sizes and credibility of the issuing authority give investors and collectors confi dence that when they buy one of the coins they are getting the stated amount of precious metal in the stated purity. South Africa was the sole player in the bullion-coin market for a number of years. It introduced the Krugerrand, which contains one ounce of 0.917-fi ne gold, in 1967. Fractional versions of the Krugerrand(tenth-ounce through half-ounce) were introduced in 1980.

The Instant Coin Collector is the one guide you need to get started in collecting coins quickly and easily! Buy the book today!

Other countries followed with their own versions of bullion coins. Among the most popular are Canada’s Maple Leaf, China’s Panda, Great Britain’s Britannia, and the Isle of Man’s Angel. In 1986, the United States introduced its American Eagle series of gold and silver bullion coins, and they have also gained popularity in the market. A platinum Eagle was introduced in 1997. The gold and platinum Eagles are offered in tenth-ounce, quarter-ounce, half-ounce, and one-troy-ounce versions. Silver Eagles are offered in just one size, which contains one troy ounce of 0.999-fi ne precious metal.

The U.S. Mint adapted two classic coinage designs for the gold and silver Eagles. Obverse of the gold coins is Augustus Saint-Gaudens’ design used on the gold $20 coin of 1907-1933. Many consider it the most beautiful coin design in U.S. history. The gold coins’ reverse, designed by Miley Busiek, shows a family of eagles with the adult returning to her young in a nest. Obverse of the silver Eagles was adapted from Adolph Weinman’s Walking Liberty design used on the half dollar of 1916-1947. It, too, is a favorite design of longtime collectors. The silver reverse features a modern but classically styled heraldic-eagle design by John Mercanti.

Where To Get Them

Regular strikes of silver American Eagle bullion coins can be purchased from coin and bullion dealers. The U.S. Mint does not sell them directly to the public. Instead, the Mint sells bulk quantities to distributors, who in turn wholesale the coins to retailers. Proof versions have been produced since the coin’s inception in 1986, and the current-year issue can be purchased directly from the Mint (www.usmint.gov). In 2006, the Mint began selling current-year uncirculated versions of the silver and other Eagles directly to the public.

How Much?

The retail price of regular strikes of the silver American Eagle is based on the current price of silver bullion plus a small premium. Collectible uncirculated versions generally sell for $15 to $20, but prices are again subject to change depending on the current trading price for silver. Proof silver American Eagles generally sell for $30 to $60, but some issues with lower mintages bring more. The scarcest is the 1995 proof silver Eagle with a “W” mintmark, which was included only in Eagle proof sets celebrating the series’ 10th anniversary. It sells for more than $5,000, according to Coin Prices magazine.

Mintmarks

Regular strikes of silver American Eagle bullion coins are produced at Philadelphia and do not have a mintmark. From 1986 through 1992, proof versions were struck at San Francisco and have an “S” mintmark. From 1993 through 2000, proof versions were struck at Philadelphia and have a “P” mintmark. In 1995, as noted, proof silver Eagles were also produced at West Point, N.Y.

These scarce coins have a “W” mintmark and were struck for inclusion in a special Eagle bullion coin proof set celebrating the program’s 10th anniversary. Since 2001, proof silver Eagles have been struck at West Point and have a “W” mintmark. In 2006, to celebrate the silver Eagle series’ 20th anniversary, the Philadelphia Mint produced a special “reverse proof” in addition to the regular West Point proof version for that year. The “reverse proof” features a frosted finish in the field and a mirror-like finish on the raised design surfaces, just the opposite (or reverse) of a traditional proof. The 2006 reverse proofs have a “P” mintmark and were available only in a three-coin silver Eagle set (proof, uncirculated, and reverse-proof versions). Since 2006, as noted, the Mint has sold uncirculated versions of current-year silver Eagles directly to the public. These special collector versions are struck at West Point and have a “W” mintmark. The mintmark on silver Eagles appears on the reverse below the eagle’s right claw.

