NEW YORK (CNN/Money) -
Will a new gold coin make a mint for the U.S. Mint?
On Tuesday, officials in Washington announced the planned introduction of the first 24-karat gold coin in the nation's history. The piece, set to be rolled out sometime in 2006, will boast a 99.99 percent "fineness" rating. In other words, it's almost perfectly pure gold.
When the Mint releases a coin into general circulation, such as the recently introduced five-cent piece, the purpose is simply to provide a medium for transactions -- a few nickels to rub together, as it were.
The new gold coins are different. They won't enter into general circulation, but will be sold instead to investors and collectors.
The purpose of rolling them out, the Mint is making clear, is to make money -- perhaps a lot of it.
"The United States Mint intends to match and exceed world class business practices with this new 24-karat gold bullion coin," said Henrietta Holsman Fore, director of the U.S. Mint, in a statement.
"There is a demand, both here and abroad, for 24-karat gold coins," she said. "We want to meet this demand by providing the highest quality and most beautiful coins in the world."
According to the Mint, the global market for 24-karat bullion coins is $2.4 billion.
It's clear that the government is responding to competitive pressure. As much as 60 percent of investor-grade gold coins sold internationally last year were 24-karat, with Canada's Maple Leaf piece one of the most popular.
Until now, the highest grade U.S. coins have been the 22-karat American Eagle series, first introduced in the 1980s after Congress banned the sale of South African Krugerrands to protest apartheid.
The Mint claims that the American Eagle accounts for 95 percent of all gold coin sales in the United States. But on the much larger international market, 24-karat pieces are more popular. Washington found itself without an entry in the field.
Although they carry nominal face values, gold coins minted for investors and collectors sell immediately at prices based on the commodities markets, where gold currently sells for more than $425 an ounce. The coins will be literally worth their weight in gold.
"The program will have two phases," the Mint's statement noted, "starting with an investor-grade uncirculated 24-karat gold bullion coin, followed by a 24-karat numismatic collector proof coin."
No specific designs or denominations for the new coin have been announced. The Treasury Department will undergo a period of public review before releasing those details later this spring.
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