European Gold Coins- Gold as an Investment
Look to the European Gold Market for Today’s Best Values!
By Don McAlvany:
European gold coins are a segment of the precious metals investment industry that I believe is still currently under-recognized and under-valued, and I believe ripe for substantial profit potential. While European gold coins carry many of the advantages of U.S. gold coin investment, they are still not widely collected, and are still available at relatively bargain prices. As demand increases, I anticipate this market will grow red-hot over the coming years. Right now you still have an opportunity to make European gold coins a substantial part of your investment portfolio.
30 years ago, I began recommending to my clients that they buy nice uncirculated U.S. gold coins for their profit potential. Many listened, and some did not. Since then, gold has risen 850%, the purchasing power of the dollar has fallen 80%, and uncirculated pre-1934 U.S. gold coins are up 1,000% – 10,000%. Because of their condition and rarity, many U.S. gold coins have far out-paced the rise in gold bullion.
So here we are again, at what I believe is a prime early entry point for an under-valued market. At ICA, we are recommending to our valued clients that they buy high quality, uncirculated European gold coins for their substantial profit potential. I believe we are on the threshold of another huge move in the value of uncirculated gold coins… this time in European fractional gold coins.
In 1998, thanks largely to the dishoarding of gold coins by European central banks (in preparation for the new EURO currency), some previously rarely seen coins became available. In some cases these coins had remained virtually undisturbed in bank vaults for over 100 years!
When I first became aware of these large groups of coins, it felt like deja vu. Once again we have the opportunity to purchase uncirculated pre-1934 gold coins at nearly bullion prices. You may have seen ICA’s literature in recent months describing some of these beautiful and historically significant gold coins. What you may not be aware of is the overwhelming public demand for them! Since we first started offering these coins to our investors, they have snatched up over 2 Million of them!
While considering an investment in European gold coins, keep in mind these criteria for purchasing small gold coins:
- Easily Identified – stay with a recognized coin from a well-known country. When it comes time to sell your coins, you will want a well-established market.
- No Restrikes – many bullion coins, such as the Swiss and French 20 Francs or Austrian gold coins are restrikes. Restrikes might exhibit older dates, but they were actually minted many years after the date that appears on the coin.
- Low Mintages – for a coin to have collector appeal, it must have some scarcity or rarity. In other words, the number of coins originally minted should not be astronomical.
- Uncirculated Condition -collectors and investors alike are drawn to an attractive higher-grade coin. Seek out coins that were never released for public circulation, but were hidden away in bank vaults.
- Significant Age – like any true collectible, age does matter. A piece of furniture made in the past 10 years obviously does not qualify as an antique. The same applies to coins. A coin minted in the past few years has little collector appeal.
- Fractional Sizes – most European gold coins are 1/4 ounce or smaller – very logical since they were once actually used as money! Their small fractional size is especially convenient when it comes time to sell, barter, or liquidate the coins.
- Semi-Numismatic – the coins need to have a valid rarity value to avoid dealer reporting requirements. The combination of age, mintage and condition is very important.
- Genuine Upside Potential – each of the coins that I have acquired have been genuinely scarce. Yet, each has been purchased at a fraction of their historical catalogue price.
It is obvious, after 10 years and hundreds of thousands of coins, that these small fractional European coins are possibly the most popular coins that we have ever sold!
10 Questions You Should Ask Before Buying Collectible Coins
Because we guarantee to buy back our coins, at the same grade, we consider several factors that our coins must have in order to guarantee our own liquidity. Liquidity is to collectible coins what location is to real estate.
We use these criteria to help us determine what types of coins will be desirable and easily liquidated. In considering any type of collectible coin, you should do the same.
- Was the coin minted prior to 1934? After 1934, the U.S. and the rest of the world discontinued minting coins for circulation. Any coins minted after 1934, were minted primarily for bullion reserve purposes.
- Is the coin uncirculated? Was the coin ever released for circulation, or was it one of the few that were held in their original “mint state” condition
- Will the coin command a premium in the future? Is the coin attractive? Is it of historical significance? Is it desirable to collectors?
- Is the coin a “re-strike”? In some instances, coins were reproduced by a country reusing old dies to mint the coin. For instance, the Swiss and French 20 francs were reproduced in the mid 1940’s using old dies, bearing an older date. In essence, these coins became “reproductions” of original coins, and in our opinion should be avoided.
- Is the coin protected from confiscation? Precedence was set by our country when Franklin D. Roosevelt instituted Executive Orders recalling gold bullion in exchange for paper currency. This effectively pulled real money out of the hands of the public, and put a currency that could be easily reproduced into circulation. The only gold people were allowed to own was in jewelry and collectible coins. These collectible coins are far less likely to be confiscated.
- Is the coin transaction non-reportable? Many years ago, ICTA, the Industry Council for Tangible Assets helped establish the definition of a collectible coin. Any coin that maintains a 15% premium over its melt value upon liquidation is considered a collectible, and is therefore non-dealer re-portable.
- Does the coin have relatively low mintage? Although collectors are very interested in condition, they are also interested in the scarcity and rarity of a coin.
- Is the coin fairly valued? Is it over-valued due to heavy promotion or excessive commissions?
- Is the coin correctly graded? Is it independently graded by a third party source, specifically PCGS (Professional Coin Grading Service) or NGC (Numismatic Guarantee Corp)? ICA offers these independent grading services, as well as further guaranteeing each of the coins that it sells.
- Is the dealer reputable? ICA has a 40 year history of buying and selling precious metals and is one of the largest dealers in the country. We enjoy long-term relationships with our clients, many of which have become multi-generational in many cases.
International Collector’s Associates is a leading global expert in precious metals investment, including the burgeoning European gold coin sector. Call one of our expert staff members and discuss how you can take advantage of the profit and safety opportunity that European gold coin investment offers you today.