On April 5, 1933, President Roosevelt issued Executive Order 6102“recalling” all gold coin, gold bullion and gold certificates and made it a crime to trade or hoard such.
However!The order exempted “gold coins having recognized special value to collectors of rare and unusual coin”
It is with this fact that a key advantage is present with pre-1933 U.S. coins.
The precedence is set–collector coins are exempt if future government intervention occurs!
Collector coins have always been exempt to reporting requirements unlike ETF transactions–Bars, Krugerrands, and Mapleleafs.
Pre-1933 U.S. coins are well recognized throughout the world. The St. Gaudens (1907-1933) has been known as the world’s most beautiful coin. As such, thousands of traders make a very tight buy sell spread. Millions of collectors around the world are interested in U.S. gold coins. Several trading networks CCE (Certified Coin Exchange), Coinnet, and Coinplex are like NASDAQ trading platforms for all U.S. coins, enabling a very active market with spreads as low as 3% per coin.
4. Low Premium
Historically speaking many opportunities are available today for Pre-1933 U.S. gold coins. U.S. coins up to 100+ years old can be had for premiums as low as 6% over the gold value. Premiums on U.S. $20 gold coins in average grade have been historically in the 25-100% range and at today’s level they are a bargain. As collector demand increases, premiums could move significantly higher even without gold appreciating. In down gold markets, collectors tend to hold and therefore U.S. gold coins hold more of their value, while in up markets their scarcity tends to have them appreciate quicker.
5. Artistic and Historical Significance
U.S. coins tell the history of the United States, the most powerful country in the world. They were designed by some of the world’s top artists: Augustus Saint-Gaudens (1848-1907) was one of the greatest sculptures of the 20th century. His designs adorn two major series – the $20 Gold Standing Liberty and the $10 Indian. The wealthy always seek historically significant artifacts. Throughout history, many of the rich and famous have collected and hoarded U.S. gold coins.
Even the most common of U.S. coins are very scarce by comparison to such items as Krugerrands or British Sovereigns since many U.S. coins were melted or destroyed. Additionally many years and mint marks are extremely rare. For example, the 1927 Denver $20 Gold has fewer than 20 known. Along with rarity, demand always plays a huge role and U.S. coins are the most collected coins in the world therefore always generating huge demand.
7. Compact, Portable Wealth
U.S. coins are one of the best means to hold substantial value in a small transportable package. In the case of rare gold coins, tens of millions can be held in a small safety deposit box (or briefcase) and easily transported. Most countries have exemptions for transporting collector coins.
8. Easily Identified and Authenticated
Numerous experts are available to unconditionally identify and certify U.S. gold coins. They are next to impossible to counterfeit. Two major grading and authentication companies can also certify and seal the coins for international recognition and trading on various exchanges. Many works of art can be easily faked and only small panels of experts (often fickle) must be used. Not so with even the rarest of coins.
9. Intergenerational Transfer of Wealth
Transferring title of coins is as simple as handing it to the next party – no elaborate documentation is required. The fungibility of many coins enables the gradual disbursement to family members if desired. Storage and insurance is very easy and reasonable.
10. Returns on Investment
Rare coins have outperformed both the Dow and S&P over time! In times of inflation or turmoil they have done remarkably well. Even in recession and depression times they tend to hold their value far better than most paper assets.