It wouldn’t fit in anyone’s pocket. Nobody took home the big Canadian $1 million gold coin offered in Teletrade’s Aug. 16 auction. “While the big Canadian coin did not sell  it came very close  the reserve was $2 million, and the bid was up to $1,950,000,” reported Teletrade President Ian Russell. The 100-kilogram coin, created by the Royal Canadian Mint in part to highlight availability of .99999 fine gold in its Maple Leaf bullion coin offerings, contains more than $2 million in gold.

The Royal Canadian Mint, housed in a building reminiscent of a medieval castle, is a popular place for tourists and school groups who come to see the mint’s specialized presses stamp out collector coins, medallions and more. But tucked inside the nearly century-old building on Sussex Drive is another line of business that Canadians rarely see. The Crown corporation runs a world-class gold refinery, processing billions of dollars worth of precious metals each year. While scarcely known to the public, the mint’s refinery has garnered a reputation for honesty in the mining industry.

Gold and silver fell on speculation a slowing U.S. economy will reduce demand for precious metals. The price of gold dropped 2.2 percent last week as the Dow Jones Industrial Average tumbled 1.2 percent. The Dow index fell as much as 0.7 percent today, erasing early gains. The U.S. Federal Reserve cut its discount rate on Aug. 17 to head off the rout in credit markets. Gold is still up 4.5 percent this year. “The risk to the economy is on the downside,” said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. “People are looking for safe returns. Gold doesn’t yield returns.”

Precious metals have been one of the top performing asset classes over the past six years, and investors wanting to add a precious metals component to their portfolios are often overwhelmed by the number of investment vehicles available to them today. Alternatives include precious metals futures and options contracts, government certificates, “digital gold,” exchange traded funds (ETFs), mutual funds, mining shares, as well as buying the physical bullion itself. All enable an investor to gain exposure to the precious metals markets and participate in what many investment experts foresee as a continuing multi-year secular market.

Gold and silver rebounded in New York after the Federal Reserve unexpectedly reduced its discount rate, sending the dollar lower and increasing the investment allure of precious metals. The Fed said it is prepared to take further action to “mitigate” damage from the rout in credit markets. Commodities yesterday plunged the most in at least five decades as crashing equities led investors to sell metals, energy and grains to raise cash. Gold often moves in the opposite direction of the dollar, which fell as much as 0.9 percent versus the euro today.