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What Are The Best Gold Coins To Buy?

Blog Apr 7, 2014
A 1 oz. Gold Bullion Bar Produced By Credit Suisse

A 1 oz. Gold Bullion Bar Produced By Credit Suisse

So, you have been watching the gold market for sometime now, and you decided that you should own gold. Through your initial research, you have discovered that when the television ticker says that gold closed at $1297.50 per ounce today, that doesn’t mean you can buy gold bars online for that price. A few quick searches reveal that there are processing and minting costs, as well as profit and shipping costs that will probably add five percent or so to the reported price of gold if you want physical gold products shipped to you. A local coin shop has gold coins and gold bullion products available as well, but your visit confirmed that the closing price of gold announced on TV is not the same as the asking price for an ounce of gold bullion in the coin shop. The helpful man behind the counter also explained the difference between gold bullion and gold coins, and rare gold coins to you, and you found the differences to be interesting, and gave you even more to consider before you begin to buy gold.

The Differences Between Gold Coins, Gold Bullion, And Rare Gold Coins

While you were at the coin shop, you noticed that there were several different types of gold products available, and there were sometimes nominal price differences, and sometimes there were quite marked differences in the price per ounce of gold products. For instance, there were small one ounce gold bars that were individually packaged in plastic packaging that were relatively plain in design, and their price was the closest to the spot price reported on television. The man behind the counter explained that these were gold bullion bars, they were produced by a private company and were marked only with the name of that company, the purity of the gold in the bar (.999) and the weight of the bar (1 Troy ounce). He went on to explain that when a private company created a gold bar, it is called “bullion”. If the private company produces a coin shaped gold product, it is technically called a “round”, as the term “coin” can only be applied to a product that is produced by a government mint of a country. These coins may or may not have the weight or purity of the gold contained in the coin marked upon them, but they will have the country of origin and most likely a currency value marked into the coin. You notice that the Gold American Eagle coin he showed you was much more ornate than the gold bullion bars on display. Though there were several dollars in price difference between the gold bullion bar and the Gold American Eagle he showed you, you considered paying the difference for the Gold American Eagle simply because it had more eye appeal to you, and you liked the idea of being able to actually hold it and feel it, which was not possible with the gold bullion bar in it’s thin plastic case.

An Old Gold 20 Swiss Franc Coin

An Old Gold 20 Swiss Franc Coin

Know that you have learned the difference between gold bullion and gold coins, and you really liked the Gold American Eagle, even though it cost a bit more than the somewhat plain gold bullion bar. Your consideration of the Gold American Eagle also grew when the helpful man behind the counter said that if you were to bring in a Gold American Eagle and a gold bullion bar to sell to him, he would pay more for the Gold American Eagle, so you realized that you would recoup some of the costs involved in choosing a more expensive coin over the plain gold bullion bar. He also said that there were advantages to owning a Gold American Eagle over gold bullion products, but that he really wasn’t supposed to talk about them, and he suggested talking to your tax adviser about the differences between gold bullion, gold coins, old gold coins, and rare gold coins.

Rare Gold Coins And Old Gold Coins

What he had to say about one type of gold being more advantageous than another intrigued you, and you asked him to show you an old gold coin and a rare gold coin. He smiled and directed you to another glass showcase further back in the coin shop. There he pulled out a little case full of gold Swiss francs, and a one ounce Double Eagle coin which was sealed in a Lucite rectangle. He explained that the gold Swiss francs were fractional gold coins, that is they weighed less than one ounce. They were also the currency of another country, Switzerland, so technically they were less susceptible to interference by American laws and rules. You noticed that these Swiss francs were all marked with years from the early 1900’s. By doing some quick math you concluded that they were somewhat more costly than their weight in gold, and you asked him about this. He confirmed your thoughts. “These coins trade at a higher cost than just their gold content” he said, “You are paying extra for their age, the fact that they are from a financially neutral country – Switzerland, and a little for the fact that these are in Extremely Fine condition. If you bring me coins like this to sell, I will pay you a premium over the spot price of gold for them, so they cost a bit more now but you will get more later.” What you have already learned about gold bullion and gold coins in fifteen minutes was exciting, but also a bit confusing, when you walked into the coin shop, you thought it was all about getting the best deal, but now you see that the gold bullion and gold coin market is a bit more complex. “What about that coin in the clear plastic rectangle?” you ask.

