Legal Eagles

The eagle soared higher and faster than anyone had anticipated. All 800,000 American Eagles, the first U.S. gold bullion coin ever issued, were snatched up within two days last week. Twenty-five authorized dealers bought the entire supply of 558,000 oz., worth some $237 million, creating a temporary shortage of the costly coinage. "We're thrilled about it," said Hamilton Dix, a spokesman for the U.S. Mint. "We expected to sell 2.2 million oz. in the first twelve months. At this rate we'll reach that in ten days."

The coins, which are legal tender, have face values of $50, $25, $10 and $5 and weigh, respectively, one ounce, one-half ounce, a quarter of an ounce and a tenth of an ounce. The Eagles will sell to consumers for the market price of gold, which closed last week at $425 per oz., plus an estimated 8% markup. It may take as long as two weeks for the currency to filter down to retail dealers, who will then offer them to the public. The U.S. last issued gold coins in 1933, but then they traded at their face value; bullion coins are literally worth their weight in gold.

The mint will offer an additional 152,000 oz. this week and 125,000 oz. every week after that. "We'll keep these coins coming as long as there's demand," says Dix. "We're working 24 hours, seven days a week." Unlike gold commemorative coins issued by the Government, which are limited editions, there is no ceiling on the number of Eagles that can be produced.

The minting and sale were authorized by Congress last year after the President issued an Executive Order banning the importation of Krugerrands from South Africa. That left the Canadian Maple Leaf as the major bullion coin available in the U.S. The public's appetite for such coins is already large, and a little-known fact will even enhance it: the new tax bill signed into law last week allows people to put gold coins in their IRA accounts, which surely will be used as an added selling point by dealers.