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Profit Opportunity in Pre-1933 U.S. Gold Coins The Advantages of Adding Common-Date Gold to Your Modern Bullion  As a leading gold firm with 21 years of experience, our top priority is to evaluate a constantly changing marketplace. Our goal is to educate and advise our clientele in building balanced and diversified portfolios that will accomplish their individual objectives, improve their financial security, and maximize their long-term profit potential.
To that end, we specialize in both modern Gold Bullion and United States Gold Coins struck prior to the year 1933 (known as Pre-1933 Gold), two segments of the Gold Market that form a powerful combination. Modern Gold Bullion (like American Eagles) provides an excellent foundation for our clients. Bullion offers a simple acquisition that will accomplish many of the standard goals of those acquiring Gold for the first time. Expanding Beyond the Limits of Gold Bullion We’re obviously bullish on gold. We’re very confident that it will provide the economic hedge, financial security, and profit center our clients seek. We agree with the projections of many analysts that gold can easily double in value. If that occurs, all modern bullion will rise accordingly making all of our bullion clients quite successful in their Gold endeavor. However, for all the pros in owning Bullion, this report will address how diversification can counter its one flaw – Bullion profits are anchored and limited to the percentage increase of the Gold spot price. They offer no opportunity for leveraged gains over and above the core Gold Bullion Market. However, there is a segment of the Gold Market that offers the solution. “I Just Want To Buy Gold” It’s normal for modern Gold Bullion to be the primary interest of new clients. At this early stage in their understanding of the Gold Market, Bullion makes perfect sense. It’s the foundation of your portfolio. You need to own Bullion. However, we’d be short-changing clients if we didn’t teach them how to maximize their long-term potential, so we pose a common question we hear from clients after building their Gold Bullion foundation, “is there a way for me to diversify and increase my upside potential without a lot of extra risk?” The answer is yes and the key market segment is “Common-Date Pre-1933 U.S. Gold Coins”. But Aren’t Rare Coins Extremely Expensive? This is often the next question we hear from a client we’re teaching. The answer is yes. Rare Coins can easily demand four, five, and even six figures. HOWEVER, we’re not discussing Classic Rare-Date Coins, but instead their Common-Date counterparts. The difference between these two sub-segments of the Pre-1933 U.S. Gold Market is self-explanatory. Both segments include coins from the same era with the same designs. The difference is that coins from some years prior to 1933 are very scarce, which are called “Rare-Dates”. Conversley, there are also years from which more coins are still available today, thus “Common-Dates”. With a price range between $1,000 and $2,500 per coin, this market offers an excellent bridge between the low-cost of Gold Bullion and the extra profit potential of Rare-Date Coins. Why Do They Offer Better Profit Potential? The answer is due to their fixed and limited supply. Here’s where 1933 becomes an important year. Starting in the late 1700’s, our ancestors used Government issued gold coins as currency. After some time being circulated in the money supply, just like today’s pocket-change, these gold coins wore down and banks would send them in to be melted and made into new coins. This normal process of attrition greatly reduced the supply of gold coins to a fraction of their original mintage figures. In 1933, at the height of the Great Depression, the U.S. Government stopped minting gold coins for currency and recalled all outstanding coins in circulation. Once confiscated, most of these coins were melted into gold bars to pay off foreign debts. Fixed and Limited Supply We refer to the supply as “fixed” because no more Gold Coins were ever minted for use as money again after 1933. The supply of Pre-1933 Gold Coins is “limited’ in comparison to the supply of millions of modern bullion coins which increases every year. Simple supply and demand fundamentals illustrate how increasing demand from investors and enthusiasts can easily overwhelm this limited supply and create a powerful profit surge over and above the long-term return of the large and increasing supply of gold bullion. But I’m Not a Coin Collector Our clientele definitely crosses the spectrum. On one end, we have clients who own gold strictly for hedge and investment. On the other end, we have experienced enthusiasts with whom we build modest to multi-million dollar collections that range from common Modern Bullion coins to the most impressive Rare-Date Coins. Most clients eventually find themselves with a combination of the interests generally attributed to investors or collectors which leads to an important lesson. When we hear “I don’t want to be a coin collector” we realize a client is making a simple misconception that “coin collecting” is a negative.
