Philip Diehl on the Booming Business of Gold Coins

Odd Lots Podcast Summary: Philip Deal on the Booming Business of Gold Coins

Release Date: May 12, 2025

Podcast Information:

Title: Odd Lots
Host/Author: Bloomberg
Description: Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets, and economics. Join the conversation every Monday and Thursday.
Episode: Philip Deal on the Booming Business of Gold Coins

Introduction

In this episode of Odd Lots, hosts Joe Weisenthal and Tracy Alloway delve into the thriving market of gold coins with special guest Philip Deal, President of the US Money Reserve and the 35th Director of the US Mint. The discussion spans the resurgence of gold as a safe-haven asset, the intricacies of the gold coin market, and the evolving demographics of gold investors.

Guest Background

Philip Deal brings a wealth of experience to the conversation, having served as the Director of the US Mint where he was instrumental in launching iconic projects such as the Sacagawea Dollar and the 50 State Quarters program. As President of the US Money Reserve, he oversees the retail of gold, silver, and platinum coins, catering to both government-issued and international coins.

The Resurgence of Gold

[01:38] Tracy Alloway:
Tracy shares her personal connection to gold, mentioning her inherited collection of gold and silver coins from her father. She appreciates the tangible satisfaction of owning physical coins.

[03:05] Tracy Alloway:
Tracy highlights gold's recent performance, noting that gold reached a record high in mid-April, dipped, and is now nearing that peak again.

[03:18] Joe Weisenthal:
Joe comments on gold's resilience amidst market and economic chaos, stating, "Gold is up. So hats off. Yes."

Marketing and Cultural Significance of Gold Coins

[03:31] Tracy Alloway:
Tracy discusses the cultural values embedded in gold coin advertisements, such as the portrayal of gold coins as symbols of security amidst inflation and global instability.

[04:16] Joe Weisenthal:
Joe praises the design elements of coins, noting how they evoke heritage and cultural narratives.

Philip Deal on US Money Reserve and the Coin Market

[05:52] Joe Weisenthal:
Joe introduces Philip Deal, highlighting his accomplishments at the US Mint and his current role at the US Money Reserve.

[06:06] Philip Deal:
Philip explains that US Money Reserve is a retailer of gold, silver, and platinum coins, primarily focusing on US government-issued coins and international coins. He emphasizes their unique marketing approach and distinguishes between bullion and collectible coins.

Notable Quote:
[06:50] Philip Deal:
"Gold has performed extraordinarily well over the last 25 years in both good times and bad times."

Launching the Sacagawea Dollar

[08:13] Tracy Alloway:
Tracy inquires about the factors that contribute to a coin's popularity.

[08:45] Philip Deal:
Philip outlines the key elements: denomination, metal type, and design. He recounts the successful launch of the Sacagawea Dollar, attributing its success to a compelling design inspired by American history and strategic market research.

Notable Quote:
[11:05] Philip Deal:
"We produced over a billion Sacagawea dollars in the first year, distributed primarily through Walmart, which led to an enormous success."

Challenges in Coin Circulation

[15:28] Philip Deal:
Philip discusses the logistical challenges in introducing a new coin denomination, such as ensuring widespread acceptance and overcoming resistance from banks accustomed to handling bills instead of coins.

[17:11] Joe Weisenthal:
Joe appreciates the entrepreneurial spirit required to successfully launch a government-issued coin, comparing it to a commercial product launch.

Supply Chain and Pricing of Gold Coins

[18:13] Tracy Alloway:
Tracy questions the factors that determine a coin's value, distinguishing between precious metal content and collectible value.

[19:56] Philip Deal:
Philip clarifies the different categories of coins: bullion, collectible (numismatic), and commemorative. He explains that bullion coins are sold at premiums over spot prices due to their metal content, while collectible coins command higher prices based on their rarity and design.

Notable Quote:
[21:55] Tracy Alloway:
"Would an American Eagle count as a bullion coin or a finite collectible item?"

[22:04] Philip Deal:
"There are two versions of the American Eagle: the bullion coin, produced in large quantities, and the proof gold eagle, a collectible with a higher premium."

Retail Business and Market Dynamics

[28:20] Joe Weisenthal:
Joe transitions the conversation to the business side of selling gold coins, inquiring about the relationship between gold prices and consumer demand.

