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Buffalo gold ready for market

One-ounce Buffalo gold bullion coins will hit the market Monday as the Mint begins sales to its Authorized Purchaser network.

The Mint expects to be able to meet any demand for the 2011 gold coin, so it will not impose any allocation measures, another term for rationing. The Mint also has a plentiful supply of American Eagle gold bullion coins so does not ration these either.

Because the coin is .9999 fine gold, it has special appeal to precious metals buyers in the Far East. This is why the bullion coin was introduced in the first place in 2006 as the American Eagle was authorized by Congress in 1986 to challenge the South African Krugerrand. The Eagle was given the same fineness of .9167 as the Krugerrand, meaning it is 22-karat gold instead of 24.

Historically, the 22-karat alloy was used because it made the resulting gold coin harder to stand up to daily use better than the softer 24-karat alloy, which wears much more rapidly.

Since bullion coins do not circulate, the issue of alloy hardness is secondary in the minds of Far Eastern buyers to a desire to obtain the most pure gold possible.

Checking the APMEX website, the firm says it will offer the coins March 25 or sooner for a markup of $79.99, or 5.67 percent, which seems to confirm the Mint’s confidence that there will be ample supplies.

The proof version is scheduled to go on sale to collectors May 19.