Condition

Condition is not a factor for silver Eagles bought and sold solely for their bullion content. On collectible coins, traditional high points for wear on the Walking Liberty design are the hair on Liberty’s left temple and the upper part of her left leg. Uncirculated and proof versions of the silver Eagle should be free of major scratches and other blemishes. How to store them Security is more of a concern than preservation for silver Eagles bought and sold solely for their bullion content. A bank safety-deposit box or other secure, fi reproof system is recommended for bulk quantities of silver or other Eagle bullion coins. For collectible versions, an inert holder in which both sides of the coin are protected is recommended. Uncirculated and proof versions should be kept in their original Mint packaging, if available.

Silver American Eagle Bullion Coin Specs

Obverse designer: Adolph A. Weinman.
Reverse designer: John Mercanti.
Diameter: 40.6 millimeters.
Weight: 31.1010 grams.
Composition: 99.93-percent silver, 0.07-percent copper.
Actual silver weight: 0.999 troy ounces.

The Fine Art of Fineness

Precious metal — be it gold or silver — must be alloyed with a small amount of base metal, such as copper, to make it suitable for coin production. The purity of precious metal in a coin is called “fi neness,” which is expressed in parts per thousand. For example, the silver American Eagle bullion coin is 0.9993 fi ne, which means it has 999.3 parts of pure silver for every 1,000 parts of total metal in the coin. Thus, the coin is said to contain one troy ounce of 0.9993-fine silver.

Posted By CoinLink On May 24, 2010 @ 12:03 pm In Gold & Silver Bullion, Press Releases, US Coins, US Mint | No Comments

The U.S. Mint has confirmed that it plans to release five-ounce .999 fine silver bullion coins later this year in accordance with the AMERICA’S BEAUTIFUL NATIONAL PARKS QUARTER DOLLAR COIN ACT OF 2008 . The coins will be the first five-ounce coins ever produced by the Mint.

            The coins will bear the same designs as the new legal-tender quarters of the America the Beautiful Quarters Program. The first quarter in the program, honoring Hot Springs National Park in Arkansas, was released into the banking system April 19, 2010. Four more quarters will be released this year, with five quarters being released annually through 2021, concluding with the final quarter in 2022. The new quarters will commemorate 56 national parks and sites.

The Mint’s America the Beautiful Program will be well received as will be the companion five-ounce silver bullion coins. The America the Beautiful Quarters Program follows on the heels the U.S. Mint’s hugely successful State Quarters Program, which only recently concluded. The five-ounce coins will be sold via the U.S. Mint’s distribution system that has made American Eagle gold bullion coins and American Eagle silver bullion coins the best-selling gold and silver bullion coins in the world.

The five-ounce silver bullion coins will be near exact replicas of the legal-tender quarter dollars, with the inscriptions on the silver bullion coins identical to those on the quarters, including the denomination “quarter dollar.” However, legal-tender quarters will have milled edges (Also called reeded edges in the coin industry.) The five-ounce coins will not have milled edges but will have their fineness (.999) and their weighs (five troy ounces) incused as edge lettering. The individual coins will be three inches in diameter.

The Mint has not given a release date for the five-ounce coins beyond “mid-year.” Nor has the Mint disclosed how the coins will be packaged. The Mint ships its one-ounce Gold Eagle coins and one-ounce Silver Eagle coins five hundred to a box, twenty-five tubes, twenty coins to a tube. This packaging method has worked extremely well, both for shipping and for protecting the coins against damage during shipment and while stored by investors. It is likely that the Mint will package the coins five or ten to a tube, five hundred ounces (100 coins) to a box, which would weigh right at forty-two pounds.

Finally, the Mint has given no hint as to the premium at which it will sell the new five-ounces silver coins. It is likely that the America the Beautiful silver bullion coins will carry smaller premiums than the premiums on 1-oz Silver.

Bullion buyers out in force
Posted by Dave

Iola sure isn’t Nashville, Tenn., or Baltimore, or any other national show location, but when the Numismatists of Wisconsin held their 50th anniversary show here Friday and Saturday, attendees were behaving like their national counterparts.

Green Bay dealer Paul Reiser said, “Gold bullion was our best seller.” He noted that buyers were taking advantage of a price dip that occurred last week.

“I sold out of Krugerrands and Eagles,” Reiser explained.

