Coinvesting: The Coin Investor's Blog

Fastest Appreciating Gold & Silver Coins

2009-03-13T16:23:00.000-07:00

Average 5-Year Price Increase (2003 low to 2008 high)

1. Ecuador 1 Condor Gold (1928): +1100%

In September 2008, the rare 1/4 ounce Ecuadorian gold coin sold for a record price of $2,800 on Ebay Live Auctions. Estimates during the time of the sale were only between $ 1,000 and 1,200, with previous sales averaging $ 1,250.

Unknown to many collectors, the Condor has long been undervalued. Just 5 years ago, its estimated value was only $ 300 per NYINC Signature Auctions, but coins were on sale for even less. Since a limited number were minted in a single year (1928), collectors have finally realized its rarity. In fact, it's been months since we've seen the coin listed for sale anywhere.

2. France 5 Francs Louis-Philippe (1830-46): +750%

Depicting the "Gentleman King," the 5 Franc silver coin is a great complement to any collection. In spite of the recent correction in the silver prices, the Louis-Philippe has maintained its enormous price-to-silver ratio. Considering that the market price of silver is presently at about $14 an ounce, it's easy to see why this .90 oz. silver coin is such a good investment.

Although the average circulated coin sells for roughly $75, Heritage Auctions sold an 1846 dated coin in good condition for $195.
Other scarce coin dates are 1831-W, 1834-W, and 1842-W, each minted in Lille and currently listed between $150 and as much as $375 on Ebay.

3. Coronet Double Eagle (1849-1907): +500%

Also known as the Liberty Head, this one ounce coin has recently become one of America's most popular historic coins. The rarest types are the 1879-O and 1886, which sell for over $20,000. Numismatic experts suggest that prices may slow down, but the low mintage and wide accumulation of the coin cannot be ignored.

4. Morgan Silver Dollar (1878-1904): +480%

Many Americans have at one time or another possessed a Morgan. Produced mainly from the silver at Comstock Lode, Nevada, the Morgan was for a couple of decades the face of American currency. Although hundreds of millions were minted and circulated, they're an essential part of nearly every American numismatic collection.

Mintage dates range from 1878 to 1904, as well as one other year, 1921. Because the price of silver increased nearly 400% from 2003-2008, these coins, which have always carried a premium over market prices are amongst the fastest appreciating coins in the world. Circulated, common date coins currently average roughly $25, which is still more than 75% higher than silver's current market price. However, the most scarce dates can fetch $400 or more: 1879-CC (Carson City), 1880-CC, 1881-CC, 1886-S, 1888-S, 1889-S, 1893, 1894, 1895, and 1899.

5. Peace Silver Dollar (1921-35): +400%

Another "must have", the Peace dollar is loved by investors and coin collectors around the world. Investors also use the coin as it has always maintained a significant premium over the market price of silver.

After production of the Morgan was halted, Peace dollars were minted from 1921-28, 1934-35, then again in 1964. Scarce dates include 1921 and each year after 1927 and sell for $100 and higher. Common date coins sell for an average of $22, still 60% higher than the current market price of silver.

6. Walking Liberty Silver Half Dollars (1916-47): +400%

What was widely available on Ebay just a few years ago, the Walking Liberty halves are harder and harder to find. Although they're less than half an ounce, they currently sell for the price of a whole ounce of silver bullion.

The rarest dates are 1916-17, 1919, 1921, 1928, but the most valuable is the double reverse 1946-P.

7. Silver Bullion Coins (Recent Dates): +400%

These coins include the American Eagle, Canadian Maple Leaf, Mexican Peso, Australian Silver Ounce etc. Widely owned and universally identifiable, they've always been attractive to investors and collectors alike.
As the price of silver skyrocketed 360% from 2003-2008, these coins have as well. Nonetheless, when prices corrected by as much as 40% last year, these coins maintained most of their value -- proving that they're more than just bullion.

8. Buffalo Head Gold Ounce (2006): +400% (considering an annualized rate of 80%)

Although these coins haven't been around for 5 years, they've quickly become a favorite amongst collectors. Months after the US Mint issued them in June 2006, they became available on Ebay for as little as $600. Now, the average cost is $1,250, well above the present market price of gold. Since its debut, the Buffalo Head has appreciated at an annual rate of a whopping 80%.

9. Uruguay 5 Pesos Artigas Gold (1930): +360%

Minted only in 1930, this 1/4 ounce gold coin fetches about $360, about 50% higher than the market price of gold. According to the Standard Catalogue of World Gold Coins, "Only 14,415 were released. Remainder withheld."

There's speculation that the unknown amount of remaining coins were released by the Central Bank of Argentina during its 1998 currency crisis. It may still be possible to find the coins on Ebay and with major rare coin dealers but don't expect to find them so easily in the future.

10. Austria 100 Coronas Gold Ounce (1915): +315%

Five years ago, the Austrian coin was so undervalued that it was selling for as much as or often less the market price of gold. Today, the coin sells for an average of $1,100, more than 20% higher than gold's current market price.

One of the first gold ounce (.90 purity) coins minted in the world, the 100 Coronas depicts Emperor Franz Joseph I. Minted between 1908 and 1915, the most common date is 1915. Fewer and fewer are available and almost none from early years are found on Ebay or with major coin dealers.

1928 Condor Sells for Record $ 2,800

2008-10-05T12:27:00.000-07:00

The 1928 1 Condor gold coin sold for a record price last month of just shy of $ 3,000, making it one of the fastest appreciating gold coins in the world. Before auctioning the coin, the ebay seller estimated its value between $ 1,000 and 1,200. Earlier this year, the rare Ecuadorian coin sold for about $ 1,250 in auctions and its estimated value was just $ 300 in 2005 (per NYINC Signature Auctions).