[28:48] Philip Deal:
Philip confirms a strong correlation, noting a significant increase in demand alongside rising gold prices.

[29:18] Philip Deal:
Philip discusses the shifting demographics, revealing that younger generations like Millennials and Gen Z are showing greater interest in gold than Boomers, contrary to previous trends.

Notable Quote:
[32:37] Philip Deal:
"Gold is the ultimate safe haven. It's been around for 5,000 years and has always had value worldwide."

Gold vs. Silver: Investment Considerations

[34:38] Tracy Alloway:
Tracy asks whether one should invest in gold coins versus gold mining stocks.

[34:43] Philip Deal:
Philip explains that mining stocks often underperform gold due to increasing mining costs and geopolitical risks, making gold a more reliable hedge.

[39:35] Philip Deal:
Philip differentiates between gold and silver investments, highlighting gold's role as a pure hedge against economic downturns and silver's susceptibility to industrial demand.

Storage and Security of Physical Gold

[36:57] Joe Weisenthal:
Joe inquires about the supply chain for selling large gold bars and their secure delivery to customers.

[37:22] Philip Deal:
Philip outlines the sourcing process from major refiners and wholesalers, emphasizing the competitive nature of the market.

[37:48] Tracy Alloway:
Tracy raises concerns about the storage risks of physical gold.

[37:55] Philip Deal:
Philip addresses storage solutions, suggesting safe deposit boxes as space-efficient and secure options for holding substantial gold values.

Designing Coins and Legislative Considerations

[24:45] Tracy Alloway:
Tracy probes into the balance between profitability and design in coin production, referencing debates about the penny's existence.

[25:30] Philip Deal:
Philip discusses the constraints imposed by legislation on coin specifications and the economic implications of producing coins like the penny, advocating for its elimination due to negative seigniorage.

[41:53] Philip Deal:
Philip shares his experience in writing legislation that allowed for the creation of a platinum coin, inadvertently leading to discussions about the trillion-dollar coin.

Notable Quote:
[43:27] Joe Weisenthal:
"Philip Deal, you know, I consider you a hero because I never really worry about the debt ceiling being breached because I know that ability to mint a trillion-dollar coin could come up and that will save us in the end."

Conclusion

The episode concludes with hosts and Philip Deal reflecting on the timeless value of gold, the importance of thoughtful coin design, and the evolving landscape of gold investment. The conversation underscores gold's enduring appeal as both a physical asset and a cultural symbol.

[45:14] Tracy Alloway:
Tracy encapsulates the discussion by likening coins to "physical memes" that transmit cultural values and ideas.

[45:22] Final Remarks:
Joe and Tracy wrap up the conversation, highlighting key takeaways and inviting listeners to explore more about the gold coin market through their platforms.

Key Takeaways

Gold as a Safe Haven: Consistently performs well in both stable and turbulent economic times, making it a reliable investment.
Design and Cultural Significance: The success of gold coins like the Sacagawea Dollar hinges on appealing designs that resonate with cultural and historical narratives.
Evolving Demographics: Younger generations are increasingly interested in gold, challenging previous trends dominated by older investors.
Market Dynamics: Rising gold prices correlate with increased demand, while mining stocks may underperform due to higher operational costs and geopolitical risks.
Investment Diversity: While physical gold offers security and tangible value, diversification remains crucial in any investment portfolio.

Notable Quotes with Timestamps

Philip Deal [06:50]:
"Gold has performed extraordinarily well over the last 25 years in both good times and bad times."
Philip Deal [11:05]:
"We produced over a billion Sacagawea dollars in the first year, distributed primarily through Walmart, which led to an enormous success."
Philip Deal [21:55]:
"Gold is the ultimate safe haven. It's been around for 5,000 years and has always had value worldwide."
Joe Weisenthal [43:27]:
"Philip Deal, you know, I consider you a hero because I never really worry about the debt ceiling being breached because I know that ability to mint a trillion-dollar coin could come up and that will save us in the end."

Conclusion

This episode of Odd Lots offers an insightful exploration into the booming business of gold coins, enriched by Philip Deal's extensive expertise and firsthand experiences. From the strategic design of coins to understanding the nuances of the gold market, listeners gain a comprehensive understanding of why gold coins remain a coveted investment asset.

For more discussions like this, visit Bloomberg Odd Lots and join the conversation in their Discord community.