Rare Coin Investor

>Large denomination gold coins have moved up with the price of gold but are not anywhere near their own previous market highs. $20.00 Saint Gaudens and $20.00 Liberties in grades MS 63-65 are the coins of the season. These undervalued rarities have been disappearing from the market. Their availability has been dwindling since the beginning of 2007, but are still available. Getting the highest grade possible is the best way to assure return on your investment as the population of these rarities in high grade drops off significantly. Even though gold has reached record levels rare coins haven’t.

>Both Liberty and Indian $10s and $20s are seeing bid jumps and record prices at auction houses with gold’s higher prices. The particularly exciting aspect of these results is the fact that rare coins lag behind gold’s movement, meaning there are a lot of buying opportunities even with prices moving up. We expect to see a continuation of this activity in 2008 as new investors flock to rare gold in search of better gains. Some of the more notable prices realized at auctions recently include a 1931-P $20 GSG in MS-66 ($126,500), an 1854-O $20 Liberty in AU-50 ($368,000), and a 1910-S $10 Indian in MS-66 ($82,800).

>Gold Rush

The first “gold rush” in the United States was not in 1849, but 1828 in Georgia and North Carolina. The discovery of gold in southern Appalachia dates from 1799, when a 17 pound gold nugget was found in a creek near Charlotte, North Carolina by a 12-year-old boy. Mining in the area continued on a limited basis until 1828, when larger deposits of gold were located in two counties.

Templeton Reid, of Georgia, started the first private mint devoted to minting gold coins in the United States in 1830. He minted $2.50, $5, and $10 gold coins for only two and one-half months before closing his operation due to lack of public confidence in the gold content of his coins.

A much more successful enterprise was that of the Bechtler family of Rutherfordton, North Carolina. Metallurgist, gold and silversmith Christopher Bechtler and his son Augustus were recent German immigrants to Philadelphia. They moved to North Carolina in 1830, probably with the intent of being close to a readily available supply of usable gold. As with future enterprises in the West, miners in the area faced many obstacles when shipping their gold dust to Philadelphia for assaying purposes. Recognizing heavy demand as well as the potential for a good profit, Bechtler started an assay and coining business in 1831. The Bechtlers’ output was known for its well-assayed and honest coins. Their coins were so highly regarded that, in the Civil War, the Confederacy stipulated that fiscal obligations were payable in “Bechtler gold” rather than Union, state, or Confederate coins or currency. The Bechtlers struck the first gold dollar produced in America. The family closed their operations in the early 1850’s.