This is a frequently asked question and rightfully so, the classification of Numismatics are coins that are rare or unusual, or have a special value to collectors. The classification alone means collector coins, however this classification lends benefits to this part of the precious metals asset class that pure gold bullion does not. So why then is the answer to the question no?
Most of our customers at ITM Trading are not coin collectors. They are mostly everyday people like you and I that are looking for a safe and secure way to protect their assets, and as a result choose the numismatic category to meet that goal. However on a few rare occasions we do get a few coin collectors/numismatists that call us requesting specific gold coins to add to their collection.
US gold coins minted prior to 1933 (the year of the great gold confiscation) are widely considered to be numismatics. They are rarer than modern issue gold coins and thus carry a premium above bullion gold coins. This premium can range depending on how rare, how high the quality and any historical significance which can make a particular coin more sought after. This brings us to the benefits of the classification of numismatic.
There are three main benefits associated with pre-1933 gold coins: privacy, historic protection from confiscation and potential growth. Each benefit is enjoyed by all who own them; however one individual may choose these coins based upon one particular benefit, which is why it is important to know what your goals and objectives are for acquiring gold.
Because of their status as a collectible, at this time, these coins are non-reportable on the buy and sell. Only the buyer and seller are aware of the transaction, and no government forms are required to be filled out at any dollar amount per transaction. With instantaneous transmission throughout the worldwide web our customers are happy to know that there still exists a private asset class.
Historic Confiscation Protection
There has been a few times in US history when gold coins have been confiscated by the government. The most recent occurred in the year 1933 when President Roosevelt called in all gold bullion coins and made it illegal to own bullion until it was retracted in 1974. In this confiscation order it stated that “gold coins having a recognized special value to collectors of rare or unusual coins” where exempt from confiscation. For this reason many people believe that if a gold standard were to be reinstated, and gold bullion was again confiscated, that numismatics would again be excluded.
A favorite benefit amongst many of our customers is the long-term growth that these coins have been known to achieve. According to figures at PCGS.com, mint state rare gold coins have outperformed gold bullion close to 3 to 1 over the last 40 years.
At different times within a trend cycle, certain areas can lead while others can lag. In the past there have been times when bullion has outperformed numismatics (recently with the run up in the spot price is one example), as well as times the numismatics have outperformed bullion (in 2008 when spot gold dropped from over $1,000 oz to below $700 and the numismatics made new highs for this trend) but over the long-term numismatics have tended to outperform any other form of gold.
As you can see being a collector is not a necessity. At ITM Trading we help people navigate the numismatic coin market by assisting them in building a portfolio of coins that support their goals and objectives, whatever they may be even if it is for numismatics.