The story and the history of gold is as rich and complex as the metal itself.
For years, savvy investors have recognized that gold is an important part of a diversified portfolio. In addition, physical gold is one of the few items of value you can hold in your hand. According to the history of gold, the first discovery of gold in America was in January 1848 by a carpenter in Sacramento, California. This was the beginning of what became known as the Gold Rush of 1849. In 1900, eleven years after the “Forty-Niners” had mined the California Gold Mines virtually empty, the United States officially accepted the gold standard, backing all of its money with gold.
In 1933, in an effort to boost commodity prices and create more employment for those suffering the effects of the Great Depression, private citizens were no longer allowed to own gold coins, bullion or certificates, and the U.S. Mint stopped producing gold coins. This is why numismatic gold coins are considered valuable. When it comes to collecting and investing in gold, the terminology surrounding it can seem vague or downright confusing. Here is a look at the three major areas that make up the gold portfolios of today.
The daily “spot” price of gold refers to the current value of one troy ounce of .999 fine gold bullion. This bullion is in the form of bars of gold, and it has no numismatic value whatsoever. Instead, the value is tied solely to its melt value. If gold goes up $10, or down $3, in one day, the value of the bar goes up or down respectively. These bars are usually traded in 100-bar lots, called “contracts.” In most cases, these contracts are bought and sold without physical delivery ever taking place. Some people call this “trading paper gold.” Future prices on gold contracts will be higher the farther out the expiration date of the contract is. The difference in the daily “spot” price and the future delivery price is based on the interest on the money put up by the person guaranteeing the contract.
The advantage of owning bullion gold is that it is the most liquid tangible asset in the world. Whether you’re in Tangiers, Tanganyika, or Tulsa, everyone knows the value of an ounce of gold. The disadvantage of owning bullion gold is that it won’t increase in value unless the price of gold goes up. Unlike numismatic gold, and to a lesser extent semi-numismatic gold, the value of your holdings is tied solely to the daily “spot” price. If you interested in buying gold coins or gold bullion, call us at 855-891-4653.
Unlike bullion gold, semi-numismatic gold involves actual coins of the realm, from both the United States and foreign countries. There are times when the price of semi- numismatic gold will rise on its own, not just according to the “spot” price, as demand outstrips the supply. This happens because the supply of semi- numismatic gold is a fixed quantity, and a large gold strike anywhere in the world won’t affect the supply. Why? Because, unlike gold bullion bars and gold bullion “coins”, they simply aren’t making them any more. The mintage figure for a circulated $20 Liberty gold piece of 1898 will be the same 500 years from now as it is today and was over 100 years ago. Yes, the supply will be much less due to attrition, but the mintage figure is a constant.
The term “semi-numismatic gold” usually refers to circulated United States gold coins struck prior to 1934 that carry a small premium over their melt value. These coins fall more into the “common” category rather than the “rare” category, with the understanding that “common” is used in a relative sense. Since there are no common $3 gold pieces, there are no semi-numismatic $3 gold pieces. In contrast, some $20 gold pieces are common, some rare, and some ultra-rare, so $20 gold pieces fall into each category, depending on the individual coin. Semi-numismatic coins do not offer the best of both worlds, but they offer a significant segment of both worlds, and make a viable alternative for certain portfolios.
QUALITY NUMISMATIC GOLD
This category covers the very finest United States gold coins minted before 1934. These are the third-party, certified coins of the highest quality that are hand- picked by the senior numismatists at GCC. These are the coins that are the nucleus (if not the entirety) of the finest GCC portfolios.
Quality numismatic gold is restricted to Mint State 63 and better US gold coins. This includes high quality $20 St. Gaudens gold coins issued from 1907 through 1933, choice hand-picked $20 Liberty gold coins minted from 1849 through 1907, attractive $10 Liberty gold pieces struck from 1838 through 1907, dazzling $10 Indian gold pieces issued from 1907 through 1933, and other beautiful and desirable United States gold rarities. These coins are the performers, the ones with the best track records, the issues with the greatest demand and the smallest supply.
Gold is a soft metal that is highly susceptible to scratches, bumps, dings, and other impairments. United States gold coins struck prior to 1934 were literally dumped into bags after being struck. They were shipped, stored, and handled numerous times without a single thought about their quality. After all, this was money at the time, and not a valuable collectible. Only a small quantity of these coins survived in top condition. Today, these coins are the prizes of the numismatic world, eagerly sought by collectors and others who seek only the finest.
Quality numismatic gold encompasses rarity, beauty, and desirability. It is highly collectible, eagerly sought, attractively priced, historically significant, and universally appealing. It is liquid, tangible, and portable. It provides, excitement, peace of mind and is financially sound. And, it’s GCC’s specialty!