Are Pre-1933 Gold Coins a Buy Right Now?

Are Pre-1933 Gold Coins a Buy Right Now?

Jan 22nd 2020

Pre-1933 Gold coins are way too cheap; at least that is our opinion. Years ago, premiums over spot gold were significantly higher than they are today. Premiums over spot for common date $20 Saint Gaudens, Gold Liberties, and Gold Indians were sometimes north of 20-30%. Now, these some of these gold coins can be found for less than a 10% markup over the spot price of gold. Many are puzzled as to why the premiums have dropped so much over the years, but we have a couple educated guesses.

Educated Guess #1: The Emergence of Modern Day Coins

One potential reason as to why the premiums on some Pre-1933 Gold Coins have dropped is because of the introduction of modern coins. The U.S. Mint, along with all other world mints such as the Canadian Mint, South African Mint, and others around the globe, have done a great job at promoting and getting collectors hooked on modern day gold coin issues. The sleek new designs and near perfect strikes capture the attention of a new collector base that is just obsessed with eye appeal. By far, the U.S. Mint’s introduction of the Gold Eagle design in 1986 has been the most successful modern day gold coin program ever. After all, it is no wonder why the Gold Eagle stole some of the Saint Gaudens thunder when it's design was taken from Augustus Saint Gauden's original Saint Gaudens design. Collectors also are enamored by the sheer beauty of a freshly struck coin with little to no imperfections, while the original Saint Gaudens are often far from perfect, even if in uncirculated condition. The coins are also known to have black spots. Furthermore, many rare coin collectors are attracted to the higher purity and greater gold content of the Gold Eagle.  Gold Eagles are .999 pure and have exactly one troy ounce of gold while Pre-1933 Gold Coins are .90 pure. Lastly, since world mints are heavily promoting new gold coins to the public with millions of dollars in ad spend, the Pre-1933 gold coins are solely being promoted by coin dealers whose advertising budgets are a lot smaller than the various mints who are promoting the new gold coins.

Educated Guess #2: The Learning Curve

While modern day coins are pretty easy to educate oneself about, Pre-1933 gold coins can be a bit more tricky. As humans, we typically take the path of least resistance, or in this case the easy way out. Most modern coins are sold directly by the mint who produced them. The mints set the price points, they provide all the information on the new issue coin, and thus the collector does not have to look much further than the mint's website itself to educate him or herself and know if the piece is a good deal. The U.S government always gives it citizens a good deal right? If you can’t get one from them who can you trust? On the contrary, Pre-1933 Gold coins need to be researched. Mint Marks, mintages, and quality play a huge role in determining price and a lot of mistakes can be made along the way without proper education. We feel that this learning curve is leading many new collector to purchase new issues as opposed to classic gold coins.

Our Conclusion

We believe there is a lot of hidden value in buying 100+ year old gold coins for only a small premium over the spot price of gold. Some of these gold coins can be bought for only a tiny premium over what you can purchase a 1 oz gold bar for. If your willing to educate yourself or find a reputable dealer like Bullion Shark to educate you in making the right purchases, you may be pleasantly surprised. On the other hand, those who want the smallest learning curve possible, modern coins are a great choice. 

*These are solely the opinions of Bullion Shark, LLC and are not intended to be used as investment advice. Please consult an investment advisor before investing.