Gold mining companies are an investment method for gold. These do not represent gold at all, but rather are shares in gold mining companies. If the gold price rises, the profits of the gold mining company to rise and the share price may rise. However, there are many factors to take into account and share price may not rise when the gold price increases. Mines are commercial enterprises and subject to problems such as flooding, subsidence and structural failure, as well as mismanagement, theft and corruption. If serious, such factors can lower the share prices of gold mines. Unlike gold bullion, which is regarded as a safe haven asset, unhedged gold shares or funds are regarded as high risk and extremely volatile. This volatility is due to the inherent advantage in the mining sector. For example, if you own a share in a gold mine where the costs of production are $300 per ounce and the price of gold is $600, the mine's profit margin will be $300. A 10% increase in the gold price to $660 per ounce will push that margin up to $360, which actually represents a 20% increase in the mine's profitability, and potentially a 20% increase in the share price. Conversely, a 10% fall in the gold price to $540 will decrease that margin to $240, which actually represents a 20% fall in the mine's profitability, and potentially a 20% decrease in the share price. The amplification of gold mining profits during periods of rising prices can cause a gold rush in mining exploration. To reduce this volatility, some gold mining companies hedge the gold price up to 18 months in advance. This provides the mining company and investor with less exposure to short-term gold price fluctuations, but reduces potential returns when the gold price is rising.

American Gold Eagle

The American Gold Eagle is an official gold bullion coin of the United States. Over the years, the gold Eagle from the US mint have become the USA’s most popular bullion coin, and our biggest gold coin seller by far. Each 1-ounce gold Eagle contains a full 31.1 grams of pure gold, with an additional alloy of silver and copper, bringing the total weight up to about 33.9 grams. Coins Offered in 1/10 oz, 1/4 oz, 1/2 oz, and 1 oz denominations. U.S. government guarantees them to contain the stated amount of actual gold weight in troy ounces. By law, the gold must come from sources in America, with an additional alloy of silver and copper to produce a more wear-resistant coin of .9167. It authorized by the United States Congress and backed by the United States Mint for weight and content. The market value of the coins is generally about equal to the market value of their gold content, not their face value. Gold Eagles from the U.S. Mint are the most popular gold bullion coin in this country, and now make up over 80% of the U.S. physical gold bullion market. This bullion product has been a tremendous success for the U.S. Mint.; their actual selling prices vary daily based on the current spot price of gold. The face values are proportional to the weights. The one-ounce gold Eagle has a $50 nominal face value, is 91.67% fine gold, and weighs 1.0909 troy ounces. The most popular size bullion coin issued 20 coins per Treasury tube. The half-ounce gold Eagle has a $25 nominal face value, is 91.67% fine gold, and weighs .5455 troy ounce. The least popular size bullion coin, and often the lowest mintage, it is issued 40 coins per Treasury tube. The quarter-ounce gold Eagle has a $10 nominal face value, is 91.67% fine gold, and weighs .2727 troy ounce. About the size of a nickel, it is popular in jewelry. It issued 40 coins per Treasury tube. The tenth-ounce gold Eagle is a $5 face value coin, 91.67% fine gold (22 karat), and weighs .1091 troy ounce. Smaller than a dime, it is a popular small gift item. It issued 50 coins to a Treasury tube. The obverse design features a rendition of Augustus Saint-Gaudens' full-length figure of Lady Liberty with flowing hair, holding a torch in her right hand and an olive branch in her left, with the Capitol building in the left background. The reverse design, by sculptor Miley Busiek, features a male eagle carrying an olive branch flying above a nest containing a female eagle and her hatchlings.