Early Years of American Gold Coins
The more you know about any investment the better your chances of success. With numismatic gold coins there is no difference. Gold has been in the news more and more with today’s economic issues which makes it more important to get accurate information.
No matter your reason for buying gold coins, finding up to date information on the background and distribution of rare gold coins can support you in making the right decision. Rare gold coins are bought for different reasons depending on a buyer looking for a way to preserve wealth or another who collects numismatic gold coins for their beauty and rarity.
Gold has had a lure that has existed for thousands of years. There have been numerous gold rushes across the United States which you can see today as ghost towns. Platinum as a precious metal has been known to have more value per ounce though it is gold that has been used as a form of currency and as a sign of wealth.
Even today gold is on the forefront of many investors’ minds. As the current monetary policies have many people nervous about economic conditions ahead, many are choosing to place their wealth in gold.
The first American gold coin was minted in 1795 which was the $5 Half Eagle. Later that same year came the $10 Gold Eagle. The yellow precious metal that had been used for centuries was now minted as part of the United States federal coinage system.
When the United States was a young country there was not a lot of trust in the paper currency of the time, the Continental Currency notes. To offset the distrust of paper currency the government took special care to make sure that the minted gold coins had the same value as their melted down form.
One issue with the first runs of American gold coins was price differences in other parts of the world. When international prices spiked, gold brokers would melt down American gold coins and export the gold for profit.
In the early years of American gold coins, the $5 half eagle became the domination of choice. Many of the other minted values were produced in low quantities and had stretches of years where they were never produced. The $5 half eagle on the other hand continue to grow in popularity recording new records of gold coin production in 1810 with 100,287 coins.
With gold prices rising in the 1820s and 30s many of the gold coins minted were melted down for sale. To prevent this Congress passed new laws that made melted down gold worth less than gold in its minted coin state. This new legislation took effect in 1834 which changed the availability of gold coins.
The popular gold rushes in the United States did not come until later so the earliest forms of gold coins were minted from imported gold. It was in 1820 that gold was discovered in North Carolina and later Georgia that started the United States minting its own gold.
In the 1800s, almost every bank in existence printed their own money. Many banks with no financial banks flooded the market with thousands of useless bills. This put gold as a premium as many large commercial transactions would only be conducted in gold coins.
In 1848, gold was discovered in California and the gold rush was on. The new found stream of gold increased the supply which allowed gold to become more common. New gold coins were minted and the $20 Double Eagle and the $1 gold coin were introduced. The new $20 Double Eagle made it easier to transport larger sums of money as it took fewer coins to create the designated value.
The new demand for gold coins saw the Philadelphia Mint produce of 2 million $20 Double Eagle gold coins in 1851.
By 1880, the Federal currency had proven its value compared against gold coins and gold was no longer necessary as payment in large transactions.