United States gold coin production has produced several instances of two different designs being produced simultaneously, or within the same year. These are scaled transitional coins and they make for a very interesting collecting focus for the gold coin buyer.
The one dollar gold dollar denomination, the most obvious transitional issue occurred in 1854 when both the Type 1 and the Type 2 gold coin issues were produced. Both of these are relatively common although the Type 2 becomes scarce in the higher grades and rare in MS64 or better. In 1856 two designs were produced: the Type 2 and the Type 3. Since the Type 2 was only made in San Francisco during this year and there are no 1856-S Type 3 gold dollars this isn’t a transitional issue in the sense of the 1854.
There are many other transitional issues, such as the quarter eagle denomination. In 1796 2 coins were minted, one with No Stars and With Stars in the designs. Both of these are rare in all grades and because of price constraints they could be considered one more difficult coins to acquire in a transitional set. The next transitional issue occurred in 1834 when both the Capped Bust and the Classic Head quarter eagles were struck at the Philadelphia mint. The former is an extremely rare coin in all grades while the latter is common in grades up to and including MS63.
The largest group of transitional issues exist in the early half eagles. The reason for these transitional issues tends to be different than, for the 1854 Type 1 and Type 2 dollar when the design was changed to facilitate improved striking.
The twenty dollar U.S. gold coin contains more interesting transitional coins for the specialist. The first of these is the 1866-S No Motto and With Motto. The former is a very scarce coin in all grades and it remains unknown in Uncirculated. The latter is fairly common in circulated grades and scarce in Uncirculated with nearly all of the two to three dozen known in Uncirculated grading MS60 to MS61.
The termination of the Liberty Head design in 1907 meant that an interesting group of transitional coins from this year are available. The 1907 Liberty Head issues were produced at the Philadelphia, Denver and San Francisco mints and all three are common in grades up to MS63. The 1907-S is very rare.
Augustus St. Gaudens’ redesign of the double eagle was introduced in 1907. Most transitional collections would include a High Relief from this year as well as a 1907 No Motto. Both of these coins are readily available in Uncirculated grades and the No Motto is abundant even in MS65 to MS66.
Tuesday, June 1, 2010
Friday, May 28, 2010
Liberty Head Double Eagle: Very Fine
During 1848-52, the chance discovery of large goldmines in California led the American Government mandate the issue of its first $20 gold coins. Earlier, the highest denomination was $10 and the coins were named ‘Eagle.’ Drawing upon the logic, the $20 coins came to be known as ‘Double Eagle.’ Engraver James B. Longacre conceptualized the pioneering design for the Double Eagles ‘Liberty Head.' The Liberty Heads were released from 1849 to 1907. In the year 1849, only two proofs were molded and its mass production officially began in 1850.
The obverse design of the coins features the head of Lady Liberty, aligned sideways. Along the circumference, thirteen stars are present that seem to surround her head. The year is engraved in an arch alignment right below her head. The reverse is a more complex design portraying the bald eagle in the center with its wings spread. One of its claws holds some arrows and the other holds an olive branch. An ornate shield appears to cover most of the frontal portion of the eagle. Encircled by thirteen stars, the ‘motto’ appears (1866-1907) above its head.
From the collectors’ point of view, there are three main categories of the coin. Unlike the later two variants, the Type I (1850 through 1866) Liberty Heads did not carry the motto ‘In God We Trust.’ The Type II (1866 through 1876) had the words engraved and the denomination was mentioned as ‘Twenty D.’ The Type III (1877 through 1907) carried the motto and was primarily different from the previous two issues in that the denomination was expressed as ‘Twenty Dollars.’ Additionally, it had some design modification, like the repositioned head of Liberty and her acutely diagonal neckline.
Type III Liberty Heads were minted in the largest numbers, partially owning to its 21-year stint. Most of them went into the national treasuries of the investing countries, rather than going into mass circulation. This exported variety is a highly valued one, as is the Type 1A (1861), designed by Anthony C. Paquet. However, all the three series are available in various grades, including VF (Very Fine), from VF-20 to VF-35. These coins contain light to moderate wear & tear. The buyers should avoid the coins ‘cleaned’ for enhancing the eye appeal.
