In July 2002, among the many rare gold coins a$20 double eagle gold coin was sold for a record $7590, 020. On October 4, 2007, David Albanese, President of Albanese Gold Coins, stated that a $10, 1804 dated rare gold coin was sold to a private collector for $5 million.
Why are People Investing in Rare Gold Coins?
The demand of rare gold coins has shot up over the past few years. These reasons for the rising demand in the yellow metal are:
• Rise in the price of gold: According to Reuters, the price of gold rose by 17% in 2011 alone. With the continuous uptrend in gold prices over the years and predictions of further hikes, investors are turning towards the precious metal in the hope of preserving the value of their wealth.
• Demand and supply quotient: The supply of rare gold coins is fixed compared to the demand which is growing. As this gap widens, the value of rare gold coins is expected to rise also.
• Universal recognition: Rare gold coins are universally accepted and recognized as stores of value. Since 1970 to 2011, rare gold coins have outperformed the DJIA (Dow Jones Industrial Average) by about 7.5 to 1 and the gold bullion by 2.5 to 1.
• Privacy: Many individuals buy rare gold coins because the transactions in them can be confidential. Due to their status of being a collectible, the purchase and sale of these coins can be done without the coin broker or dealer being liable for the form 1099-B reporting to the IRS.
Which Rare Gold Coins to Opt For?
Although the value of a rare gold coin is determined by its type and date of origin, there are some rare gold coins that are more popular and sought after than others:
• St. Gaudens $20 gold coin: This is considered as one of the most beautiful examples of gold coins. They are a favourite among collectors who are willing to pay exorbitant prices for them. St. Gaudens $20 gold coins were the last gold pieces struck by the US mint for regular issue and are known for their non-reportability and privacy attributes. They were minted between 1907 and 1933 and are also known as Double Eagles.
• Liberty $20 gold coin: Due to their scarce supply and worldwide popularity, Liberty $20 rare gold coins are becoming a dream purchase for many. They are regarded, in many cases, for their performance over gold bullion.
• American Eagle gold bullion: As these are minted in small numbers, and although they are not rare coins by their nature, they are considered desirable by a number of passionate collectors. They come in a series of designs and demoninations. To increase their resistance to wear, they are minted with copper and silver which also increases their strength. They are available in both proof and bullion versions.
According to Coin News, it is ideal to invest from 5-10% of your savings in gold. While there are several ways of investing in gold, including gold mutual funds, ETFs, gold bars, etc., nothing quite stands apart on account of their historic significance as rare gold coins.