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<p>[QUOTE=&quot;tedmurlap, post: 1091653, member: 29006&quot;]The U.S. mint is authorized to sell gold eagle bullion coins at a sufficient markup to recover its costs, but not to make a profit on them, unlike the base metal coins which it&#039;s authorized to sell at face value. However, the current markup on gold eagles appears to be far higher than what&#039;s authorized.</p><p><br /></p><p>A penny costs less than two cents to manufacture, including the cost of the metal. A nickel costs less than 10 cents, more than six cents of which is the cost of the metal. (This means the mint sells pennies and nickels at a loss, which is why there are calls to eliminate them or change their metal composition.) A golden dollar costs 12 cents, more than seven cents of which is the cost of the metal. Five cents for each golden dollar, and the similar few cents for each quarter, dime, and half dollar, covers the cost of processing the raw metals, making the coin, doing quality control, packaging it up in bulk, shipping it out, and covering all of the mint&#039;s operating expenses. Only the cost of the raw metals is excluded from that five cent cost. Even if we&#039;re very generous and assume that manufacturing a bullion gold eagle costs twenty times what it costs to manufacture a coin from copper, nickel, and zinc for circulation, that&#039;s still only one dollar for the gold eagle, excluding the cost of the metal.</p><p>The mint could recover its costs on golden dollars even if it sold them each for 12 cents. It&#039;s authorized to sell them each for $1, and thus make a profit, which is delivered to the treasury. It could recover its costs on gold eagles if it sold them each for $1 plus the cost of the metal. Ten years ago, the mint&#039;s markup for gold eagles over the metal cost was more than $10. Why? Anyway, the mint was definitely recovering at least its costs. Even if we assume that there were some legitimate costs being covered by that high markup, it would still be less than $20 today, adjusting for inflation. Yet the markup today is almost $60. Even if the mint was just recovering its costs ten years ago, it&#039;s recovering three times its costs today. This is because, rather than just recover its costs, the mint sets the price of each coin in proportion to the costs of the raw metals used to make it. But the mint isn&#039;t authorized to do that. It&#039;s only authorized to add the costs of the metals, not multiply by them. As the costs of the metals increase, as they&#039;ve been doing over the past ten years, the markup on each new coin as a percentage of the cost of the metals should decrease, not remain constant. With a current gold cost of $1340/oz, silver cost of $28/oz, and copper cost of $4.33/lb, a one-ounce gold eagle should cost less than $1360 even while giving the mint a very generous benefit of the doubt regarding its costs, but in fact it costs $1400. This does not appear to be legal.[/QUOTE]</p><p><br /></p>

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