Rare gold coins versus gold futures: deciphering the price difference for collectors and investors

Michael McConnell | Rare Gold Coins | Precious Metals in San Diego

Gold futures are not always an accurate way to track the value of rare gold coins.

By Michael McConnell

Gold has been all over the headlines lately, and with good reason. According to a recent Market Watch report, gold futures have risen more than 70% over the past four years alone. These values, in turn, have prompted broad interest in the purchase of gold bars and coins. However, there is a crucial difference between pricing rare gold coins and gold futures. When it comes to collecting coins versus purchasing precious metal shares, it is important to understand the varying factors that can influence market value. Also, as we have noted in past columns, rare coin collecting is rarely an appropriate method for solely building a nest egg. Those who choose to pursue coin collecting are most successful when they do so for the sake of education and entertainment, with lasting tangible value being one of several incentives for buying coins, as opposed to the collector’s primary goal.

Simply put, rare gold coins are not necessarily priced in direct accordance with gold futures. Even in the midst of gold’s meteoric rise in value, a rare 1909 piece that sold for $34,500 in summer of 2008 went for $23,400 last fall. Numismatists (rare coin scholars) ascribe instances like this 32% decline in value to the U.S. government’s increase in gold sales. In the wake of the recession, demand for gold and other hard assets prompted officials at the U.S. Mint to sell a wide variety of gold bullion coins. However, when buyers snatched up these Mint pieces, it may have reduced the value of classic coin series’ already in circulation among collectors and may, in turn, have had a detrimental impact on high-end collectible values.

Several months ago, we wrote a column about the fluctuating nature of precious metal futures. This argument holds as true now as it did then. No matter how “hard” or secure an asset it may be, gold will always still be subject to market activity and speculation. Therefore, the difference between gold futures and rare gold coin pricing is simply another reminder for buyers to do their research before purchasing gold on a whim – and for collectors to focus on the intrinsic value of a timeless and educational hobby rather than the prospect of monetary gain.

As experienced rare coin dealers, we strive to help customers at both of our San Diego locations to improve their research methods, develop an eye for genuine pieces and learn how to make the best purchases for their collections. In addition, we offer clear guidance when it comes to fair pricing, as well as honest assessment, purchase and sale of rare gold coins. To learn more about precious metals in San Diego, stop by The Coin Shop in La Jolla or get in touch online today. Visit www.sandiegocoin.com.

Related posts:

  1. Commodities versus collectibles: a precious metals buying guide
  2. Buying precious metals: a beginner guide
  3. As daily gold prices fluctuate, coin dealers offer valuable common sense
  4. Coins for cash: where and how to sell rare coins from your collection
  5. Investment or insurance? Defining the difference for today’s precious metals buyers

Short URL: http://www.lajollalight.com/?p=95081

Posted by Social Media Staff on Sep 19, 2012. Filed under Columns, Michael McConnell, Sponsored Columns. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Leave a Reply

La Jolla Community Calendar


Bottom Buttons 1

Bottom Buttons 2

Bottom Buttons 3

Bottom Buttons 4

Bottom Buttons 5

Bottom Buttons 6

RSS North Coastal News

  • Summer 2014 Carmel Valley Open Basketball League Champs: ‘Carmel Valley Spurs’ August 30, 2014
    On Aug. 18, the Carmel Valley Spurs defeated the Solana Beach Stray Cats, 67-41, in the 5th/6th grade championship game in the Master Sports Carmel Valley OPEN Basketball League. Over a 10-game season, the offense scored 659 points while giving up only 364 on defense. The average game score was 66-36. They had the best rebounders, best shooters, and best def […]
  • Hundreds turn out for Carmel Valley planning board meeting on One Paseo August 30, 2014
    Hearts and visions collided at the Aug. 28 Carmel Valley Community Planning Board meeting, where an overflow crowd turned out to debate the future of the last major slice of the community left to be developed. All 400 seats in Canyon Crest Academy’s theater were filled, and people spilled out into the aisles and crammed into standing-room only spots in the b […]
  • Del Mar Library book-to-movie club picks fall reads August 30, 2014
    Print Goes to the Movies, a book/movie discussion group held at the Del Mar Branch Library at 2 p.m. every second Friday, has announced its upcoming dates and movies. […]