“We did a lot in silver bullion,” he said of his 100-ounce and 50-ounce bars.

I can attest to that. One NOW member came by the Krause table as he was walking around the bourse and he was so pleased with his purchase of 10 ounces of silver that he showed me the A-Mark bar.

We had a nice talk about what the future might hold for it.

Nathan James Lord of Grant and Clemens, Watertown, Wis., pointed to an empty spot in his case on Saturday when I came around and he said that is where his 90-percent silver coins had been.

He wished he had had more, but he was not expecting to get a table when he came to Iola. A last-minute cancellation had given him a prime corner right at the show entrance. His results benefited.

Bullion might be hot, but the NOW show was full of typical collectors as well.
The Krause booth did a booming business in coin and paper money books.

I was personally chewed out by one attendee for not having non-numismatic books on hand that Krause published. She was in the mood to buy.

All I could do was invite her back to Iola July 8-11 when the annual car show will be held and Krause will have a book tent.

If that interests you, too, mark the dates on your calendar.

The Bullion Report May 24, 2010

Silver to Outperform This Year
MineWeb
BMO Research forecasts silver to average US$18.72/oz this year, $20/oz in 2011 and decline to $18/oz in 2012, with the long-term silver price projected to average $14/oz. In a first-quarter silver recap published Wednesday, BMO said its preferred senior silver producers  are Fresnillo, Pan American Silver, and Silver Wheaton, while First Majestic is the preferred mid-tier producer. Bear Creek Mining is the junior silver producer favored by BMO analyst Andrew Kaip and associates Alexandra Syrnyk and Heather Taylor. “BMO Research forecasts a relatively constrained physical supply/demand environment for silver and maintains the view that silver will outperform relative to other metals in the medium term,” the analysts said.
[ Read Full Article]

Silver, Gold Makes for Cheap, Flexible Touch Screens

These new touch screens could come hot off the presses using the same machinery that prints newspapers.

By Eric Bland
Mon May 24, 2010 07:00 AM ET
0 Comments | Leave a Comment

Print

Email

Facebook Twitter Digg Yahoo! Buzz

THE GIST

• Cheap, flexible, silver and gold touch screens could be “immediately” available for consumer electronic devices.
• Since it is made on thin plastic, the screen would also be more durable than its glass counterparts.
• The screens can be produced with the same machinery that prints newspapers.

enlarge

Unlike many technologies that have a significant lag time between development and application, Cui says his technique could be used “immediately.” Click to enlarge this image.
iStockphoto

Cheap, flexible touch screens made with silver and gold nanowires could soon be rolling off the presses and into cell phones, computers and more. The same technology could even be used in solar panels.

Writing in the journal ACS Nano, scientists from Stanford University say the new technology could be “immediately” used in consumer electronics.

“It’s a roll-to-roll process, just like printing newspapers,” said Yu Cui, a scientist at Stanford University and co-author of the paper. “It’s extremely fast and can be done at a very low cost.”

Today, most touch screens and solar panels are glass-based. The hard, insulating glass helps protect and support the thin coating of electrically conductive metals. But glass is also brittle and heavy. When an object strikes a solar panel, or a person drops a cell phone, the glass can shatter.

Touch screens made from thin plastic coated with silver and gold would weigh less, take up less volume, be more flexible and could be produced much more quickly than glass plates — up to 100 times faster in fact.

WATCH VIDEO: Nanotechnology promises to make our lives better.

Related Links:

---

 

• Next-Gen Touch Screen Inspired by Coffee Rings
• ‘Touch Floor’: An iPad for Your Feet
• Malicious Software Turns Your Cell Phone Against You
• HowStuffWorks.com: How do touch-screen monitors know where you’re touching?

 

---

 

Even though the screens are made with silver and gold, they are still cheap, said Cui. The total amount of precious metals in each screen is so small that it doesn’t significantly increase the price.

The connections between the silver nanowires are good, but not great, said Cui. His group managed to improve the electrical conductivity of the nanowires by fusing them together with tiny amounts of gold. The team is also trying to create longer, thinner silver nanowires, which will make the screen even more transparent and improve conduction of electricity through them.

