US Coins

Opportunities for gold commemoratives at melt

Making Moderns column from Aug. 8, 2016, Weekly issue of Coin World:

In uncertain times, people buy gold to protect their assets. No surprise, gold’s value has increased 28 percent this year.

Out-of-favor series can become relatively cheap when they fail to keep pace with rising metal values. For collectors of modern U.S. coins, gold commemoratives fit the bill.

The series of U.S. gold commem­orative coins consists of 34 issues from 1984 to date. Including Proof and Mint State versions and coins struck at multiple Mints, the total is 71 coins. The lion’s share, 62 coins, are $5 pieces, struck in .900 fine gold with a pure gold weight of just under a quarter ounce.

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Gold, at time of this writing, is bid at $1,367.30 per ounce, which means that the gold commemorative $5 half eagle has a melt value of $330.92.

A quick survey revealed that several bullion companies are currently offering “random year” gold commemoratives for sale at $350 or less — the lowest price that I found was $343. Random year means that the company selling the coins sends what they have available. They, not the buyer, choose the exact coin.

Additionally, coins sold this way are in capsules only. Their Mint packaging and certificates aren’t included. 

Last, usually there is no condition specified with these offers. Coins should be free of damage or major impairments.

These offers don’t make sense for collectors building date sets, but here is what’s compelling. The current prices are 3 percent to 6 percent above melt value. That is below the current market premium on American Eagle quarter-ounce gold coins, which run about 8 percent to 10 percent above melt.

Modern gold commemoratives are currently one of the cheapest ways to buy U.S. fractional gold in the secondary market!

One of the benefits of buying collectible coins is that, if gold’s value falls, they should find some price support and their premiums would be expected to grow. That means they can provide more “downside protection” than bullion coins. The coins included in these offers are earlier issues that have higher mintage figures.

An example of a common gold commemorative is the 1987-W Constitution Bicentennial $5 half eagle, which depicts a stylized eagle and quill. With its Proof mintage of 651,659, it’s among the most affordable issues in the series. 

The 1992-W Olympic gold $5 coin shows a sprinter striding forward in front of a hanging flag. The Proof mintage is 77,313.

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