Posts Tagged ‘Saint Gaudens’
What are Numismatic Gold Coins?
First let’s define numismatic in two ways, the academic definition and the government’s definition. The academic definition is how Webster’s Dictionary defines it, and that is, of or relating to currency. Wikipedia defines it as the study or collection of currency, including coins, tokens, paper money, and related objects. So numismatic is the study of coins and paper money. It can also be applied to anything that is related to currency, like the study of bartering systems of the old days when people used items of value for trade, like cowry shells. Numismatists are experts in the area of coinage and paper currencies. This is typically important if you are a collector of coins. Numismatists can be very helpful in assembling large collections of gold coins.
What is important to the gold coin industry and gold investors alike is the government’s definition. The government’s definition is what has kept certain coins from being confiscated throughout history. This excerpt was taken from executive order 6102 which dealt with the confiscation of gold bullion in 1933: All persons are hereby required to deliver on or before May 1, 1933, to a Federal reserve bank or branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following: Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person, and gold coins having a recognized special value to collectors of rare or unusual coins. So to the government any coins that have rare or special value to collectors that are rare or unusual were exempt from confiscation. Therefore any gold coin that a person owned that had value that exceeded the actual value of the gold content, could be considered numismatic. This premium above the physical gold content is called the numismatic value.
This is the importance for investors in the gold market today. In order to be considered numismatic, the coins must be more valuable than the gold it contains. This can become a fine line though. No one really knows how much more valuable they have to be. So could gold Swiss Francs be considered numismatic because the come at a slightly higher premium than bullion? No one knows for sure. But it is widely accepted that Liberties, Saint Gaudens and Indian heads are considered numismatic coins and would be exempt from future confiscations. This is one reason why so many people like these types of coins, they are considered to be non-confiscateable.
If you are a collector then the academic definition is probably more important to you because you are a student of rare coins. If you are an investor the government definition is probably more important to you because you want your money to be as safe as possible.
What are the Best Gold Coins to Buy?
If you have been doing research you probably know by now that there are a couple of different ways you can acquire physical gold. Now you are trying to determine which type to buy. This decision should depend on what you are trying to accomplish with the gold. So what are your goals? This should be the question you ask yourself. Only then can you approach the gold market for an answer.
There are two types of gold that you can acquire which will do different things for your portfolio. Bullion gold is used purely for speculation and as a hedge against inflation. 1 ounce of gold 100 years ago could buy roughly as many loaves of bread as 1 ounce of gold today. Therefore over the long-term gold keeps up with inflation. With gold now in the second phase of the bull market you can also speculate purely on the price of gold hoping that it will enter that third and final phase and explode in value.
You can also acquire rare gold coins, which by many standards is considered the best way to own gold. Rare gold coins from the U.S. were minted between 1795 and 1933. They are non-reportable, so the transactions are private and confidential. They are also considered to be non-confiscateable. Bullion has been confiscated in the past while numismatic or rare gold coins have been excluded. History has also shown that rare coins have outperformed bullion significantly in the past. This can be best measured over the last 38 years on PCGS’s index for mint state rare gold coins.
In my opinion the best gold coins to buy are $20 Liberties and $20 Saint Gaudens minted between 1877 and 1933. These coins are highly liquid and affordable to most portfolios and can add great privacy and protection for your assets. Liberties and Saints are easy to track and have a market in which coins are traded every day. These coins can be bought in very common dates like 1904 and 1924, or they can be bought in very rare dates like 1861 and 1933. Acquiring these coins in my opinion should be done between the grades of mint state 62 and mint state 66 as these are the most sought after, thus increasing the demand.