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 Replies: 8 / Views: 1,787 |
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Pillar of the Community
Canada
3692 Posts |
 So I'm wondering what would happen to the price of $5 and $10 gold pieces from Canada or the States if the price of gold were to continue its upward trend? Does the numismatic value rise with it, or what kind of premium do they usually carry during such a trend? I don't even mean any rare or scarce coins - just common dates. Do they get rarer because people are melting coins into bars? Is it worth holding onto these types of coins?
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Bedrock of the Community
Australia
21788 Posts |
When valuing a gold coin, it must be remembered that there are two components to it's value.
The numismatic value only must be separated, and the coin's performance in the numismatic market assessed.
The AGW obviously has to be to determined to get the bullion value component.
It is only with very high value gold coins that the bullion value can be considered negligible.
Is it worth holding onto bullion coins? That depends on the individual collector. I have a St Gaudens double eagle, I bought it 15 years ago, just because I love the design.
I have a few ancient gold coins. Typically, these coins are rare, because they have avoided the melting pot for 2000 years or so. When they were originally struck, they would have been bullion only as well.
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Pillar of the Community
 Canada
3692 Posts |
I wasn't talking about bullion coins. I meant gold coins from the turn of the last century (like 1899-1900). How well do common dates do after gold bubbles crash?
Edited by Libertad
03/08/2011 9:35 pm
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Bedrock of the Community
Australia
21788 Posts |
With common dates of Australian sovereigns Edward V11 and George V, they are valued in catalogues as "BV + %", then refer to the footnote.
The "BV" obviously refers to bullion value and the % is no more than 25%, for an EF coin, and lesser % for a coin in lower grade. The footnote refers to the % extra, varying with the grade. These coins simply track the bullion price, no matter what that price is. When the bubble collapses, so does the catalogue value of the coin, along with the %tage.
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Pillar of the Community
United States
759 Posts |
I just happen to have a couple of old retail price lists available to look at: Paul Sims from from Aug 1992 and Jules Karp from around the same time period. Gold was about $345 per ounce then. Price for one Liberty double eagle AND one St Gaudens, Premium BU, was $779. Yes, for 2 double eagles. And you really could score a high MS coin sometimes. So that premium to spot seems like it's about $55 per coin. If a double eagle today goes for $1550, that's what, about $165 over melt? So like I expected, the premium in nominal dollars does expand, but at a lesser rate than the metal value.
Interestingly, Classic $2.50 and $5.00 gold, XF/AU were $369 each. These are more numismatic items than bullion, for sure. You could probably get raw ones now for 50% more, if you're lucky. $3 Princess, VF/XF, were $499, 40% more for one now if patient. Not enough time for me to do the math on those, but it's obvious both the reward and risk with common date gold is in the underlying bullion value. Whichever way the price of the metal goes, so goes the spread between melt and sales price, apparently.
So to answer the question, it doesn't appear that rarity increases significantly, if much at all.
And it's both entertaining and depressing to look at these old price lists!
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Bedrock of the Community
Australia
21788 Posts |
In 1965, I bought my first Australian sovereign for seven pounds ten shillings (AU $15), or for about U.S. $10. A sovereign is .2354 AGW. That is why I was able to build a complete Australian gold type set of 16 coins: 9 sovereigns and 7 half sovereigns. I completed the set in 1967 with an Adelaide Pound in VF, which I bought for AU $250. I sold that set in 1976 for a very big increase in price.
I was about to commit myself to a mortgage in 1976, and I couldn't put a roof over my head with a stack of rare coins!
Cost would absolutely prevent me from building a set like that that now.
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Rest in Peace
United States
9104 Posts |
Quote:
$779. Yes, for 2 double eagles. And you really could score a high MS coin sometimes. So that premium to spot seems like it's about $55 per coin. If a double eagle today goes for $1550, that's what, about $165 over melt? So like I expected, the premium in nominal dollars does expand, but at a lesser rate than the metal value.
$55 per coin would be a 13% premium then. $165 per coin would be a 12% premium today. |
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Pillar of the Community
Canada
3692 Posts |
So what I got so far is that their values generally track bullion value with a steady premium over the years and that smaller denominations have a slighter higher overall value. Correct?
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Rest in Peace
United States
9104 Posts |
A higher premium over spot, yes. Keep in mind, tho, the premium isn't constant. If there has been a big run-up, the premium will disappear until the price settles.
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Replies: 8 / Views: 1,787 |
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Posted 03/04/2011 11:19 am