The thin metal mesh formed by the nanowires is flexible and sticks to a variety of materials. When applied to plastic, the material can be bent, flexed or dropped, and the screen won’t crack and will still conduct an electrical charge.

That’s a far cry from many glass-based touch screens, which have an unfortunate tendency to shatter on impact.

The silver nanowires could also be used as electrodes for solar cells that can turn light into electricity, said Cui. Flexible silver and gold nanowire screens could replace the hard, glass-based electrodes.

Unlike many technologies that have a significant lag time between development and application, Cui says his technique could be used “immediately.” The same machines that produce tons of newspapers every day could instead assemble rolls and rolls of touch screens and electrodes for solar panels.

Other scientists agree that the consumers will likely soon see the research in a variety of devices.

“It’s certainly important and interesting research,” said Younan Xia, a scientist at Washington University in St. Louis not involved in the study. “The products that come from this technology will be very useful.”

Gold Set for Worst Week Since February 2009; Palladium Slumps

May 21, 2010, 5:03 AM EDT

More From Businessweek

• Gold May Rise as Investors Seek Alternative to European Monies
• Gold May Decline in New York as Greek Aid Might Erode Demand
• Gold Ratios to Platinum, Palladium Reach 2010 High on Debt Risk
• Palladium Has Biggest Two-Day Drop in 12 Years; Platinum Falls
• Gold Trades Little Changed as Record Prices, Dollar Trim Demand

Story Tools

• e-mail this story
• print this story
• digg this
• save to del.icio.us
• add to Business Exchange

By Nicholas Larkin and Kim Kyoungwha

May 21 (Bloomberg) — Gold dropped, heading for its biggest weekly loss since February 2009, as some investors sold to cover losses in other markets and lock in gains after a rally to a record a week ago. Palladium and platinum slumped.

Gold dropped this week as other commodities and equities tumbled. German business confidence unexpectedly fell after Europe’s debt crisis rattled financial markets, while growth in Europe’s services and manufacturing industries slowed more than economists forecast.

Gold “continues to suffer a lot as investors are forced to liquidate” positions to cover losses elsewhere, said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “We think the market is very oversold. Bargain-hunters may come in and support prices” soon, he said.

Gold for immediate delivery lost as much as $16.05, or 1.4 percent, to $1,166.30 an ounce and traded at $1,175.25 at 9:28 a.m. in London. The metal is down 4.7 percent this week, the most since the five days to Feb. 27 last year. Bullion for June delivery was 1.1 percent lower at $1,175.10 on the Comex in New York.

The Reuters/Jefferies CRB Index of 19 raw materials dropped 1 percent to 250.07 yesterday to the lowest level since September. Oil futures are down 2.5 percent this week and the MSCI World Index of shares headed for a 5.5 percent weekly drop.

Gold rallied to an all-time high of $1,249.40 an ounce on May 14 and is headed for its 10th straight annual gain, the longest winning streak since at least 1920, as investors sought to protect their wealth from Europe’s financial turmoil.

‘Accumulating Gold’

“Long-term-oriented investors are still accumulating gold,” Eugen Weinberg, a Frankfurt-based analyst with Commerzbank AG, wrote in a report yesterday. The recent price slump “is probably attributable to profit-taking by speculative investors,” Weinberg said.

Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record 1,220.15 metric tons on May 19. The fund’s assets were unchanged yesterday, its website showed. Ten of 18 traders, investors and analysts surveyed by Bloomberg said bullion would climb next week. Six forecast lower prices and two were neutral.

Gold’s price ratios to platinum and palladium surged to their highest levels this year on concern the European debt crisis may hamper global growth, damping demand for the metals used in auto catalysts.

An ounce of gold bought as much as 0.8092 ounce of platinum today, and as much as 2.9532 ounces of palladium, the most since December 2009. Platinum and palladium are used mainly in catalytic converters, which curb emissions from automobiles.

Platinum for immediate delivery in London fell 1.8 percent to $1,485.75 an ounce, after dropping to $1,448, the lowest level since Dec. 31. Palladium plunged as much as 4.9 percent to $396.25 an ounce, extending this week’s losses to 25 percent, and was last at $410.25. Silver for immediate delivery lost 0.5 percent to $17.5725 an ounce.

