Gold Investing - Cash4Gold Lawsuit

I just finished viewing a video about the class-action lawsuit against Cash4Gold. Whether this lawsuit is successful or not, I think it is good news to bring more attention to the firms that advertise "send us your gold". There have evidently been too many people getting ripped off by some of these firms. Whether Cash4Gold was one, I can only relate my experience.

On my web site, I dedicated a page to my experience selling one piece of scrap gold as a test of how one of these firms works. That firm was Cash4Gold. You can read about it at Sell Scrap Gold

To recap my experience, it took them 12 days and an E-mail from me before they responded. Then I received a check for approximately 14.4% of what the piece (a 10k gold ring) was worth at the time. I said NO. My second E-mail asked for an explanation of their "logic" at which time they offered me 32% of the piece's worth. I said NO. The ring was returned to me 44 days after I had sent it in.

I had heard that Cash4Gold had improved their operation after my experience. Evidently not enough for some customers. Seller beware!

Gold Investing - Karatage System

Karatage is a system of specifying the purity (or fineness) of gold as a fraction of 24 parts. For example, 18 karat gold is 18 parts gold out of 24 parts or 75% gold. Other common karat readings are 10 karats (41.66 % gold), 14 karats (58.33 % gold) and 22 karats (91.67 % gold).

American manufacturers of gold products are required to stamp each gold item with their mark or insignia and the gold content "quality mark" usually expressed in karats. A dirty little secret is the gold purity can be off as much as one-half karat and still be legal. That is, a gold item marked as 18k can actually be 17 1/2k and still meet the letter of the law.

When you sell your scrap gold to a gold company accepting such items they, as well as the refiner they ship the items to, are aware of this leeway in the law. It is also assumed that many if not most American manufacturers of gold products take advantage of this leeway and your buyer will set their buy price accordingly.

If you have traded in your scrap gold for cash and what you received seemed a little low (based on the gold purity of the items you sold), this may be one reason why.

American Eagle Coins Update

Well, it appears the webmaster for the U.S. Mint is back on duty. That is, new totals have been posted for both Gold American Eagles and Silver American Eagles.

As of today, January 25th, a total of 85,000 one-ounce Gold American Eagles have been produced. The numbers for fractional Gold Eagles are still showing a big fat zero so who knows when that program will start up again. If you remember, December of 2009 was the only month the fractional Gold Eagles were minted for the entire year and they were small numbers at that.

The big news is Silver American Eagles which are showing 3,592,500 produced so far in January. This is a huge number which shows the pent-up demand for the "poor man's gold". At this rate, the number of Silver Eagles minted in 2010 will far surpass 2009's total of 28,766,500.

If you are an investor of Silver American Eagles, I hope you are shopping around for the best price. It is surprising the difference in premiums being charged by various dealers, both large and small. Just be careful out there and make sure you get the most metal for your money.

Gold American Eagles - A Slow Start For 2010

I have been checking the U.S. Mint's 2010 production numbers for Gold American Eagles (and Silver American Eagles also). New updates are scarce so the numbers below may be less than actual coins minted but it is all they have posted on their web site as of this date.

So far in January 2010 20,000 Gold American Eagles in the one-ounce size have been produced. None of the fractional Gold Eagles have been reported as being minted so far this year. Silver American Eagles for January are stated as 367,500.

After last year's late start on production of fractional Gold American Eagles, I would have thought there would be some production of them reported this late in January. Maybe they had a change of heart again and decided to just concentrate on the one-ounce size. Stay tuned for more U.S. Mint numbers as I get them.

Gold American Eagles - Year End Totals

Now that 2010 is upon us, I want to share with you the total Gold American Eagles minted in 2009. You may remember from my previous posts that NO fractional Gold Eagles were minted until December of 2009 so these numbers are small compared to the one-ounce coins.

A total of 1,315,500 one-ounce Gold Eagles were minted in 2009. Of the half-ounce Eagles, a total of 110,000 were minted (in December of 2009). Likewise, a total of 110,000 quarter-ounce Eagles were minted in 2009 and 270,000 tenth-ounce Eagles were minted in 2009. That makes a total of 1,425,000 ounces of gold used for the U.S. Mints' Gold Eagle program.

Unofficially, the spot price of gold was at $1096.50 per ounce at the end of 2009 which is a gain of $222.90 over the previous year's close which represents a 25.52 percent increase. Gold's high for the year was on December 3rd when the price per ounce reached $1,226.10.

On a related note, the "poor man's gold" (silver) had a banner year. A total of 28,766,500 Silver American Eagles were minted in 2009.

2010 should be a very interesting year for the precious metals.

Gold American Eagles - More Restrictions

In my last post, I discussed the good news of Gold American Eagle Fractional Gold Coins being available again. Well after a VERY short run, the U.S. Mint announced restrictions on availability of these and other U.S. gold coins.

After one day, the American Eagle Gold Tenth-Ounce Coin inventory was depleted and the other fractional eagles are in limited supply. Also production of the one-ounce Gold Eagles remain suspended until further notice (none have been produced in December as of yet).

The U.S. Mint also announced that sales of the popular American Buffalo one ounce gold coin have been suspended, with no new sales now planned until some time in 2010.

With this news, don't expect to see premiums (the amount charged over the spot price of gold) of these gold coins to go down anytime soon. Be sure to shop around to find the lowest premiums.

Gold American Eagle Fractional Coins Are Back

The U. S. Mint is again producing Gold American Eagles in half-ounce, quarter-ounce and tenth-ounce sizes. These fractional coins (so named because they are smaller than one ounce) have not been produced since October of 2008 due to a lack of required planchets (blanks).

So far in December (the first month production started again), 56,000 half-ounce gold eagles, 58,000 quarter-ounce eagles and 260,000 tenth-ounce gold eagles have been produced. With these coins available again plus Friday's drop in the spot gold price, you may want to consider investing in a few of these gold coins.

Before you invest, make sure you know the current spot price of gold. I can't give you specific advice on how high of premiums you can expect but you must shop around since premiums can vary by quite a bit. And remember the smaller the coin, the greater the premium. In other words, two quarter-ounce gold coins will cost you more than one half-ounce gold coin.