The Gold and Silver Mine – The market value of coins

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A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

A 1794 silver dollar just sold at auction for a record-breaking price of $10 million (including buyer’s premium). This is the most ever paid for a single coin and the first to reach eight figures. It will be interesting to see how long this record lasts.

The coin commanding such a high price was a 1794 Flowing Hair silver dollar, so called because the profile design of Lady Liberty shows her hair flowing behind her. The coin is the finest known specimen, being in virtually perfect condition and looking like the day it was minted more than 200 years ago.

The year 1794 was the first our young country struck a silver dollar for use in commerce. We had been relying on using coins from other countries, most notably the Mexican eight reales, which remained legal tender as one dollar until 1856.

Not that many years ago it was unheard of for a coin to sell for over $1 million, although that price point was routinely surpassed by other collectibles such as antiquities and paintings. Now it is not that unusual to see rare coins surpass that level. A recent example and previous record holder is the 1933 $20 gold piece that supposedly had its entire production melted as a result of President Roosevelt’s requirement that all gold coins be returned to the government and that gold ownership by U.S. citizens was illegal.

Somehow one coin escaped that fate and ended up in the collection of the Egyptian King Farouk. When his collection was auctioned, the coin disappeared from sight until several years ago. When a dealer attempted to bring the coin back from Europe, government agents seized the coin, declaring its possession illegal since all were supposed to have been melted. After lengthy hearings about the rightful ownership, a compromise was reached wherein the coin would be auctioned and the proceeds split between the government and the owner. That coin realized more than $7 million.

Since then another 10 1933 $20 gold pieces were discovered, purportedly found in a safe deposit box owned by an old jeweler. So far the government has not been in an equally benevolent mood and has seized the coins. Their fate still rest with the courts. My opinion is that if these coins were to come to market, the value would drop, probably to less than $1 million per coin.

With coins now routinely selling at such high levels, their attractiveness for investment purposes is evident. However, when one chooses to invest in coins, care must be taken to purchase coins that are scarce, in demand and of the highest quality. While there is no guarantee any investment will bring a future profit, following that advice will tilt the scale in the investor’s favor.

Douglas Keefe is the president of Beachcomber Coins Inc. He and his wife, Linda, operate Beachcomber Coins and Collectibles, formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old Wawa building just past the former Cardiff Circle. They also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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