Fractional Coins produced by the U.S. mint are physically smaller versions of popular modern U.S. coins which resemble their full-sized counterparts in every way. They are sought after not only for their unique numismatic status, but their affordability as well.
As global gold prices reach higher levels never-before seen, more investors are entering precious metals markets. Traditionally, these buyers would purchase silver, or another more affordable metal, hoping rising gold prices would have an effect on their metal of choice as well. They watch spot prices skyrocket from the sidelines, not able to afford to buy in and benefit from growing gold demand. With fractional coins however, they are now able to invest in gold and profit directly from rising prices.
Normally, fractional coins are offered throughout the year alongside their larger versions. For the past two years (2009 & 2010) however, the United States Mint has intentionally delayed the release of fractional coins to allow their efforts to be concentrated on the production of regular 1 ounce sizes of each coin. The most recent fractional coin release was the 2010 Fractional Gold Eagle.
Released on June 10, 2010, the Fractional Gold Eagle has quickly been scooped up by investors, albeit at a slightly slower pace than originally expected. When compared to sales figures of the 2009 Fractional Gold Eagle in fact, the numbers are a little disappointing. Sales of all three 2010 Gold Eagle coins, the 1/10 oz., the 1/4 oz., and the 1/2 oz. sizes, after 5 days on the market totaled 310,000 units – disheartening when compared to 2009 figures, when more than 345,000 were sold on opening day. This apparent decline in demand may not be as easy to interpret as it may seem. There are a few differences in the circumstances of the release of both coins.
2010 Fractional Gold Eagles were released under an “allocated” or “rationed” process; buyers were limited in how many of the coins they could buy. This was not the case in 2009. Perhaps more importantly however, the date of release in 2010 was relatively early when compared to the 2009 date. This could have affected sales figures in three ways. It may be that because the 2009 Fractional Gold Eagles were released on December 3, 2009, and buyers had a much longer waiting period, they had a much greater length of time to anticipate the release of the coin, adding to its allure. Secondly, the release of the 2010 Fractional Gold Eagle was just a little more than 6 months after the release of the 2009 coin. It is probable that the 2010 release would have been more successful had it have taken place closer the December 3 date. Lastly, because the 2009 coin was released closer to the holidays than the 2010 coin, it is likely there was additional buying in 2009 for the purpose of gift-giving.