At just under 1/4 of an ounce of pure gold, the coin has definitely proven to be a superb rare coin investment. With gold down about 15% from its 2008 high, numismatists obviously think the Condor is more rare than previously believed. Just how rare is it, we ask? Here are our conclusions:

- There are currently no 1928 gold condors for sale on ebay.
- Heritage Auctions no longer has any left.
- No other major auctioneers or rare coin dealers have any.
- Steinberg's had just one for sale last week at exactly $ 1,450. It was removed from inventory.
- No one is exactly sure how many Condors were minted, but the mintage was extremely low
- 1928 was the only year in which the coins were produced.

It's easy to see how the Condor has become one of the most coveted coins amongst numismatists this year and we only expect this sentiment to persist.

Coin Collecting 101

2008-10-05T12:11:00.000-07:00

Rare and old (pre-1933) coin collecting is a timeless and proven method of not only storing your wealth, but as a reliable long term investment tool. These coins not only hold the current value of their metallic content, they hold an intrinsic value of coin type, date, and rarity. Millions of coin collecting hobbyists are drawn to their beauty, diversity, and value. For these millions, coins are more than just metal. They are both historical memoirs and art forms representative of different epochs and styles respectively. For example, the Morgan dollar reflects the Comstock Lode era and old west Nevada silver rush culture of the mid to late 19th century. Collectors of Morgans are often taken in by the vision of pistol-carrying, cowboys flipping a Morgan silver dollar onto the bar of a saloon. From a more artistic standpoint, the Peace silver dollar represents the art deco style that defined the ambitious 1920's. For centuries, the most popular mediums have been silver and gold, on which we'll focus. The reason that silver and gold coins are, by far, the most popular coins collected is that they have been used as money for centuries, if not millennia.

Silver: as Good as Gold, Only Better

Silver is overlooked, undervalued, and seems to be forever in the shadow of more popular gold. However, silver is real money and always has been. In fact, both "silver" and "money" translate to "argent" in French; as well as "plata" in colloquial Spanish. That's because for over a thousand years, silver was used as money for common purchases and exchanges. Since gold has always been more scarce, it has been used for more expensive purchases and exchanges. Silver makes the best precious metals investment because it's too undervalued in terms of its ratio to gold. For over a thousand years, the two metals have maintained a natural ratio of 10:1 until in recent decades. Now the ratio is more like 75:1, obviously skewed. Not only this, but silver has become a lot more rare than investors realize. For one, silver production has been on the decline in recent years in spite of its high silver-to-gold ratio. In other words, the price is too low and supply is waning--creating a silver shortage. That's right, when both prices and supply are on the decline, smart investors can't help but to start to buy. This includes the likes of billionaire investor Warren Buffett, who began a massive investment in silver bullion in 1998 and helped launch the first silver ETF. Needless to say that Buffet received ridicule for concentrating on silver because it was and still is scorned. Buffet's investment philosophy, of buying undervalued investments at the right time is the type of philosophy every investor should adopt and because long-term rewards are sure to follow. Since his purchase, silver has run from $ 5 to a high of $ 20 in early 2008--a 400% increase.

Gold: Everyone's Favorite Metal

Of course, we recommend gold as it's clearly the most preferred metal of exchange for myriad reasons. Its qualities and value make it highly sought, yet still obtainable (whereas platinum and rhodium often seem "too expensive" to most investors). Gold is considered to be one of the most beautiful of all metals and has always been adorned for its brilliance. Unlike silver, gold does not tarnish, corrode, or rust. It is the most ductile and malleable of all metals, which is often why coins will include a small percentage of copper, silver, or platinum in them. It's also used against inflammatory diseases and for millennia has been described as having misunderstood mystic powers.

Holding Period:

Rare and old coins should be held for many years in order for the values to mature. As previously mentioned, it's best to purchase them a cyclical market lows and sell at highs. After researching, you'll discover that precious metals cycles (the period between a low to a high, back to a high or vice versa) usually last 1 month long. Nonetheless, there are long term cycles as well that vary from specific metal type and rare coin type. In a commentary we posted in May 2008, we explained how rhodium, platinum, gold, and silver each has a 20-year long term upwards trend that starts and ends at different times. For example, gold's price rose from $35 in 1960 to a high of $850 in 1980, then began a downtrend that lasted until 2000. Now an uptrend has begun and is in full swing until, most probably 2020. It's important that we emphasize that the long term uptrend is full of short term cyclical action (fluctuations). Of course, we're speaking in terms of the value of the metal itself, not the rarity or age of your coin. Because there is high demand for specific coin types, their long term yield is greater than their metallic content. So undoubtedly, owning coins is the best way to invest in precious metals:

- Coins almost always carry a premium over the market price of precious metals.

- Most rare coins require no IRS reporting and as collector's items, are not subject to confiscation.

- Rare coin values are less volatile than gold and silver bullion because collectors are more interested in keeping coins for a longer period of time, as opposed to trading them.

- Coins are a very liquid monetary instrument. You can always find buyers on ebay.com, at your local coin dealer, through larger online coin dealers, by advertising your coins in the classifieds, at pawn shops, or by scrap metal buyers.

- Coins are more easily identifiable and verifiable by more people than scrap metal, jewelry, and bullion bars.

- Coins give you a better long term return on your investment.

What do you think? Are there investment mediums comparable to rare and pre-1933 coins?