By James M. Carrillo
Sr. Broker, Swiss America
American Eagle Proof Gold has been a market leader for the better part of the decade. Unlike bullion, if owned physically outside of an IRA, it is a completely private way to own gold on both the purchase and the sale.
American Eagle Proofs are currently on sale in a market that is red hot and expected to become hotter over the coming months and years. Why? People are seeking privacy, so we believe this area of the gold markets demand will begin to exceed its VERY limited supply.
Unlike bullion, its mintages are miniscule. Note: On the charts below that Proofs vastly outgained bullion for many years until gold hit a short term peak. Then subsequently Obama began his push for Health Care reform, within that healthcare bill was a hidden provision requiring a 1099 to be issued on all purchases. ANY business that had a purchase transaction in excess of $600.00 was required issue a 1099 to the seller. Many felt like this would effect American Eagle Proofs. Unlike Bullion, American Eagle Proof Gold coins have never required any reporting and many gold buyers believed they were about to lose their privacy and they began to take profits. This coincided with a lag in demand in the market, gold and proof prices slumped.
Then, as things began to unravel in the financial world, once again gold began its rise. Bullion led the charge while Proofs lost their luster due to the Healthcare bill provisions. Gold rose 50% while, for the first time in a decade, American Eagle Proofs literally went flat after the sell-off.
Enter 2011, the uproar from both businesses and the IRS pressured the Administration to remove this 1099 provision. Businesses said they would go out of business having to 1099 every person they purchased $600.00 or more from. It didn't matter if it was paper, printers, forms, computer components, gold or water. Also the IRS said they would never be able to keep up with it. In fact this had NOTHING to do with gold but it effected certain areas of the gold market. On April 5th 2011 the President took the provision out of the Healthcare bill and the senate repealed the bill.
Note that since this repeal Proofs have once again began to outperform bullion. We believe this area of the market is ON SALE in a market where sales simply do not exist. Let alone a private area of a market that has been a leader and top performer for the better part of the past decade.
With many economists projecting gold to move into the $5,000.00 - $10,000.00 range by the end of this decade, it is time to add Gold American Eagle Proofs to your holdings while they are on sale.