Gold has been in a positive trend since 1999. We have seen gold come from $252 per ounce in 1999 to as high as $1,225 per ounce at the end of 2009. Over that 10 year period is a 386% gain. Over an even longer period of time we have seen gold come from $35 per ounce in 1970 to that same $1,225 mark in 2009. That is a 3,400% increase! But what have rare gold coins done over that same time frame?
According to PCGS, Mint State Rare Gold Coins have performed even better that gold bullion since 1970. On their site, a $1,000 acquisition of mint state rare gold coins in 1970 would be worth $114,489 today. That is an 11,348% increase! That means that rare gold coins have outperformed gold bullion close to 4 to 1 over the past 40 years.
There are a few factors as to why this has occurred. Gold bullion only has the value of the gold content itself. If you own a 1 ounce gold bullion coin, like an American Eagle, then it is worth 1 ounce of gold. Rare gold coins also posses the intrinsic value of gold. A $20 Liberty minted between 1849 and 1907 contains one ounce of gold, so therefore it will never be worth less than the gold content itself. However, rare gold coins also have value do to their quality and rarity. However, the main factor that contributes to their value is supply and demand forces. No one can mint coins prior to 1933, therefore supply is limited. As demand heats up, supply becomes tighter and the value goes up. Gold bullion is being mined everyday, therefore supplies are constantly increasing.
Quality and rarity of any particular coin play a large role in its specific value. The higher the quality the more valuable it will be. The same goes for rarity, the more scarce a coin is the more valuable it will be. Rarity is easily determined. PCGS keeps a population count for every coin ever minted in the U.S. in every grade. PCGS has also made grading simple. PCGS and NGC grade coins on a scale from 1-70, 70 being perfect condition. Where you find the performance is in the mint state category, which runs from 60 to 70.
You can see that if you have a high grade mixed in addition to a very rare coin the value would be very high compared to a coin that is of a lower grade and rarity. In fact one coin, the 1933 $20 Saint Gaudens, which was at the time considered to be the only one in existence, sold at auction for $7.5 million. Values range from a few thousand dollars per coin up to that amazing $7.5 million value. Buy rare gold coins.