The United States Mint doesn’t sell gold bullion coins – the kind bought by investors, rather than collectors – to just anyone.
The U.S. Mint sells them to private-sector precious metals dealers that meet its rigorous financial and professional standards.
Jack Hunt Coin Broker Inc. has joined that elite company, now one of only a dozen “authorized purchasers” of gold and platinum coins produced by the U.S. Mint.
The Kenmore-based business has been an authorized purchaser of U.S. Silver Eagle coins from the U.S. Mint since 1987. Obtaining the same status for gold bullion coins took several years and “was the most difficult thing we’ve ever achieved,” said Scott Hunt, president and owner.
“It adds and lends credibility to our business, the ability to be able to say we are now an authorized purchaser from the U.S. Mint for gold and silver,” Hunt said. “There are certain players in the market, they don’t even want to talk to you unless you have both designations.”
On its website, the U.S. Mint said that to qualify as an authorized purchaser of gold bullion, an applicant must have a tangible net worth of at least $25 million for the last three of its fiscal years. (Alternatively, a firm can have a tangible net worth of at least $20 million and a letter of credit to bring the total to $25 million.)
The U.S. Mint wants purchasers who are “market makers,” capable of selling or buying large lots of gold bullion coins or bars, Hunt said. “What they don’t want at all is, for instance, a large online retailer and all they do is sell, and they make no assurances or guarantees that they will buy back the product that they sell.”
One example of the financial strength the Mint looks for in an authorized purchaser: A firm needs to have sold at least 100,000 ounces of gold or bullion coins in any 12-month period since 1990 in order to be approved.
Jack Hunt Coin Broker’s customers primarily are small- to medium-size coin dealers across the United States, Hunt said. He estimated only 3 percent of its customers are in Western New York. The firm’s new status as an authorized purchaser of gold bullion coins should open the door to more customers around the country, he said.
The 1-ounce gold bullion coins feature an image known as “Walking Liberty,” depicting her holding a torch and an olive branch. Hunt said many retail customers buy the coins to diversify their assets.
“They want some of what they invest in to be tangible, that they can hold, that they can store, that’s not a piece of paper that says it’s worth something until it’s not.”
The spot price for gold can fluctuate greatly. On Friday afternoon, it was more than $1,100 per ounce.
Jack Hunt Coin Broker evolved from a traditional coin shop started by Scott’s father in 1968.
It is now a wholesale and retail distributor of gold, silver and platinum bullion coins and bars, and a purchaser of scrap precious metals.
Hunt said it was tough to predict how much more gold his business will sell as a result of the new designation, given the volatility of the precious metal’s price: “Will we be selling more than we’re selling now? Absolutely.”