Basic Kinds of Gold Coins
Bullion Coins. Gold coins such as American Eagles, Mexican Pesos and South African Krugerrands, for example. These are gold coins that are usually struck in hugh quanties and sold for a small premium plus the cost of manufacture over the London Spot Gold price by the governments that make them. There price depends on the spot price of gold on the day they are sold. If the spot price goes up, they cost more. If the spot price goes down, they cost less. They are basically commodity gold similar to gold bars, but sold in convenient coin form and may be reportable on your tax return depending upon the manor in which you purchased them. They have been confiscated in the past by many governments, sadly including our own.
Semi-Numismatic Coins. The so called common gold trade coins of the past, such as Sovereigns and circulated U.S. Double Eagles. They carry a larger premium over the London Spot gold price then bullion gold coins but a smaller premium than numismatic gold coins. They are often circulated coins and may be sold certified or uncertified depending on the buyer’s requirements. Because these were all made before 1934 and they are all legal tender in the countries where they were made, they were never subject to confiscation by the US Government and unlike gold bullion; they are usually not reportable on your tax return.
Numismatic Coins. Gold coins of the past that are collectable by type, or date, or mint and are always sold certified for authenticity and grade to the collector or investor. The price of gold numismatic coins has almost no relationship at all to the price of gold bullion, and as such they have never been subject to confiscation by the US Government. These coins owe their value to rarity, supply and demand, popularity and quality. They come as Common Date Coins, or coins that were struck in large quantities or have high survival rates. They also come as Rare Date Coins, or coins of which few were made or have low survival rates. These gold coins are more akin to fine art than gold bullion, and are priced accordingly. The record price at auction for a single rare US gold coin is a 1933 Double Eagle for $7.9 Million. Most coin dealers trade in all three kinds of gold coins.
© 2006 Neil S. Berman, Inc.
