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The Value Of Pre-1933 Gold Coins

I hear it all the time: In the event of an economic collapse, that my semi-numismatic gold and silver coins will be worth no more than their gold content.

There is no doubt that bullion is money. I don’t argue that. I buy bullion coins myself. Johnson Matthey and Engelhard are some of my favorite products. But, is it smart for a precious metals investor to focus solely on buying bullion?

I don’t think so.

Pre-1933 gold coins are kind of like collecting art. But, whereas an art-piece in-and-of itself has no inherent, tangible value and costs perhaps $10,000, you can procure, for a small premium above a coin’s gold content, a piece of United States history.

The Morgan Dollar, which is one of my favorite silver coins, could cost you $50 in uncirculated condition. You then have the choice of having the coin graded. This means that NGC or PCGS will grade and put your coin in a nifty capsule, forever preserving it. Or you could put the Morgan in a tube, like your silver rounds, and forget about it as it is buried in your backyard.

The  Saint Gaudens’ gold coins (1907-1933) were minted by one of this nation’s pre-eminent artists and sculptors, Saint Gaudens, whose memorial is currently closed to the public amid the government shut down. Theodore Roosevelt had noticed that US coinage was not as pretty as some other coins minted throughout history by other governments. He thus moved to improve upon the eye-appeal of the country’s coinage.

If you shop around, you might today buy a MS-65 Saint Gaudens, which is one of the highest premium coins on the “semi”-numismatic side of the industry, for $2250. This amounts to about $1,000 over the gold content.  But, before you guffaw at the high cost over the gold content, remember that you’re buying a preserved and certified historical artifact.

This is a piece of art you could have in your house. It could also be a discussion point between you and business partners, etc., and you can use your knowledge of semi-numismatics to bring value into relationships, especially with fellow bullion buyers.

Learning this takes some patience. It also takes making a hobby of coin collecting. But, as you develop an appreciation and working knowledge of the market, you will recognize the arbitrage which exists while buying and selling  collector and certified coins.

Sure, if there is a full systemic collapse, then pre-1933 gold coins might not do you so good. But, I am pressed to say the same about bullion.

I wonder: if there is full systemic collapse, will there be a premium for preserving the history of the United States? Our nation’s gold coins are a piece of that history.

There are, to be certain, sober economic reasons for buying collector’s coins. In the past 15 years, Double Eagles have never traded for less than a $100 collector premium. From 1984-1987, premiums on the coins went from $400 to $700 over the coin’s gold content.

But, beyond strict numbers, owning a piece of US history in the form of these gold coins, especially amid such volatile times economically and politically, is something true students of history might wish for themselves. Especially if they know their coin is one of few in relatively pristine condition.

– Peter Kevorkian, UnitedCPM

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