A Perfect Relationship In reality, it’s quite the opposite. In Precious Metals, investors and collectors actually form a mutually beneficial symbiotic relationship. It’s often overlooked that the interest of enthusiasts is as varied as the collectors themselves. There are thousands of collectors that focus on Gold Eagles. Does this mean that a Bullion investor should avoid Gold Eagles? Absolutely not – the Gold Eagle is one of the best options in Bullion. We understand that many of our investors aren’t interested in collecting old nickels and dimes. In return, we urge them to understand that collectors are their ally because they act as a strong, consistent second source of demand. Therefore, as the bull market in gold continues, Common-Date Coins will rise due to their gold content as well as increasing demand from investors AND collectors. Such a surge in demand can create very aggressive upward moves in Pre-1933 Common-Date Gold as the fixed and limited supply is overwhelmed. How do I Know What I’m Doing? That’s what we’re here for. To educate, advise, and guide your acquisitions. We want to talk to you so we can further discuss the specifics, but here’s what you need to know to start that conversation:
• Denomination: Common-Date Gold Coins are available in the four main denominations: $20, $10, $5, $2.5 with Gold content from about an ounce to about a tenth of an ounce.
With the universal process and standards in place, these coins are extremely liquid and heavily traded daily worldwide. The system has created a healthy exchange market that facilitates the relationship between dealers and clients, protects the coins and, most importantly, protects the owners of the coins. What Coin Offers the Best Value? We’re always watching the Common-Date Gold Market and re-evaluating our top recommendations based on their current value and long-term potential. Again, we’re here to discuss the specifics with you, but we’ve created this excellent chart above to illustrate the best Common-Date options. For example, look at the minimal downside compared to the amazing upside potential of the $5 Liberty MS-64. With Modern Bullion trading above the high value of the previous gold bull market, the strong opportunity in Common-Date Gold is clear as they trade well below their All-Time Highs. Excellent Fundamentals We’ve found this education to be highly successful in helping clients understand the opportunity in adding Common-Date Pre-1933 U.S. Gold to their Gold Bullion. In summary, here’s why we believe this is a fundamentally sound move.
• Diversification: A critical strategy for most
investors, it always makes sense to spread your
exposure across market segments to reduce risks and increase the strength of your portfolio as well as the profit potential.
Just five years ago, the possibility of the U.S. Government confiscating gold wasn’t on the minds of many Americans. The economic chaos of the recent past has changed that and today there is a growing concern that the Government will repeat the gold confiscation of 1933. It’s impossible to say how likely such action is or exactly how it would be executed. However, we believe that Pre-1933 U.S. Gold Coins have the best chance of being exempt from confiscation due to their track record of such status and the fact that they’re valued above their gold content. Therefore, Pre-1933 U.S. Gold adds a greater insurance policy to your Bullion as well as better upside potential.  Raw Pre-1933 U.S. GoldWe also recommend a portion of each client’s precious metals portfolio be invested in “Raw” Pre-1933 U.S. Gold Coins. These are the exception to the rule of grading and certification. Raw Gold Coins still display attractive eye-appeal but are lower quality than their Investment-Grade, Certified counterparts above. They are not certified and graded by a third-party. This creates an ideal variety of characteristics that make them a combination between Gold Bullion and Investment Grade Pre-1933 U.S. Gold.
• The larger coins ($20 and $10) offer similar gold content and exposure to rising gold prices as modern Gold Eagles.
Need advice? Call us and we can build a portfolio to fit your goals, objectives, and areas of comfort. Questions? Call a Gold Specialist at 1-800-928-6468
Austin Rare Coins, Inc. Serving Investors & Rare Coin Collectors since 1989 7200 North Mopac • Austin TX 78731
* Possible upside potential projected from current retail to all-time highs. Upside not limited. Downside risk is measured from current retail to recent lows only. Risk may be higher. Past performance is no guarantee of future value or future risks. ** Prices based on gold at $1,205 and subject to market fluctuation. Copyright 2010 Austin Rare Coins, Inc. All Rights Reserved |
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