Every now and then we'll take a look at a particular coin in our effort to help informed readers as they ponder their portfolio and coin collections. And no discussion on gold coins would be complete without including the St. Gaudens.
Having been redesigned under President Theodore Roosevelt, this was THE gold coin of the early 20th century. It's interesting to note that that years later the other President Roosevelt, Franklin Delano, ended its mintage when he issued executive order 6102 in 1933. This order effectively made it illegal for Americans to own gold currency, bullion and gold certificates. All such coins and bullion was required to be turned in to the U.S. Treasury, in exchange for $20.67 per ounce (over $350 today). Anyone found guilty of "Hoarding of Gold" could face a $10,000 fine or ten years in prison, or both.
There is much to the history of this executive order, and the events that followed. The end result, however, was that such gold ownership in America was illegal for over 40 years. There are those who think that our government could impose such legislation again, especially in light of today's massive debt machine.
Tragically, many of the coins turned in were melted down for storage purposes. For the investor, this resulted in greater rarity for the St. Gaudens, which only adds to their value today.
Augustus Saint-Gaudens, after whom the coin is named, is considered to have created one of the most beautifully majestic coins ever minted. It's interesting to note that he died before finalizing his designs. Over 12,000 high relief coins were struck and released into circulation during 1907-1908. Because the relief was so great, the coins could not be struck with one blow. Charles E. Barber, chief engraver of the Mint, had to modify Saint-Gaudens' design in order to lower the relief, facilitating greater production. The difference is indeed striking. The images below are of a 1907 St. Gaudens, one of these rare, high-relief, coins.
The obverse (front/heads) of the coin features the Lady Liberty, representing victory, holding forth a torch, representing enlightenment, to light the way of peace, represented by the olive branch in her left hand, as she walks across rocky ground. The sun's rays pour forth from behind the U.S. Capitol with the 46 United States of America, represented by stars, arrayed around her. The reverse (back/tails) features an American eagle in flight, seeming to relish in its freedom, also backed by rays from the sun.
One of the aspects of this coin that makes it so attractive to investors is its relatively low premium, which offers several advantages.
- Premiums tend to absorb quick market movements. They act as a sort of cushion, following the value of the underlying metal with less volatility.
- Because the premiums are so low after recent gains in gold values, the probability of greater gains as gold goes up is increased.
- There are no IRS reporting requirements if the investor sells these coins to a dealer.
- If the coins are graded by PCGS or NGC then they are quickly recognized for their value at any reputable coin dealer.
Other reasons these coins are attractive for investor and collector alike include:
- Because of its fame, it's recognized throughout the world.
- While rare, its rarity does not make it a speculative coin. Its value is well understood.
- With a purity of .900, each coin contains almost a full ounce of gold (0.9675 troy ounces).
- As we mentioned, it's a work of art. Such coins are simply enjoyable to own.
- They're easily transported. Since the value of the coins is universally recognized and readily accessible, they are an excellent means of transporting value.
Whether you're just getting your portfolio set up or have been a long time holder of gold, you'll want to keep these beauties in mind. If you have any questions, please call our friends at Goldco Direct. They'll be more than happy to assist you in evaluating your options.
Tomorrow we consider something that, for some reason, often comes as an afterthought. Where do you store your gold?
For your prosperity,
The Gold Informant