–With assistance from Glenys Sim in Singapore. Editors: John Deane, Claudia Carpenter.

To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net.

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net.

Palladium Has Biggest Two-Day Drop in 12 Years; Platinum Falls

May 20, 2010, 3:10 PM EDT

More From Businessweek

• Greek Impasse Deepens as Trichet Rejects Loan Subsidy (Update1)
• Russia Palladium Stockpiles May Be Over, Norilsk Says (Update1)
• Gold Falls, Heads for Biggest Weekly Drop Since February 2009
• Company Credit Risk Jumps Second Day on Sovereign Debt Concerns
• Venezuela May Nationalize Gold Mining Concessions, Chavez Says

Story Tools

• e-mail this story
• print this story
• digg this
• save to del.icio.us
• add to Business Exchange

By Millie Munshi and Nicholas Larkin

May 20 (Bloomberg) — Palladium futures plunged, capping the biggest two-day slump in 12 years, on concern that demand will dwindle amid dimming prospects for the global economy. Platinum tumbled the most since December 2008.

Europe’s debt crisis and slowing growth in China may erode consumption of the metals used mostly for pollution-control devices in cars. Ford Motor Co.’s deliveries in main European markets fell 17 percent in April, the first drop in 11 months. In two days, palladium dropped 19 percent, the most since May 1998. Before this month, the price surged 36 percent in 2010.

“Prices had gotten extended way too high, and it left the metal particularly vulnerable to changes in the economic situation,” said Donald Selkin, the chief market strategist at National Securities Corp. in New York. “People are looking at the overall macro picture now and thinking things are not going to be as good as they had hoped.”

Palladium futures for June delivery fell $50.75, or 11 percent, to $408.95 an ounce on the New York Mercantile Exchange. Yesterday, the metal tumbled 9.3 percent on record aggregate volume of 14,684 contracts. As of 2:34 p.m., estimated volume was 11,439 contracts. The two-day price drop was the biggest since May 1998.

Platinum futures for July delivery dropped $109.90, or 6.8 percent, to $1,495.80 an ounce, the biggest drop for a most- active contract since Dec. 1, 2008. Earlier, the metal touched $1,490.30, the lowest level since Feb. 12. The price has tumbled 14 percent this month.

Toshiyuki Shiga, the chairman of the Japan Automobile Manufacturers Association, said the European crisis has made him less optimistic about the global auto market than a month ago.

‘First Out’

On May 10, Peter Sorrentino, who helps manage $12.8 billion at Huntington Asset Advisors in Cincinnati, said palladium may fall to as low as $430 by September. The metal touched $406 today.

“People should make sure they’re the first out of the exit and not the last,” Sorrentino said.

Prices gained for 12 straight months through April. The introduction of an exchange-traded fund backed by the metal in January boosted demand, Selkin of National Securities said. An ETF for platinum was also launched in New York this year.

“There’s very high speculative interest” in the metals, said Walter de Wet, an analyst at Standard Bank Plc in London. “With risk as high as it has been, we expect to see some liquidation.”

–With assistance from Makiko Kitamura in Tokyo. Editors: Patrick McKiernan, Steve Stroth

To contact the reporters on this story: Millie Munshi in New York at mmunshi@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

By Jim Wyckoff
Nymex platinum and palladium futures markets this week have seen strong selling pressure that has resulted in major near-term chart damage which has put the bears in firm near-term technical command. Platinum futures this week have shed around $200.00 an ounce, while palladium futures are down around $120.00 an ounce this week.

The daily bar chart for July platinum futures shows that prices Thursday spiked to a fresh three-month low of $1,490.30. Prices are presently in a steep two-week-old downtrend on the daily bar chart. The next downside technical objective for the empowered platinum bears is to push and close prices below solid chart support at the February low of $1,456.00 an ounce.

It would take a close in July platinum futures back above strong technical resistance at $1,625.00 to provide the bulls with some fresh upside near-term technical momentum.

June palladium futures are in a steep three-week-old downtrend on the daily bar chart and hit a fresh 3.5-month low. The next downside price objective for the powerful bears is to produce a close below solid technical support at the February low of $382.00.

