This week, the Numismatic Guaranty Corporation (NGC) and participating vendors are announcing the debut of a new coin service - certification of authenticity of bullion coins that can be held by precious metals Individual Retirement Accounts.

The main bullion-priced product for which this is expected to be used is the one-ounce gold American Eagle. One requirement of precious metals IRAs is that the merchandise must be stored at an independent facility.

If an investor is holding a 20-coin tube of American Eagles in an allocated account, for instance, there really isn't any proof that a particular group of 20 coins is the same one originally received for that investor.

With the new NGC certification, each coin will be encapsulated in a holder that identifies the coin by issuing country, denomination, date, gold purity and content, and by an individual serial number. This makes it possible for each of the 20 coins in this hypothetical example to be specifically identifiable as being the exact same coins as originally received.

This certification service will cost less than others because NGC will not be grading the coins. It looks like the retail cost for this certification will be about $10-15 per coin. For most knowledgeable investors, this is an unnecessary expense. But, for those who are not as knowledgeable or who are extremely wary, this extra certification of authenticity could be considered as low-cost insurance.

The initial thrust of the marketing campaign for this new product is to displace demand for proof gold Eagles in precious metals IRAs. The U.S. Mint has not yet been able to manufacture any proof Eagles of gold, silver, or platinum this year. Combined with aggressive marketing campaigns by some companies, prices of proof gold Eagles have soared by a few hundred dollars in the recent past.

The angle used by the companies that market proof Eagles in IRAs is that this is a way to own "numismatic" coins in an IRA. The reason why these companies push proofs rather than the uncirculated coins is that the marketers make much larger profits. They have no incentive to want to persuade customers to purchase products on which they make lower profits.

Still, I expect this new product to make significant inroads into demand for proof gold Eagles, which will have the effect of knocking down the prices for them. Just in the past week or so, as news of this new product has been leaking, the wholesale price of proof gold Eagles has dropped about 10 percent! There are hundreds of thousands of proof gold Eagles around, far too many to support any significant premium to the bullion issues over the long term.

If you own any proof gold Eagles of any and all sizes, sell or swap them immediately to take advantage of their current extra high premium. By all means, feel