Shop Our Selection of Rare Gold Coins Online

A 1909/8 $20 Saint-Gaudens Gold Piece

A 1909/8 $20 Saint-Gaudens Gold Piece

So you ask about the gold Double Eagle coin in the plastic case. “This is a rare gold coin,” explained the helpful and knowledgeable man behind the counter, “and this is my favorite coin in the shop right now. This is a one ounce gold coin called a Double Eagle. It was minted in 1908, but he U.S. Mint did not release them in 1908. Instead, they held onto a bunch of these coins until they were needed for circulation, and that turned out to be the next year, 1909. But because they were not released in 1908, the mint had to go back and re-strike each one of these gold coins to reflect they year they released it. For this reason, if you look closely through this little magnifying glass, you can see that the second ‘9’ in 1909 is struck over the ‘8’ that was originally struck on the coin. This particular coin never saw circulation between common citizens, it was most likely held in bank vaults or by a collector until someone sent it to PCGS to be graded and encapsulated in this Lucite case. See this label inside the clear Lucite case? It tells me that this is a genuine $20 Double Eagle, produced in 1908 but overstruck with a ‘9’ before it was released by the mint. This coin is also graded Mint State 63, which means it is in uncirculated condition.”

He Hands You The Double Eagle Gold Coin
You take the coin, and the little magnifying glass on a leash that he hands you. It takes a few moments, but you are able to focus on the date on the front of the Double Eagle, and you can see what he is telling you about. You can also see that the coin seems to be in pretty good shape for a coin over 100 years old. You also really like the design on the coin, and you ask about it. “The design on the coin was created by Augustus Saint-Gaudens,” he says, “President Teddy Roosevelt knew Saint-Gaudens, who was a sculptor, and personally asked him to create new designs for America’s gold coins, and this design has been called the most beautiful design ever struck on U.S. gold. The case that it is in is made of Lucite, and it will protect the coin and keep it in it’s Mint State condition, and preserve it’s appearance and value.”

How Much Is It?
As you hand the encased rare gold coin back to him, reminding yourself to remember the name Augustus Saint-Gaudens and the term “Double Eagle” you blurt out, “How much is it?” before you can catch yourself. To find out how much the 1909/8 MS 63 Double Eagle is, and read the last part of “What Are The Best Gold Coins To Buy?”

 

A 1909 / 8 $20 Saint-Gaudens Double Eagle Gold Piece

A 1909 / 8 $20 Saint-Gaudens Double Eagle Gold Piece

You are feelling a little embarrassed about asking the price of a Mint State 63 1909/8 Saint-Gaudens Double Eagle. You weren’t quite sure why you felt a twinge of embarrassment, but you did. When the nice man behind the counter answered your question, a bit of your embarrassment returned, but as he continued to speak, your embarrassment turned into amazement. “Today I am selling this coin for $5500” he says. You stop and think for a minute that $5500 is more than four times the spot price of gold. You could probably get four American Gold Eagles for that price, certainly you could purchase four of the plain gold bullion bars, but as he continues to speak your interest is caught. “I know this coin,” he says, “I have had this store for 25 years, and I sold this coin to one of my favorite clients about 22 years ago.” He places the coin into the showcase, and then locks the case before resuming the conversation. “He bought this coin from me 22 years ago, and I think he paid me $650 for it.” says the man behind the counter. “Back then,” he continues,”He could have bought two of the one ounce gold bullion bars, or a couple of the one ounce American gold coins, but he had a plan.”

The Rare Gold Coin Was The Best Gold Coin To Buy

The look on your face tells the well spoken man behind the counter to continue on with his recollection of the first time he sold the rare gold coin you were just holding. “The fellow came in rather excited. I had sold him a few coins before, but I could tell that today was different for him and I was right. He told me had just become a father for the first time, and that he wanted to buy something special to sock away for his new daughter. I had only had this coin a few days, and I thought it might be a little too expensive for someone who just had a baby and all the bills that go with a newborn, but after I told him a little about the coin, he began counting out twenties and fifties.” Again, speaking a little bit faster than you thought, you ask, “Why did he sell it back?”

Shop Our Selection of Rare Gold Coins Online

Rare Gold Coins Are Collectibles
“He didn’t”, says the shopkeeper. “He passed on a few years back. His daughter sold it to me. He had given it too her when she was eleven or twelve I think. They used to come in every couple of weeks and buy a silver dollar, or maybe some silver dimes or a graded quarter, sometimes a small gold coin, they enjoyed collecting coins together.” The look on your face once again told the shopkeeper to continue on. “They were close. He was a really nice guy, a car mechanic by trade. His daughter was smart as a whip, and she wanted to be a veterinarian, she loves animals. After her dad died, expenses got kinda tight. She stopped coming in to buy little coins. She was really determined to finish her degree. She brought me this coin last week. She sold it to pay for the last semester of vet school. She told me that one day when she opens her own practice and starts doing well, she is going to buy another one just like it, but that today she needed to sell it. I think that if he had it to do all over again, he would have bought the same coin. Collectibles can be passed from one generation to another quite easily, unlike some inheritances, and no way $650 can buy a semester of veterinary school these days.” You nod your head, and thank the man for his time and expertise, and head home to ponder, what are the best gold coins to buy?

Still have questions about owning gold? Call us at (888-696-4653) or Click Here To Get a free gold guide home delivered.

Thumbnail Photo We believe that everyone deserves a properly developed strategy for financial safety.

Lynette Zang

Chief Market Analyst, ITM Trading

Sources & References In This Article

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