For valuation purpose, the obverse is more significant than the reverse. One must closely examine the areas behind the ears, along the cheeks, hair, and forehead on the frontal side. On the reverse, the possible spots of aberration are the eagle’s neck, the contours of its wings, and the breast feathers, apart from the upper edge of the shield. Fingerprints, handling marks, hairline cracks, and minting defects reduce the worth of the coins. Traditionally, the VF grades have traded at spot price as well as premium. Presently, they usually trade at the spot rate, adding to its appeal.
The obverse design of the coins features the head of Lady Liberty, aligned sideways. Along the circumference, thirteen stars are present that seem to surround her head. The year is engraved in an arch alignment right below her head. The reverse is a more complex design portraying the bald eagle in the center with its wings spread. One of its claws holds some arrows and the other holds an olive branch. An ornate shield appears to cover most of the frontal portion of the eagle. Encircled by thirteen stars, the ‘motto’ appears (1866-1907) above its head.
From the collectors’ point of view, there are three main categories of the coin. Unlike the later two variants, the Type I (1850 through 1866) Liberty Heads did not carry the motto ‘In God We Trust.’ The Type II (1866 through 1876) had the words engraved and the denomination was mentioned as ‘Twenty D.’ The Type III (1877 through 1907) carried the motto and was primarily different from the previous two issues in that the denomination was expressed as ‘Twenty Dollars.’ Additionally, it had some design modification, like the repositioned head of Liberty and her acutely diagonal neckline.
Type III Liberty Heads were minted in the largest numbers, partially owning to its 21-year stint. Most of them went into the national treasuries of the investing countries, rather than going into mass circulation. This exported variety is a highly valued one, as is the Type 1A (1861), designed by Anthony C. Paquet. However, all the three series are available in various grades, including VF (Very Fine), from VF-20 to VF-35. These coins contain light to moderate wear & tear. The buyers should avoid the coins ‘cleaned’ for enhancing the eye appeal.
For valuation purpose, the obverse is more significant than the reverse. One must closely examine the areas behind the ears, along the cheeks, hair, and forehead on the frontal side. On the reverse, the possible spots of aberration are the eagle’s neck, the contours of its wings, and the breast feathers, apart from the upper edge of the shield. Fingerprints, handling marks, hairline cracks, and minting defects reduce the worth of the coins. Traditionally, the VF grades have traded at spot price as well as premium. Presently, they usually trade at the spot rate, adding to its appeal.
Thursday, May 27, 2010
Rare Date Gold Coins
With the official opening of the first Mint in the US, in 1795, the Government began issuing gold coins for common circulation. Until President Roosevelt’s gold confiscation order of 1933, the new gold coins were produced and used in commerce. The U.S. gold coinage kept evolving and several different series were introduced during 1795-1933. Some of these came to be treated as rare for various reasons and became more significant for the numismatic purposes. As a rule, the rare date coins command higher valuation than their other counterparts do. But for the experts’ advice, it is not possible for a common investor to assess the rarity and the resulting valuation of the mintage. The key professional grading organizations are Numismatic Guaranty Corporation (NGC), Professional Coin Grading Service (PCGS), American Numismatic Association Certification Service (ANACS), and Independent Coin Graders (ICG).
The slack supply of the rare coins can be attributed to smaller production and destruction in the due course. Destruction, in turn, was the result of accidental damage, wearing due to circulation, export, or melting by the Government. The turbulent economic times like these have always provided impetus to gold as an effective hedging instrument. The same effect is translated into the rare coins market, but in a magnified form. Over the past decade, these pieces have offered much better returns than the other forms of investments, including gold bullion. The supply of such pieces has remained static since 1933, and any surge in demand puts an upward pressure on their prices.
