Top 5 Gold Coins to Buy if You’re Concerned with Future Confiscation
The issue of confiscation is one that is of concern to many of our customers. The reason being is that there’s precedence for this type of action in the United States. For those of you who are unfamiliar with the precedence, in 1933 Franklin Delano Roosevelt signed Executive Order 6102 making it illegal for U.S. citizens to hold gold coins and bullion. An exception was made for a limited quantity of five ounces. The EO was signed on April 5, 1933 and the deadline by which citizens were required to deliver their gold was May 1, 1933. There were threats of fines, penalties, imprisonment, etc. for failing to comply with the EO, which prompted millions of people to exchange their gold coins for paper bills or notes.
Shortly after the deadline passed, the U.S. government revalued the price of gold from $20.67 to $35 an ounce, thereby effectively devaluing the dollar. The ban on U.S. citizen ownership of gold and bullion was eventually lifted by President Gerald Ford in August 1974. During this 41-year ban, the only coins that could legally be traded were collectible or numismatic coins, which were exempt from confiscation in 1933.
Many of our customers are concerned with a repeat of 1933 and are interested in purchasing collectible or numismatic gold coins with the hope or thought that an exception will be made for these coins. The issue is that many of these individuals are primarily interested in purchasing coins as a store of value, for wealth preservation, and a hedge against inflation and a currency collapse as opposed to their numismatic value. In other words, they’re not necessarily coin collectors.
The purpose of this article is not to discuss the likelihood of gold confiscation in the future, but rather, to recommend collectible gold coins that are reasonably priced and won’t break the budget.
Owning these coins may provide you with a sense of security and allay fears of a potential gold coin and bullion confiscation in the future. We’re going to highlight five gold coins, all of which are U.S. minted.
$20 Liberty Head Gold Coins
$20 Liberty Head coins are some of the most popular and traded U.S. gold coins by collectors and investors alike. They fall under the category of pre-1933 U.S. gold coins, as they were produced from 1850 – 1907. When folks think of numismatic coins, the most common coins that are discussed are pre-1933 coins, as the investor and collector community widely consider these to be collectible coins. Of course, in 1933, that wasn’t necessarily the case, unless someone owned a key date or low mintage coin.
As with any type of collectible gold coin, values range from a reasonable premium above the gold value upwards of thousands, if not tens or even hundreds of thousands of dollars. If you’re not necessarily a collector, we recommend that you focus on the Type 3 coins, which were produced from 1877 – 1907. While there are a few coins that were produced in lower quantities and sell at higher premiums, such as those produced at the
Carson City Mint, most of the coins minted over this 30-year period can be acquired at reasonable prices.
Generally speaking, raw or ungraded $20 Liberty Head gold coins will trade at lower prices than certified or professionally graded coins. The reason is two-fold. One – the condition of certified coins tends to be better than rare or ungraded coins. Secondly, there’s piece of mind associated with owning a coin that has been authenticated, certified and professionally encapsulated. While there’s not rampant counterfeiting of this coin in the marketplace, a certified coin might be slightly more desirable for folks that aren’t as familiar with gold coins.
Most certified $20 Liberty Head coins with a grade up to “MS64” can be acquired at reasonable premiums over the gold spot price. For those of you unfamiliar with the letter and number grades used by the third-party grading services, grades range from 1 to 70, with a “70” being a perfect coin. The term “MS” is short for “mint state” and signifies that the coin is in uncirculated condition. The higher the grade, the better the condition of the coin.
For the $20 Liberty Head, it’s less common to find coins in grades of MS65 or higher, and as such, these coins trade at much higher prices, so it’s probably best to stick with raw or ungraded coins or those with a grade of no higher than MS64.
Saint Gaudens $20 Gold Coin
The St. Gaudens $20 gold coin, sometimes affectively referred to “Saints” in the
industry, are another pre-1933 U.S. gold coin. These coins were produced from 1907 – 1933, and for the most part can be acquired at reasonable prices. I know what you’re thinking, so I’ll answer your question before you ask. Yes – technically these coins were produced in 1933, so why are they referred to as “pre-1933” U.S. gold coins? This is because the coins produced in 1933 were melted down after FDR signed the EO. They were all supposed to be melted down, but a few made their way out of the U.S. Mint. Today, there are only 15 – 20 known to exist, and will likely run you at least $10 million, if not more.
As is the case with the $20 Liberty Head gold coin, raw examples are the most reasonably priced. As you might expect, these coins tend to be in slightly better shape than $20 Liberty Head coins. The reason being is that many of them only circulated for a short period of time following the passage of Executive Order 6102. Since these coins are generally in better condition, coins with grades as high as “MS65” can be acquired at the same rate as a MS64 $20 Liberty Head.
