U.S. Gold Coins Out Perform Gold Bullion by As Much As 3-1

01 Jan

U.S. Gold coinsWholesale rare coin prices show collectors that purchased numismatic gold coins have received a return far in excess of their bullion content, but rarity is the key for investors. Over the past 5 years purchasers of gold bullion have seen the price of the yellow metal more than double from $320 to $630 per Troy Ounce (31.1 grams), peaking as high as $740.

Over the same period a mint state $10 Indian Head gold coin (1907-1933), containing half the weight in gold (15 Grams) has rocketed from $650 to $3,000. More remarkable is a smaller denomination in the same series. The $5 Indian Head, has only 7 grams gold, but in only 2 years the wholesale price has moved from $1300, to an astounding $4,000.

Stuart Allen managing director of Signature Rarities Ltd, (www.signaturerarities.co.uk) one of only a handful of European dealers specializing in certified pre 1933 US gold and silver remarked:

“As good as the rises in the price of gold, informed collectors have long known the benefits of possessing coins. The key is rarity, not the metal”

Allen classifies a rare coin as one with less than 100 known to exist. As an asset, he recommends collectors concentrate on certified coins. These are examples that have been independently authenticated and assigned a universally accepted grade. Measured on the Sheldon scale between 1 (worn smooth) and 70 (flawless) only coins attaining a grade of 60 or more are classified as Mint State (MS).

Allen continues: “Coin collecting is more than stashing some old pocket change in a tin for the grandchildren. I consider purchasers as temporary custodians of a relic that is a direct link to the past. Nobody knows what that future may hold for prices, but one thing is in no doubt; as long as money exists it will be desired and collected.”

A recent study conducted by Dr Robert Brown, Chief investment officer at GE Capital, and published on the Journal of Financial Planners web site (www.fpa.org) found rare coins to be more than 40% below there 62 year trend line. Furthermore the report calculated rare coin collectors received a mean return of 10.46 per annum, compared to a compound return of 7.44% from the S & P 500 stock market index.

With record amounts of money in circulation, and more being printed everyday, Allen predicts collectors will continue their quest for quality coins. “The U.S dollar is near record lows of almost 2-1, against the British pound. Collectors this side of the pond have an amazing advantage in purchasing power”.

Norman Martin, CEO of Superior Rare Coinage, Inc (www.866coinman.com) located in Freehold New Jersey concurs: “competition is fierce, European buyers have ambitious strategies, and a lot of material we send over there will be gone for generations, some may never find its way home”.

2007 looks ready to kick off with a new record price paid for a coin. On January 2nd the auction of the finest of 5 known 1913 Liberty Head design 5 cent “Nickel” takes place in Orlando, Florida. In 1996 another example of the 1913 nickel became the first coin to breach the million dollar barrier.

Pre auction estimates suggest the final hammer price could reach $5 Million, and could even break the record for highest price ever paid for a coin. Could this “monster” be destined to find a new home this side of the Atlantic? Allen laughs then replies: “that’s only £2.5 million sterling, just on the exchange rate it’s a worthwhile play”.

For more information on choosing, locating and structuring a coin collection please call Signature Rarities, Ltd on 44 12 6872 5001

About Signature Rarities Ltd:

Registered office: 30 Milton Road, West Cliff on Sea, Essex SS0 7JX. Incorporated 2003 under the laws of England and Wales. Reg. # 511 3465. Signature Rarities is family owned and managed business specializing in pre 1933 US Gold and Silver. Stuart Allen is a full time dealer with almost 20 years numismatic experience. Visit www.signaturerarities.co.uk or contact Stuart Allen on 44 12 6872 5001 or email e-mail protected from spam bots

Contact Person: Stuart Allen

Company Name: Signature Rarities, Ltd.

Phone: +44 12 6872 5001

Mobile: +44 774 208 4634

Fax: +44 12 6872 5002

Photo credit: national museum of american history via Visual hunt / CC BY-NC-ND


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