When investing in gold many people choose to invest in bullion coins. By purchasing bullion coins a buyer invests money at current market value into gold with its proven history of stable and upward trending with confidence that further down the road that trend returns gold at a market value higher than initially invested. To explain we’ll use details of American gold coins circulated from the time of the 1849 California Gold Rush to articulate the process of valuing gold coins.
First Gold Minting
The largest amount of gold owned to that date was being mined in 1849 during the historic California Gold Rush. The first coins minted from the historic Gold Rush were done at the Philadelphia mint in $2.50 pieces with simple “CAL” stamps in them. Anxious to diversify and excite the public in the new currency, Congress enacted a plan to coin gold in amounts ranging from 1 to 20 dollars. These first minted gold coins were termed “double eagles” and came from 1850-1907 were issued in 3 major types. We will remain brief by only discussing the 3 Liberty Head coins.
Liberty Heads
Double Eagle Liberty Head Type 1 : very few of these pieces are still found in circulation, and even fewer are in “mint condition”. The majority of mint-grade coins known to still remain were from the 1854-1856 and 159-1860 New Orleans (mintmark “O”) series as well as a few rarities from the circulation time spanning all of 1849-1866 in Philadelphia (no mintmark) and San Francisco (mintmark “S”) also.
Double Eagle Liberty Head Type 2 : the greatest change made to coins struck for circulation in 1866 were 4 words added as unifying code to a country on the brink of civil. Staring at our dissolution into the Union and Civil forces a petition was made to include “IN GOD WE TRUST” on newly circulated Eagles. More than 16 million coins from 3 mints – Philadelphia, Carson City (“CC”), and San Francisco (“S”) – but a large quantity were used for international trade. These coins, circulated from 1866-1876, have also become a rarity coveted by collectors.
Double Eagle Liberty Head Type 3 : over 31 years, from 1877 to 1907, the U.S. mint struck the largest quantity of the 3 Double Eagle variations. At 5 minting facilities – Philadelphia, San Francisco (“S”), Carson City (“CC”), New Orleans (“O”), and Denver (“D”) during the last 2 years – there were more than 64 million coins produced and entered into circulation. Aside from its much larger production numbers the greatest difference between type 2 and 3 is the notation of its value on the coin. Type 2 printed: TWENTY D.” while Type 3 printed: “TWENTY DOLLARS”.
Collector Coin Valuation
While none of these seem like very serious or consequential differences, and they’re not in reference to currency use, they are the epitome of collection value. Gold coins have a worth based on their “weight in gold” additional to an individual collector’s perceived value of the piece in reference to their own personal collection. A collector who possesses all American Double Eagle gold coins minted from 1849 to 1933 with the exception of the Double Eagle Liberty Type 2, known to have reached far and wide overseas during circulation, will value it much higher than a casual first-time gold investor. These are the considerations necessary for practical investing, especially in early and novice gold coin investment ventures.