It would take a close back above major psychological resistance at $500.00 an ounce to provide the palladium bulls with fresh upside near-term technical momentum and repair this week’s chart damage.

By Jim Wyckoff, contributing to Kitco News; jim@jimwyckoff.com

What Gold Can (and Can’t) Do For You

It wasn’t so long ago when the Euro was flying high and some experts were predicting that the dollar could be replaced as the world’s reserve currency because of the United States’ ballooning deficit. Now, there are fears that Greece could default on its debt and even the Euro may cease to exist. The dollar has made gains against the Euro, but the real winner in this debt crisis can’t be printed by central banks. It must be harvested by miners: gold.

While the Euro has taken a hit, gold has shot up to all-time highs, above $1,200 per ounce. Investors must decide for themselves whether or not commodities like gold belong in their portfolio, but for those who want to know what all the fuss is about, here are a few things to know:

[See U.S. News's list of the Best Mutual Funds for 2010, and use our Mutual Fund Score to find the best investments for you.]

It has never been easier to invest in gold. Exchange-traded funds have revolutionized investors’ access to commodities. “The ease and liquidity of ETFs have really opened up commodities in general as a new asset class for investors,” says Tom Lydon, editor of ETFTrends.com. “In the past, for investors to buy gold, they either have to buy the coins or the bullion, and now in the form of ETFs there’s a whole variety of options,” Lydon says. In addition to buying gold through futures contracts, investing in physical gold—bars in underground vaults—through ETFs is now possible.

[See The Appeal of Gold ETFs.]

Gold can diversify. A small amount of gold can limit the overall volatility of your portfolio because it often performs differently from mainstay investments like stocks and bonds. “Gold and some other types of commodities are what you call non-correlating assets, so they tend to move independently of overall moves in the market,” says John Diehl, senior vice president in the retirement division at the Hartford. Gold sometimes reacts differently to market selloffs, which can help offset losses in stocks.

Gold as a reserve currency. The past few weeks have been a roller coaster ride for stock investors, punctuated by steep falloffs and strong rallies. The market’s behavior is partly due to worries that debt problems in some European countries like Greece could spread to other parts of the European Union and damage the Euro. The dollar has rallied somewhat in responses, but the United States has debt problems of its own.

The world’s primary reserve currency—the most commonly held currency by central banks around the world—is still the dollar, but when fear strikes the market, many investors flock to the safety of gold. “It’s not irrational that people are buying more gold right now because in the past, you had two reserve currencies, potentially, then you were down to one with the Euro, and now you may be down to none for a while, so gold is really the ultimate reserve currency,” says Paul Zemsky, head of asset allocation for ING Investment Management. “It’s the only thing that holds its value even if central bankers and governments are eroding the value of their own currency.” When there are global concerns about monetary policy, Zemsky says, gold will benefit from a flight to quality.

It has been a good, long run. The shiny metal set record highs last week. Diehl says he is worried that some investors who are new to commodities may not know what they’re getting into. “If fear in the market is at a high and everyone you talk to is saying, ‘Hey, you should put your money in gold,’ as a contrarian investor, that should be somewhat of an alarm to say, ‘Is this really the right thing to do? When everybody says, ‘Now is the right time to buy anything,’ you can generally feel fairly confident that it probably isn’t,” he says. A general rule of investing, Diehl says, is to look for asset classes that seem to be undervalued, and gold could be reaching its peak price.

Gold can be extremely volatile. Gold can provide diversification, but investors should be aware of the risks of investing in commodities. “Gold is really a precautionary hedge and not something your whole portfolio should be in,” Zemsky says. He recommends that investors only have 3 to 5 percent of their overall portfolio in gold. Diehl is even more cautious. “A singular bet on gold is, at its core, still a singular bet,” he says. “Just as emotions are volatile, the price of gold is a pretty volatile asset.” He suggests finding a fund that invests in a broad basket of commodities and not just in gold alone. Two popular choices are PIMCO Commodity Real Return Strategy Fund (PCRAX) and PowerShares DB Commodity Index Tracking Fund (DBC).

Newer Posts »