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Pre-1933 European and Latin American Gold Coins: Just gold or more?

The recent auction of a rare British sovereign by an Australian auction firm illustrates the future rarity potential for pre-1933 gold coins. This small gold coin (.2354 net fine ounces) dated 1920 with a barely discernible "S" on its reverse was expected to fetch nearly $500,000 (Australian) which would establish a new record price for an Australian coin and a world record price for a British sovereign. The auctioneer, Kurt Jaggard Monetary Auctions, originally sold the coin to a collector/investor in 1979 for $4250 (Australian) -- an extraodinary return by any standard. The fact that someone would pay such a price for a British sovereign tells volumes about the potential in this genre of gold coinage.

Historic European and Latin American gold coins from the mid-19th to early 20 centuries, of which the British sovereign mentioned above is an example, offer a rich vein of opportunity for the individual interested in combining gold ownership with numismatic potential. This potential is not too different from the one presented by U.S. $20 gold pieces and silver dollars in the 1950s and 1960s when early accumulators were able to acquire quality specimens in bulk at slight premiums over the bullion price. Those near bullion price acquisitions paid dividends years later (during the gold bull market in the 1970s and 1980s) when scarcity and quality began to play role in the pricing. Bags of uncirculated silver dollars and rolls of $20 pieces then became eligible for culling and selling at premium prices by grade, date and mintmark.

There is no way of knowing with certainty whether or not a similar situation will develop with the pre-1933 European gold coins, but the opportunity presents little or no additional risk for those with an interest in owning gold anyway. What's more, the endeavor is rich in history, and the satisfaction of a well-constructed collection pays psychological dividends beyond just potential profits.

As it was with the American coins at mid-century, grading is virtually a non-issue for the more common date items -- or at least not the issue it would become later with the advent of grading services, encased coins and hundreds (even thousands) of dollars of price difference from one grade to the next. Pre-1933 European gold coins generally come forgivingly in two grades -- circulated and uncirculated.

Having sold thousands of these items at USAGOLD - Centennial Precious Metals over the past decade, I have had the opportunity to personally inspect a wide variety of national design types and mintages and marvelled at the quality state of preservation on a large cross-section of items. These circumstances present today's investors with an extraordinary opportunity worth exploiting.

Historic European gold coins offer, in my mind, one of the great, largely untouched and potentially lucrative opportunities in the field of gold investing today. If you have been looking for a new interest, I think you will find this area worth your attention. We hope you enjoy browsing online through our coin selections and take the opportunity to acquire the scarce and unusual items we come across and offer through our monthly "Buyers' Group" specials.

Although finding a 1920 Sydney mint British sovereign may be a bit much to ask for, there is a great expanse of opportunity between that record price and current premiums to stimulate the interest of the value-conscious buyer. At the same auction featuring the 1920-S British sovereign, an 1893 British sovereign (Queen Victoria, veil head) was listed at $45,000, a Melbourne King Edward at $1750, and a 1911 King George in uncirculated grade at $400. And those are a few examples among many in one small category of this large area of interest.

The allure of gold coins awaits you.

Happy hunting!

Michael J. Kosares January, 2004

Caveat: There is no gaurantee that pre-1933 European and Latin American gold coins will acquire the numismatic premiums mentioned in this article, nor does USAGOLD-Centennial Precious Metals, Inc. gaurantee that you will receive a premium for these items at your time of sale.