The other day there was an article about Canada producing a giant gold coin to help advertise their regular size gold coins. The face value of the coin was much less than the actual gold value. How come?
What am I missing here? It’s a giant gold replica of smaller coins. Would you like them to mind a giant coin that is of different denomination to adjust for value increase?
At today’s “spot” close of 687.95 (US), the $1mm Canadian coin is composed of 2,211,759 (US ) worth of gold - 3215 troy ounces of 99999 fine gold.
At today’s exchange rates, that seems to come out to $1,997,975 (CDN) or a nearly 2:1 intrinsic value to face value.
Paging samclem… This is completely upside-down compared to regular coins that should to be intrinsically worth much less than face value*. What’s keeping well-heeled people from snapping these things up and selling them as scrap on the spot market?
The US quarter has an intrinsic value of about seven cents, and the dime has an intrinsic value of less than three cents. Pennies (1982 to current) are nearly a wash - their intrinsic value is .996 cents each.
Because the mint doesn’t sell them at face value. Bullion coins are sold at prevailing market prices. Note that they refer to the face value as “nominal”. American Gold Eagles, for instance, are 1 ounce of gold and are denominated at $50.