While these coins aren’t quite as old as $20 Liberty Head gold coins, they’re just as popular. One reason is that this is considered an iconic coin and quite possibly the most beautiful coin ever produced by the U.S. Mint. In fact, the image on the front or obverse of the coin is so popular, that the same image was used on the front of the American gold eagle, which is the most popular 1 oz gold bullion coin in the U.S.
We’re hesitant to provide you with specific pricing on this coin, as the price may be substantially different by the time you read this article. With that being said, at the time of this writing, a St. Gaudens gold coin with a MS66 grade can be acquired at less than twice the price of the underlying gold value of the coin, making it affordable for most folks.
$10 Liberty Head Gold Coin
The $10 Liberty Head gold coin, produced from 1838 – 1907, is another popular pre-1933 gold coin that can be acquired at a reasonable price. As is the case with the $20 Liberty Head, more recent issues tend to be more plentiful and trade at lower prices than earlier-issued coins. While there are certainly a handful of lower mintage or better date coins that sell at a premium, most $10 Liberty Head coins won’t break the bank.
While pricing, demand and availability of these coins tends to ebb and flow over time, at the time of this writing, a circulated $10 Liberty Head gold coin trades for about half the value of a $20 Liberty Head or Saint Gaudens gold coin. This is a good rule of thumb to use when you’re in the market to acquire these coins.
However, uncirculated versions tend to be more difficult to find and will trade at more than half the price of their $20 counterparts. The pricing structure on these coins tends to more closely resemble the $20 Liberty Head than the St. Gaudens gold coin, in that pricing remains within reach up to the MS64 level. This coin is more difficult to find in the MS65 grade, and in fact, trades at a higher price point than St. Gaudens gold coins in the same grade.
While the aesthetics of this coin aren’t as spectacular as the $20 Liberty Head or St. Gaudens, it’s always nice to have fractional gold coins on hand – especially if you have a smaller financial need that doesn’t necessarily require you to liquidate a larger coin. Furthermore, most fractional gold coins trade at higher prices than larger coins. However, the $10 Liberty Head coin is an exception, as it trades for about the same price per ounce as the $20 Liberty Head or St. Gaudens.
$5 Liberty Head Gold Coin
Thus far it may appear as though we’re highlighting the same coin, just in different denominations. While this wasn’t our intent when starting this article, it just turns out that in our opinion, these are some of the best gold coins to own if you’re concerned with confiscation. The $5 Liberty Head is no exception. This coin was produced from 1839 (beginning one year after the $10 Liberty Head) until 1907. There appear to be more key date or low mintage coins than the $10 & $20 Liberty Head gold coins.
The primary reason is that the Charlotte and Dahlonega Mints, which were in operation for a short time of time, and only produced a limited number of coins, minted coins in this denomination. In fact, it’s the largest denomination coin that these two mints produced. If your primary intent is to purchase gold coins primarily for investment purposes, then the Charlotte and Dahlonega-issued gold coins aren’t the best option for you, but if you happen to be from either of these areas, it’s hard to pass up the temptation to snap one up for your collection.
Circling back to the common date $5 Liberty Heads, these coins typically trade at a slightly higher price on a per ounce basis than $10 Liberty Heads, but not by much. This provides investors and collectors with a great opportunity to further diversify their holdings and allows for more flexibility with the liquidation of these coins. After all, you increase the number of potential buyers when you have smaller or fractional gold coins at a lower price point.
A certified $5 Liberty Head gold coin up to an MS64 grade will run you less than double the price of a raw coin, at least as of this writing, which makes it relatively affordable, especially if you’d prefer having certified as opposed to raw coins. However, the price nearly doubles from an MS64 to MS65 grade, which clearly puts the coin in the numismatic category. Unless you’re a collector, a coin in this high of a grade probably isn’t the best option for you.
While not realizing it at the time, all our recommendations thus far have been for coins that will cost you no more than twice the gold value of the coin. This is probably a good rule of thumb to use – especially if you’re not a collector. If the coin you’re considering is more than twice the gold value, then it’s probably a key date/low mintage coin, is a high-end certified coin, or quite possibly, is just overpriced.
Proof Gold American Eagles
I sense a sigh of relief from our readers that we didn’t continue down the Liberty Head gold coin path. Our fifth and final
recommendation for gold coins that are likely to be exempt from confiscation is the proof gold American eagle. A proof version of the American gold eagle has been produced every year since the inaugural issue in 1986. What makes the proof gold eagle different from the standard bullion American gold eagle is that the coin is produced with a special dye, is double struck, minted in limited quantities and comes with a case, outer box and COA, which is commonly referred to as original government packaging (OGP).