After World War II, as an indirect implication of the Marshall Law, the European nations converted their US Dollar holdings into old gold coins. Therefore, presently, these countries hold their large reserves. As the nations, worldwide, continue to hold on to gold as an insurance against volatile currencies, the old coins are not likely to enter the markets in large numbers. Most of the Eagles and Double Eagles minted from 1929-1933, are considered rare as the mintage rate was very low in these years. Almost all of the St. Gaudens Double Eagles molded in 1933 were melted down and only eleven pieces (hoarded or stolen) have been recovered, making it among the rarest dates. The proof coins and business strikes for the ultra high relief St. Gaudens $20 of 1907 are treated as extremely rare as this variant was discontinued. Another example is Liberty Head Double Eagle Type IA (designed by Anthony C. Paquet), released only in the year 1861. The proofs for the Three-dollar piece dated prior to 1859 are extremely difficult to find. Similarly, various dates for different denominations and the year of coins are regarded rare for different reasons.
The slack supply of the rare coins can be attributed to smaller production and destruction in the due course. Destruction, in turn, was the result of accidental damage, wearing due to circulation, export, or melting by the Government. The turbulent economic times like these have always provided impetus to gold as an effective hedging instrument. The same effect is translated into the rare coins market, but in a magnified form. Over the past decade, these pieces have offered much better returns than the other forms of investments, including gold bullion. The supply of such pieces has remained static since 1933, and any surge in demand puts an upward pressure on their prices.
After World War II, as an indirect implication of the Marshall Law, the European nations converted their US Dollar holdings into old gold coins. Therefore, presently, these countries hold their large reserves. As the nations, worldwide, continue to hold on to gold as an insurance against volatile currencies, the old coins are not likely to enter the markets in large numbers. Most of the Eagles and Double Eagles minted from 1929-1933, are considered rare as the mintage rate was very low in these years. Almost all of the St. Gaudens Double Eagles molded in 1933 were melted down and only eleven pieces (hoarded or stolen) have been recovered, making it among the rarest dates. The proof coins and business strikes for the ultra high relief St. Gaudens $20 of 1907 are treated as extremely rare as this variant was discontinued. Another example is Liberty Head Double Eagle Type IA (designed by Anthony C. Paquet), released only in the year 1861. The proofs for the Three-dollar piece dated prior to 1859 are extremely difficult to find. Similarly, various dates for different denominations and the year of coins are regarded rare for different reasons.
Tuesday, May 18, 2010
Saint Gaudens $20 Gold Coin: MS 64
In the year 1907, the then US President Theodore Roosevelt commissioned the adornment of the American coinage to his friend Augustus Saint Gaudens. The new series of coins created was named after its designer. Saint Gaudens $20 coins are known for their high aesthetic appeal. They were recognized as the best design pieces. This series was issued from 1907 through 1933. For the numismatics and investors, there are two main sub categories for Saint Gaudens – one without the motto ‘In God We Trust’ and the other with the motto. The coins minted throughout 1907 and partially in 1908, did not contain the words. As they could not gain wide public acceptance, a law was passed in 1908, mandating the engraving of the motto.
The obverse portrays a prominent figure of Lady Liberty holding the symbols of freedom and peace in her hands. Her right, outstretched hand holds the torch of freedom. The left arm is stretched sideways. It holds an olive branch in the middle. The backdrop signifies the backing of the religious ‘glory.’ The reverse features a large bald eagle flying over the image of sun, positioned at the bottom. Along the circumference on the frontal side, 46 stars (1907-1911 releases) or 48 stars (1912-1933 releases) are engraved. The number of stars corresponded with the number of federal states in the US. Mexico and Arizona were included in the year 1912. Therefore, these variants also represent two different types of the coin for the collectors.
Among the most valued Double Eagles are the ones from the rare series. During the last four years, 1929-33, much fewer coins were released, rendering them much sought-after. The eye appeal often drives the grading, demand, and value of the coins. This explains why the MCMVII mint of 1907 enjoys a very active market and is an expensive variety. Ironically, such high appeal coins are most prone to bumps, marks, and defects, all of which contribute towards lowering their value.
Various St. Gaudens are easily available in the mint state, which implies such coins never went into circulation and are present in the original condition. The mint state (MS) Double Eagles are available in grades between 60 and 70, with 70 representing the finest grade and truly flawless. MS-64 is a popular and easily accessible version that signifies no wear & tear and original mint shine. However, it may contain some bag marks, hairline, or molding defects. Its luster is original, but may be marred by some visible spotting of mellowing red copper contents. It is possible for a coin with noticeable deficiencies to slide into the lower bracket, MS-63. Nevertheless, some compensating factors like extra shine may help retain its grade.
