Around 40 years ago, when gold was surpassing $500 per ounce, a few investment gurus were predicting the metal to potentially soon surpass $3,000 an ounce. Most money advisors justifiably laughed or rolled their eyes at such a forecast. After all, what was the basis for a hunk of shiny metal to rapidly soar to such heights?
It turns out, both sides were correct. Gold did exceed $3,000. Two weeks ago, it hit $3,800. Of course, it took four decades to do it so the word “soon” wasn’t exactly on target.
I’ve read one money management firm is currently calling for gold to exceed $4,000 by year-end. That would mean a 6.5 percent jump between now and then.
All these prophesies of price pale in comparison to something that also happened a few weeks ago. Three US gold coins technically sold for over one-million dollars per ounce. Such a price might sound stratospheric. Almost. The coins are more specifically “exospheric” – the altitude levels in which space ships and shuttles fly.
Here’s why.In 2000, the US Mint and government tried to redeem itself after the disastrous 1979 launch and subsequent collapse of the ill-fated Susan B. Anthony dollar coins. Because of their size and silver appearance, they were quickly mistaken for quarters. The public hated them.
The assumed “solution” was a revised dollar coin to be introduced in 2000 in a golden color thanks to a brass outer coating. The idea was to imitate the successful Canadian “Loon” dollar coin released in 1987 and embraced by their citizens. (Note: Canada simultaneously eliminated the paper dollar note. Ergo, the populous really had no other option or choice for a dollar denomination.)
After a national competition with submissions from 120 artists, the chosen design on the new US golden dollar coin featured an image of Sacagawea, a Shoshone Indian woman. She became renown for joining the Lewis and Clark westward journey in 1804 acting as a guide, interpreter and diplomat for the explorers when they encountered other American Indians.
Prior to their release to the public, 12 very special Sacagawea dollar coins were struck in actual 22-karat gold. Those were put aboard the shuttle Columbia STS-93 to be carried into space. The corollary was that 1999 mission was the first to be commanded by a woman, Col. Eileen Collins. Sacagawea and Collins share the rare distinction of leading significant explorations centuries apart.
Other than that, the exact reason for placing the coins on the shuttle is unclear besides creating some unique curiosities. Upon the ship’s return, all gold coins disappeared into dark storage in the vaults of the US Gold Depository at Fort Knox.
The one and only time the public has seen the rarities is when they were displayed at the 2007 American Numismatic Association’s World’s Fair of Money convention in Milwaukee. Until now.
Two weeks ago, the US Mint opted to part with seven of the coins at auction. As the only Federally-issued U.S. coins to be struck exclusively for spaceflight interest has been high. The Mint entrusted the gold coins to Stack’s Bower’s Galleries for the sale.
Weighing a half-ounce apiece, the specially struck coins appear fairly identical. Of course, collectors are fanatics about appearance so minuscule differences in grade mean a lot. Of the seven flown in space, one sold for $360,000. Another brought $380,000. Two more broke the next barrier at $400,000 and $420,000. The fifth soared to $500,000 with the final two being hammered down for $550,000 each. At those prices, at a half-ounce apiece, it puts the value of one-ounce of gold over one million dollars.
Most thought-provoking is the simple fact that the gold in those half-ounce coins is objectively identical to any other 22-karat American gold coin. A half-ounce American Eagle currently sells for a bit over $1,900. So, what justifies the astronomical price of the seven Sacagawea’s? I’d say, human wonder and the romance of space.
Similarly, in 1983, the US Postal Service loaded 260,000 special envelopes with “Express Mail” stamps attached onto the shuttle Challenger. They then sold them to collectors. We all snapped them up for about $15 apiece. To us, the fact the envelopes and coins orbited the earth is magical. So, while the orbited gold coins may be just like regular gold coins, for humans they will forever be collectibly special and worth an out-of-this-world price.
But, does it really justify a gold value of one-million dollar an ounce? To a few millionaires, it clearly does.
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