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Gold Investment Potential
The latent investment potential that pre-1933 gold coins represent numismatically, particularly the European variety, is another consideration we must make. This potential is not too different from the one presented by U.S. twenty dollar gold pieces and silver dollars in the 1950s and 1960s. This was when early accumulators had the permission to buy quality specimens in bulk at slight premiums over the bullion price, ten put their acquisitions away and wait for the market to come to them. Those investors experienced multiple returns later, during the gold bull market in the 1970s and 1980s, when scarcity and quality started to influence pricing. Bags of uncirculated silver dollars and rolls of twenty dollar gold pieces then became eligible for selling and culling at premium prices by date, grade, and mint mark.
Tere is no way of knowing for sure if a similar situation will develop with pre-1933 European gold coins in the near future or not, but the opportunity doesn’t present any additional risk for those who already have an interest in owning gold. Historic European gold coins give us great, largely untouched, and potentially lucrative opportunities in the field of gold investing nowadays.
No treatise on the subject of pre-1933 gold coins would be complete without a mention of one of the best gold investments: the United States 20 dollar gold pieces in low-grade uncirculated condition. If gold is the immovable North Star of investments – the center around which the universe of financial assets rotates – then the pre-1933 twenty dollar gold pieces are the solid foundation upon which the modern gold portfolio is built. Pre-1933 twenty dollar gold pieces, which contain almost one ounce of gold (0.9675 ounce) loosely track the gold price. These are also considered collectors’ items by the government in many of the laws and regulations concerning gold promulgated since the early 1930s. The Liberty, minted from 1840 to 1907, and St. Gaudens, minted from 1907 to 1933, have become the most frequently traded because their prices are most of the time close to the bullion value, but they are still viewed as collectors’ items. In the semi numismatic grades, their value is greatly influenced by the price of gold. The premium expands or contracts due to strengthening or diminishing demand. This range can change expandedly, offering trading chances of which many people have taken advantage over the years.
U.S. gold pieces are offered in a range of grades including several uncirculated grades, unlike the pre-1933 European gold coins, which trade essentially in two grades, circulated and uncirculated. Grade refers to the state of preservation or quality of a coin. The higher the grade, the greater the spread between the intrinsicgold price and the buying price the lowest uncirculated grades are the best for people who are looking primarily for a gold investment. As you go up the grading scale, which begins at mint state 60, the lowest uncirculated grade and move incrementally toward the mint state 70, a perfect and virtually unattainable old coin, the price rises and the separation between gold value and numismatic value becomes more pronounced. If you buy gold coins in the mint state 62 or higher, it is essential to have them graded and authenticated by one of the nationally accepted grading services: the Numismatic Guaranty Corporation (NGC) or the Professional Coin grading Service (PCGS). Because the grading by these services is expandedly accepted around the country, you will increase your liquidity and the market for your coins when the time comes to sell. Independent grading is not crucial in buying the basic uncirculated coins (mint state 60 or 61) as long as you are buying them from a gold firm with reputation. In the late 1920s, right before to the stock market crash, most of the United States richest investors bought twenty dollar gold pieces and sent them to Europe for storage. An immense hoard had existed there ever since that time. As a result, most of the twenty dollar gold pieces bought by the investors of today are making their way from Europe back to the United States.
The question whether the supply of historic gold coins, both American and European, is likely to hold up is often asked. Some people say that the supply is diminishing, and it would be in your interest to accumulate as many as you possibly can. And as quickly as you can. But it is a matter of common sense, given the limited supply and the burgeoning demand commented previously in this part, that the supply will run out one of these days. The best course of action is to accumulate in a steady fashion until you have reached your portfolio goal, then wait and see what will occur. To own gold is important, but it is crucial to own the right kind of gold.