The obverse portrays a prominent figure of Lady Liberty holding the symbols of freedom and peace in her hands. Her right, outstretched hand holds the torch of freedom. The left arm is stretched sideways. It holds an olive branch in the middle. The backdrop signifies the backing of the religious ‘glory.’ The reverse features a large bald eagle flying over the image of sun, positioned at the bottom. Along the circumference on the frontal side, 46 stars (1907-1911 releases) or 48 stars (1912-1933 releases) are engraved. The number of stars corresponded with the number of federal states in the US. Mexico and Arizona were included in the year 1912. Therefore, these variants also represent two different types of the coin for the collectors.
Among the most valued Double Eagles are the ones from the rare series. During the last four years, 1929-33, much fewer coins were released, rendering them much sought-after. The eye appeal often drives the grading, demand, and value of the coins. This explains why the MCMVII mint of 1907 enjoys a very active market and is an expensive variety. Ironically, such high appeal coins are most prone to bumps, marks, and defects, all of which contribute towards lowering their value.
Various St. Gaudens are easily available in the mint state, which implies such coins never went into circulation and are present in the original condition. The mint state (MS) Double Eagles are available in grades between 60 and 70, with 70 representing the finest grade and truly flawless. MS-64 is a popular and easily accessible version that signifies no wear & tear and original mint shine. However, it may contain some bag marks, hairline, or molding defects. Its luster is original, but may be marred by some visible spotting of mellowing red copper contents. It is possible for a coin with noticeable deficiencies to slide into the lower bracket, MS-63. Nevertheless, some compensating factors like extra shine may help retain its grade.
Tuesday, April 20, 2010
How to Buy Rare Gold Coins
Buying gold coins requires preparation and learning. Before you buy your first coin, you should commit yourself to learning as much as you can about coins, so that you can make an informed buying decision.
This won't guarantee that you will make a profit from your investment in rare gold coins, but it will increase your chances greatly.
There are many resources available in print and online to help you educate yourself about rare gold coins.
You should start with The Guidebook of United States Coins, popularly referred to in the industry as the "Redbook." This book lists every coin ever minted by the U.S. mint which will enable you to know what's out there. It also gives brief histories and descriptions of the coins and lists their original mintages.
A couple of notes of caution are in order, however.
First of all, original mintages are not always indicative of current rarity. The key to current rarity is the number of surviving specimens believed to be around today. In some cases, issues with small original mintages have high survival rates, making them relatively less scarce today. Conversely, some issues with very high original mintages have experienced huge attrition rates, primarily due to meltings, and thus are very rare today.
Second, the Redbook lists prices which are not at all reflective of current market value. This is because the Redbook is published annually and the coin market trades actively throughout an entire year. There is simply no way for an annual guidebook to accurately indicate the current price of a rare gold coin.
We will let you in on an important fact now, before you embark on your education process (you will discover this on your own later anyway): you should only buy rare gold coins which have been graded and certified by Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC). PCGS and NGC are the two leading independent coin grading firms whose standards have been accepted industry-wide for many years. Buying rare gold coins which have been graded by lesser services creates too much risk and should be avoided.
Just as is the case with any major purchase, you need to know what you are acquiring. Make sure that you are getting advice based upon your goals and objectives. There are many ways to acquire gold across that asset class. Therefore you need to make sure you are applying the right tool to the right job. Lower graded, higher population type coins will tend to perform more like asset protection, whereas higher graded rarer issues will tend to grow more over time.
In addition to buying the right coins for you, you should also compare coin dealers. You will want to buy coins from a dealer who is reliable and can provide you with the level of service and education that you desire. Not all dealers provide ongoing client education in the form of newsletters, special reports and periodic, complimentary portfolio updates. Before you decide to buy a rare gold coin from a coin dealer, you may wish to know what your relationship with that dealer is going to be like.
