By Anthony Ricigliano: Collecting and investing in gold coins, also known as numismatics, got its start in the late 16th and early 17th century when British royalty and nobles began assembling catalogues of precious coins, predominantly from the Roman Empire. The collectors of the time were driven by the quality and rarity of the coins, as well as their history.
Like the Roman pieces which went into collections over 400 years ago, gold coins minted in the U.S. prior to 1933 offer the same characteristics of quality, rarity, and history. The craftsmanship of these coins, which were first minted in the United States in the late 1700’s, lends to level of quality that ranks them as some of the most beautiful coins in world.
There is also quite a bit of the nation’s history depicted in these coins. Both designs of the 1907-1933 Eagle and the 1908-1929 Half-Eagle coins present profiles of tribal chieftains in full headdress and regalia while the series of Carson City gold coins owes its existence to the Gold Rush in California which started in 1849.
The rarity of the coins is the result of two factors; the first being that gold coin production levels dropped to extremely low levels at times, particularly in the late 1800’s. For instance, many $20.00 gold coins issued in the 1880’s had mintages which ranged in quantities from the high hundreds to a few thousand pieces. The second factor relates to President Franklin Roosevelt’s demand during the Great Depression that all U.S. citizens surrender their gold to the Treasury. The surrendered gold coins were then melted down and turned into gold bars.
One of the most popular gold coins for collectors and investors is the $20 St. Gaudens Double Eagle. The Double Eagle coin, minted from 1907-1933 is considered to be one of the most beautiful coins ever minted. The beauty of the coin is further emphasized by its large shape and heft. Investment value aside, many collectors and investors enjoy collecting this coin just for its beauty and uniqueness. The design includes images of Lady Liberty, the Capitol building, and 46 stars which represented the number of states in the Union in 1907. Of historical significance and irony is that the coin was commissioned by President Theodore Roosevelt and then called in for melting by his cousin, FDR, twenty six years later.
The history, beauty, and rarity these pre-1933 gold coins combine to make them an excellent investment for portfolio diversity and as a hedge against inflation. The coins carry additional value due to the fact that they trade at a small percentage above their bullion value. This small premium contrasts favorably against silver numismatics, which often trade at double their bullion value.