Things to Know about Investing in Rare Gold Coins

Gold is a great investment

In times of economic recession, many people turn to gold as a way to diversify their financial holdings. In contrast to fiat money, precious metals such as gold are not nearly as affected by economic uncertainty. In reality, the market price for gold has historically risen during periods of economic turmoil. A prime example that illustrates this trend is gold’s increase in market value in the last decade. A historical gold price chart will reveal that gold has increased in value by 350% in the last ten years.

It may seem counterintuitive that gold rises in times of economic instability. A short explanation will clarify why gold retains its value and, in fact, typically increases in value while fiat money takes a turn for the worse. Fiat money, which is currency issued by a government, has no intrinsic value. It is directly affected by economic climate changes. Precious metals such as gold, however, do have intrinsic value that is not lost no matter what trends the economy is making. As gold becomes increasingly rare, as happens with time, its value steadily increases.

While straightforward gold bullion bars make an excellent investment, an increasing number of investors are realizing that rare gold coins can provide an even greater return in profit. In addition to their tremendous precious metal value, rare gold coins also have numismatic value. Essentially, this is a coin’s value in excess of its precious metal and face value. Such things as historic relevance, mintmarks, rarity, and physical condition can affect a coin’s market value. There are many nuanced characteristics that can influence a rare coin’s worth. For this reason, rare gold coins are widely studied by many numismatists around the world.

An extreme but interesting example of numismatic value in rare gold coins is the 1933 Double Eagle gold coin, which sold for $7,590,020 at a Sotheby’s auction. Keep in mind that this coin holds the record as the second most valuable single coin ever sold; however, it illustrates well that a coin’s individual characteristics can greatly augment its value. There were actually 445,000 1933 Double Eagle gold coins produced by the United States Mint, but the majority of these coins were subsequently melted down. Only a few are still in existence. There are also historical factors that figure into their value. Variant characteristics are present in all rare gold coins making them an excellent investment choice.