One final note in comparing dealers: you should check to see what each dealer's rating with the Better Business Bureau is before making your final buying decision.
ITM Trading offer expert advice on how to buy gold coins including rare gold coins.
Thursday, March 18, 2010
The Significance of Gold Price Forecasting
The recent global turmoil has reaffirmed the significance of gold as a safe and viable investment alternative. Other precious metals like platinum have not been able to take the position of gold, due to its high value and price volatility. In addition to retail investors, central banks, institutions, pension funds, etc. also take large positions in gold and drive its prices.
Why gold?
The one most apparent factor is that the lifetime returns on gold have been positive. Gold value is subject to short and medium-term fluctuations. However, it is not susceptible to the ups and downs of the economic and business cycles. This renders it a more stable investment in the long-term.
There is a negative correlation between the dollar rates and the gold prices. In the case of volatile market conditions or a weakening currency, people start replacing their dollar investments with gold. On one hand, this ensures that the investors do not lose their purchasing power by the day. On the other hand, the increased demand for gold pushes its prices up, augmenting the values of gold holdings. A weakening dollar is indicative of strengthening gold and vice-versa (this is mostly true, but not always).
Gold prices are not dependent upon the political or economic conditions. Events, like natural calamities, political disturbance, wartime etc. either do not affect gold value, or put an upward pressure on it. Therefore, in distress conditions gold acts as an effective hedging strategy to prevent the erosion in investor wealth.
Is gold always a ‘buy’?
Like stocks, investors often make a mistake of buying gold at a peak on the expectations of further price rise. Speculative gold trading has a large market and often the speculators accelerate the uptrend through futures and forwards. Such artificial price rally is liable to correction, sometimes leading to sudden plunge in value. Always remember the thumb rule to buy low and sell high.
Is jewelry worth the same as coin, bullion, or bars?
Jewelry yields lesser returns that the other forms due to the mixture of alloys, wear & tear, handling marks, and designing. In addition, gold jewelry is a costly acquisition because of its processing charges.
How to ensure right decisions?
Acquiring gold calls for more than intuition and tracking the mass sentiments. Guidance from expert precious metals consultants, newspapers, trade journals, investment websites, authentic investing forums, etc. are some of the reference points for making informed decisions.
Why gold?
The one most apparent factor is that the lifetime returns on gold have been positive. Gold value is subject to short and medium-term fluctuations. However, it is not susceptible to the ups and downs of the economic and business cycles. This renders it a more stable investment in the long-term.
There is a negative correlation between the dollar rates and the gold prices. In the case of volatile market conditions or a weakening currency, people start replacing their dollar investments with gold. On one hand, this ensures that the investors do not lose their purchasing power by the day. On the other hand, the increased demand for gold pushes its prices up, augmenting the values of gold holdings. A weakening dollar is indicative of strengthening gold and vice-versa (this is mostly true, but not always).
Gold prices are not dependent upon the political or economic conditions. Events, like natural calamities, political disturbance, wartime etc. either do not affect gold value, or put an upward pressure on it. Therefore, in distress conditions gold acts as an effective hedging strategy to prevent the erosion in investor wealth.
Is gold always a ‘buy’?
Like stocks, investors often make a mistake of buying gold at a peak on the expectations of further price rise. Speculative gold trading has a large market and often the speculators accelerate the uptrend through futures and forwards. Such artificial price rally is liable to correction, sometimes leading to sudden plunge in value. Always remember the thumb rule to buy low and sell high.
Is jewelry worth the same as coin, bullion, or bars?
Jewelry yields lesser returns that the other forms due to the mixture of alloys, wear & tear, handling marks, and designing. In addition, gold jewelry is a costly acquisition because of its processing charges.
How to ensure right decisions?
Acquiring gold calls for more than intuition and tracking the mass sentiments. Guidance from expert precious metals consultants, newspapers, trade journals, investment websites, authentic investing forums, etc. are some of the reference points for making informed decisions.