A limited-edition proof coin by its very nature qualifies it as a numismatic coin. The nice thing about this coin is that it can be acquired for no more than 150% of its gold value. This assumes that the coin includes the original government packaging or is certified with a “69” grade. 70 grade proof gold eagles, depending on the year, can be a bit more difficult to come by and trade at a higher price point. This is especially the case if the holder has a special label, such as a signature label.
As mentioned above, you can purchase this coin in the OGP or as a certified coin. It’s also possible to purchase the coin raw in the original capsule, as many people discarded the packaging in the past to free up room for storage. Unfortunately, when they did this, they devalued the coin, as it’s in higher demand with the OGP. This is because coins with the government packaging are IRA-eligible and those that are missing the packaging aren’t.
While we’re not big fans of gold IRA’s, as you’re not able to physically hold your gold, they’re somewhat popular with the public, so you’re reducing your potential customer base by discarding the packaging. One other quick note regarding IRA-eligibility – only coins that include the original packaging are IRA eligible, so keep this in mind when purchasing proof gold American eagles. From a resale perspective, you’re almost always going to receive more for a coin that’s not certified. While this may sound counterintuitive, that’s the case with this particular coin.
As you probably noticed, this is the only modern gold coin that made our list. The reason for its inclusion is the recognizability and popularity of the coin. Whenever you purchase gold coins, whether strictly for investment purposes, as a numismatic coin, or simply to try and hedge against the risk of confiscation, it’s important that you stick with recognized and popular coins. This will provide you with a larger, broader and more liquid market if and/or when the time comes to sell.
Other U.S. Gold Coins
Just a quick note regarding some coins that were omitted from our article. You may have noticed that we didn’t highlight any pre-1933 Indian Head gold coins. This isn’t because these aren’t great coins. In fact, they’re one of our personal favorites. It’s simply because these coins trade at a slightly higher price point than their Liberty Head counterparts. The primary reason is that these coins were produced in smaller quantities.
If you don’t mind stretching your budget a bit, the $2.50. $5 and $10 Indian Head gold coins are great options. Our personal favorite out of the three is the $10 Indian Head coin primarily due to the beautiful design of the coin. Generally speaking, the $5 and $10 Indian Head gold coins trade at around 10% more than Liberty Head gold coins, so again, not overly expensive, but if cost is a big factor to you, you might be better off sticking with the Liberty Head gold coins.
In conclusion, we highlighted five reasonably priced gold coins that we believe would be exempt from confiscation in the event we see a repeat of 1933. While we don’t believe that there’s tremendous risk of gold coins being confiscated again in the future, the government always seems to surprise us, so it’s probably a good idea to diversify your holdings a bit.
We began our discussion with pre-1933 $20 gold coins. The $20 Liberty Head is a great option, as it allows you to acquire a piece of history that’s over 100 years old at a reasonable price. Type 3 coins, those produced from 1877 – 1907, tend to trade at the lowest prices, but if you find a reasonably priced coin struck during the Civil War era or before, we recommend snapping it up. The St. Gaudens gold coin is another appealing option, as it’s an iconic gold coin, and is considered by many people to be the most beautiful gold coin produced in the United States.
We then pivoted to fractional gold coins, first highlighting the $10 Liberty Head coin. This coin is attractive on a number of fronts, but one of the most appealing features is its affordability. Most fractional gold coins trade at a higher premium than larger gold coins, but in this case (at least in circulated condition), you can expect to pay just about half the price of a $20 Liberty Head. While slightly more expensive on a per ounce basis, the $5 Liberty Head gold coin provides even more options with its smaller size and should be considered as part of your pre-1933 gold coin holdings.
We then wrapped up our discussion with the only modern gold coin on the list – a proof gold American eagle. This coin is collectible simply due to the fact that it’s a proof coin. We recommended this coin for two reasons. The first is that the American gold eagle is the most popular modern gold coin in the U.S. Secondly, this coin can be acquired at a much more reasonable price than many other collectible coins in the marketplace.
There are plenty of other good options as well, such as Indian Head gold coins, so don’t limit yourself to our list – especially if you’re able to purchase a collectible gold coin at a reasonable price.
At Atlanta Gold & Coin Buyers, we carry a wide variety of modern gold bullion coins and reasonably-priced pre-1933 and collectible gold coins. Reach out to us today at 404-236-9744 to discuss which options may be best for you and your unique circumstances.
We look forward to hearing from you and earning your business.