Some Pre-1934 U.S. Gold Coins Available at Bullion Prices
With gold prices soaring this year, public demand for gold has varied around the globe.
With gold prices soaring this year, public demand for gold has varied around the globe. In China, the world’s largest gold-consuming nation, private sector demand for gold bars and coins, as measured by weight, rose more than 26 percent in the first quarter of 2024 compared to the first quarter of 2023. This huge increase in demand has been prompted by fears of weak Chinese stock markets, real estate markets, and the prospect of the Chinese yuan currency falling in value.
In India, the world's second-largest gold-consuming country, demand initially slacked off as gold prices rose. But when gold’s price temporarily retrenched within the past two weeks, demand in that country came back to life. Two weeks ago, gold was trading in that nation about $5 below the world spot price; last week, the rise in demand caused gold to trade at about a $15 premium to the global price.
In the U.S. and much of Europe, the reaction to rising gold prices has been almost the exact opposite of what happened in China and India. Private demand to acquire gold tapered off, and there was a surge of liquidation by those who already owned bullion-priced gold. Lower demand for bullion-priced gold was matched by falling demand for common-date pre-1934 U.S. gold coins.
Because of the shift in American and many European markets from net demand to net liquidation, the retail ask premiums above the gold spot price for many bullion-priced gold coins and bars declined. In some instances, premiums fell close to the levels they were in the early months of 2000 after the fears of global computer calamity upon reaching Jan. 1, 2000, did not materialize (causing many panicked buyers of gold and silver before the end of 1999 to just as quickly divest their holdings en masse).
The current lower demand for pre-1934 U.S. gold coins has also resulted in lower retail premiums on these numismatic issues. It is now possible to acquire some circulated $10 and $20 Liberties and even lower Mint State $20 Liberties and Saints at premiums of 10 percent or less above their gold value.
In decades past, when the price of gold rose significantly, bullion-priced coins and bars tended to rise right along with the spot price. Pre-1934 U.S. gold coins tended to lag in price increases, often taking about six months to reflect the higher spot prices. Is it possible that history is now repeating itself? Will pre-1934 U.S. gold coins see higher premiums above metal value in the coming months as U.S. and European people get used to the idea that gold prices have permanently reached higher levels? Stay tuned.
Answer to the Previous Trivia Question
Last week, I asked: Which former U.S. Mint Chief Engraver designed the reverse of a British coin series that features the current King Charles III on the obverse?
Late last year, Britain’s Royal Mint issued a series of commemorative coins honoring “The Lion And The Eagle,” symbols respectively of the United Kingdom since the 12th century and the United States since the 18th century. John Mercanti, the retired longtime U.S. Mint engraver who held the title of chief engraver from 2006-2010, designed the reverse of these commemoratives. At the U.S. Mint, Mercanti was credited with creating designs for more than 100 U.S. coins and medals. Newly installed British King Charles III signed the proclamation in July 2023, approving this coin series.
This Week’s Trivia Question
The first U.S. coin to depict an actual female was the Queen Isabella commemorative quarter in 1893. However, the image of Isabella was not necessarily correct. What was the first U.S. coin to bear an identifiable likeness of a specific female? Come back next week for the answer.
Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award, 2012 Harry Forman National Dealer of the Year Award, and 2008 Presidential Award. Over the years, he has also been honored by the Numismatic Literary Guild (including twice in 2020), the Professional Numismatists Guild, the Industry Council for Tangible Assets, and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at www.libertycoinservice.com. Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So,” and “Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio archives posted at www.1320wils.com).
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