First let’s define numismatic in two ways, the academic definition and the government’s definition.  The academic definition is how Webster’s Dictionary defines it, and that is, of or relating to currency.  Wikipedia defines it as the study or collection of currency, including coins, tokens, paper money, and related objects.  So numismatic is the study of coins and paper money.  It can also be applied to anything that is related to currency, like the study of bartering systems of the old days when people used items of value for trade, like cowry shells.  Numismatists are experts in the area of coinage and paper currencies.  This is typically important if you are a collector of coins.  Numismatists can be very helpful when setting out to buy gold coins.

What is important to the gold coin industry and gold investors alike is the government’s definition.  The government’s definition is what has kept certain coins from being confiscated throughout history.  This excerpt was taken from executive order 6102 which dealt with the confiscation of gold bullion in 1933: All persons are hereby required to deliver on or before May 1, 1933, to a Federal reserve bank or branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following: Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person, and gold coins having a recognized special value to collectors of rare or unusual coins.  So to the government any coins that have rare or special value to collectors that are rare or unusual were exempt from confiscation.  Therefore any gold coin that a person owned that had value that exceeded the actual value of the gold content, could be considered numismatic.  This premium above the physical gold content is called the numismatic value.

This is the importance for investors in the gold market today.  In order to be considered numismatic, the coins must be more valuable than the gold it contains.  This can become a fine line though.  No one really knows how much more valuable they have to be.  So could gold Swiss Francs be considered numismatic because the come at a slightly higher premium than bullion?  No one knows for sure.  But it is widely accepted that Liberties, Saint Gaudens and Indian heads are considered numismatic coins and would be exempt from future confiscations.  This is one reason why so many people like these types of coins, they are considered to be non-confiscateable.

If you are a collector then the academic definition is probably more important to you because you are a student of rare coins.  If you are an investor the government definition is probably more important to you because you want your money to be as safe as possible.