Monday, March 8, 2010
Commodity Trading: Gold and Silver
Since ancient times, precious metals have been the articles of ornamentation and monetary worth, alike. In the modern world, these metals find wide scale uses in jewelry-making, industrial use, investments, and speculation. Gold and silver are the most popular precious metals with universal acceptance. Their affordable prices, structural stability, ease of handling, liquidity, high returns on investments, and global acceptability, make them attractive trading propositions. The investment options in gold and silver include the stocks of mining companies, physical metal holdings, ETFs, and certificates. The current fiscal 2010 is expected to be a fruitful year from the point of view of gold and silver investing.
The US subprime crisis-led global recession destabilized the national economies and paper currencies worldwide. Some of the direct consequences of economic disequilibrium are the fluctuating forex rates accompanied by inflationary/deflationary conditions. This leads to volatile currencies and erosion in monetary holdings. Gold and silver are relatively insulated from such factors as their international prices are fixed daily based on demand and supply. When the currency value goes unpredictable, the investors start looking for alternatives and take exposure in gold investments.
Globally, sovereign gold holdings are important appeal drivers for gold. Traditionally, various nations maintained US Dollar reserves. Due to the consistent devaluation of Dollar over the last few years however, the central banks worldwide switched their sizable holdings to gold investments, pushing the already high demand even higher. As the demand rises, the prices follow, enhancing the worth of gold holdings further. Last December, the gold prices crossed $1,200 per ounce.
In the current scenario, the rationale for gold holdings is that the upside potential on the demand side remains high. Not only the retail investors, but also the fastest growing economies in the world, the BRIC (Brazil, Russia, India, and China) are planning to hedge their positions more aggressively than before. As far as the prices are concerned, the markets have already factored in a correction of almost 10% since December 2009. On the supply side, the position is weakening. The supply has slackened over the years. It is expected to level-off or even plunge in the coming years. Although, some newer reserves have come into light in certain underdeveloped nations, the cost of exploration remains a deterrent. The recycled gold supplies and new search ventures may not be able to keep up with the ever-growing demand in a couple of years. Therefore, the medium to long-term potential of gold is high.
The growing industrial demand will keep driving the prices of silver in future. Silver finds great use in electrical and electronics industry. In the retail segment, silver is used in manufacturing ornaments, decorative articles, foils, coins, bars, and bullion, to name some. The supply of silver is also limited and the demand is rising. With the economic recovery and increased manufacturing activity, the demand for silver is forecasted to rise.
The US subprime crisis-led global recession destabilized the national economies and paper currencies worldwide. Some of the direct consequences of economic disequilibrium are the fluctuating forex rates accompanied by inflationary/deflationary conditions. This leads to volatile currencies and erosion in monetary holdings. Gold and silver are relatively insulated from such factors as their international prices are fixed daily based on demand and supply. When the currency value goes unpredictable, the investors start looking for alternatives and take exposure in gold investments.
Globally, sovereign gold holdings are important appeal drivers for gold. Traditionally, various nations maintained US Dollar reserves. Due to the consistent devaluation of Dollar over the last few years however, the central banks worldwide switched their sizable holdings to gold investments, pushing the already high demand even higher. As the demand rises, the prices follow, enhancing the worth of gold holdings further. Last December, the gold prices crossed $1,200 per ounce.
In the current scenario, the rationale for gold holdings is that the upside potential on the demand side remains high. Not only the retail investors, but also the fastest growing economies in the world, the BRIC (Brazil, Russia, India, and China) are planning to hedge their positions more aggressively than before. As far as the prices are concerned, the markets have already factored in a correction of almost 10% since December 2009. On the supply side, the position is weakening. The supply has slackened over the years. It is expected to level-off or even plunge in the coming years. Although, some newer reserves have come into light in certain underdeveloped nations, the cost of exploration remains a deterrent. The recycled gold supplies and new search ventures may not be able to keep up with the ever-growing demand in a couple of years. Therefore, the medium to long-term potential of gold is high.
The growing industrial demand will keep driving the prices of silver in future. Silver finds great use in electrical and electronics industry. In the retail segment, silver is used in manufacturing ornaments, decorative articles, foils, coins, bars, and bullion, to name some. The supply of silver is also limited and the demand is rising. With the economic recovery and increased manufacturing activity, the demand for silver is forecasted to rise.
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