Tips on Buying Cheap Gold Coins : Joshua McMorrow-Hernandez

By Joshua McMorrow-Hernandez for CoinWeek.com ……
I recently bought a circulated 1910 Saint-Gaudens $20 double eagle gold coin, and it only took 23 years.

Big whoop? Perhaps not to deep-pocketed bullion investors or rare coin aficionados. But for me, it was a numismatic accomplishment I doubted I’d be able to achieve financially.

An unusual rags-to-riches tale this hardly is. Rather, this story reflects a common situation many coin collectors know all too well: gold coins, even run-of-the-mill pre-1933 United States gold coins, are simply too expensive for most hobbyists to afford. Read enough coin forums and you’ll see plenty of posts by people who are looking for advice on buying the cheapest gold coins. Many of these folks simply can’t lay down the cash for even one pre-’33 gold coin. Gold coins don’t put food in the fridge, keep the lights on, or provide shelter from rain, wind, and snow.

As many as 10 million people actively collect coins in the United States, according to one high-end estimate touted by experts in 2012. David Lawrence Rare Coins President John Feigenbaum suggests there are “between 100,000 and one million active coin collectors in the United States,” as he once wrote in a post he published on popular question-and-answer site Quora in 2012. Regardless, whether there are 100,000 or 100 million coin collectors in the U.S. (a figure the United States Mint once claimed during the height of the 50 States Quarters program in the early 2000s), there are certainly far fewer people than counted among either of those figures who can afford to collect gold coins.

There are no verifiable stats to cite concerning the number of collectors who actively pursue gold coins. Yet if 20,000 or even 50,000 people consider themselves collectors of gold coins, that figure is still relatively small compared to the presumably millions of people, numismatists and non-numismatists alike, who have aspirations of owning even just one gold coin.

The 1910 Saint-Gaudens $20 gold double eagle I labored to buy is nothing special from a numismatic standpoint. It is an Extremely Fine-About Uncirculated specimen with a few minor but somewhat distracting hits. I believe there may even be some unusually reflective hints of a past light cleaning on an otherwise luster-kissed yet decidedly dull surface.

The coin was sold to me in a nondescript 2×2 cardboard mount.

It might’ve been a slight purchase for a well-heeled bullion stacker with dozens of circulated common-date Saints just like it sitting in his or her bank box. But for me, buying that 1910 Saint was the culmination of nearly a quarter century of saving and waiting.

Saving – And Waiting – For a Dream Coin

I entered the hobby in October 1992, back when gold was about $345 per ounce and a common-date circulated $20 Saint-Gaudens double eagle sold for $400. I quickly fell in love with the idea of buying three particular coins: a 1909-S VDB Lincoln cent, any Draped Bust silver dollar, and a Saint-Gaudens $20 gold double eagle. That numismatic trinity was my personal holy grail of coin collecting. I was 11 years old and growing up in a blue-collar family, and I considered myself lucky to get a dollar a week in allowance. And since each of the three coins I wanted so dearly cost roughly $400 in the early ’90s, $1,200 for the trio might as well have well been a million dollars to this cash-strapped kid.

I watched gold prices dip to a tempting $255 per ounce at one point in the summer of 1999 – but even paying $300 or $350 for a circulated Saint-Gaudens $20 gold coin was out of reach for me at 18 years old. I had college to think about, and $300 could pay for four credit hours at my local state university back then (now $300 would barely cover the cost of one credit hour at the same school; it might buy a few dozen cups of coffee to kick-start some all-nighters, though).

So I forswore the notion of buying a $350 gold coin in 1999 and instead satisfied my numismatic cravings by looking for the then-new 50 States Quarters in circulation. I’ll never forget how long it took to find that first Delaware quarter in my pocket change. I certainly cherished the five-coin 1999 50 States Quarters Proof set Mom and Dad bought me from the United States Mint catalog that year.

To make a long story short, I abandoned collecting 50 States Quarters after that coin program ended in 2008, graduated Summa Cum Laude from university after chipping away at school as finances allowed, and entered the white-collar world. Suddenly, numismatic purchases I once considered pricey didn’t seem so expensive. Of course, at the time “expensive” meant any coin that cost me more than $50. I certainly wasn’t pulling in six figures at my first post-college job, and I’ll never forget my blue-collar roots!

Still, for the first time in my life, I could save $10 here and $20 there for numismatic purchases that, until then, were financially infeasible for me. My hobby savings eventually allowed me to buy problem-free, circulated examples of the 1909-S VDB Lincoln cent and a 1799 Draped Bust silver dollar right around the time gold was reaching its recent high of more than $1,860 per ounce in September 2011. A double eagle at the time would have cost as much as my other two dream coins combined.

So I waited. And saved. And waited. And saved some more.

Gold prices drifted downward, just as my hobby savings were replenished enough to consider buying a Saint. My numismatic funds were still too anemic in December 2015, when the per-ounce price of gold briefly settled at $1,050, but I managed to swoop in and buy a 1910 Saint-Gaudens $20 double eagle six months later, paying my longtime local coin dealer $1,340 for the privilege to buy my first – and only? – Saint-Gaudens double eagle.

It’s no showstopper, and it certainly isn’t a Registry Set candidate, but my 1910 $20 gold double eagle is a crown jewel in my collection. At the very least, I can be satisfied in knowing that I worked hard for many years to earn it.

Cheap Entry-Level Gold Coins

The $20 Saint-Gaudens double eagle was my heart’s desire since I was 11 years old – even then I appreciated the mastery and symbolism behind Saint-Gaudens’ iconic design of Miss Liberty carrying a torch before a sunrise over the United States Capitol. Yet for many, a Saint isn’t the end-all-be-all of gold ownership.

Coin collectors who simply want just one gold coin – any gold coin – certainly have far less expensive options than the Saint-Gaudens $20. Fellow CoinWeek writer Al Doyle wrote an article in 2013 that profiled several inexpensive gold coins, including 1/10th-ounce fractional versions of bullion coins such as the American Gold Eagle, the Canadian Maple Leaf, the South African Krugerrand and the Austrian Philharmonic. Each can be bought presently for less than $200.

For hobbyists who would like to buy a more historic gold coin made in the United States, it’s possible to find affordable deals among the tiny Liberty Head $1 dollar gold coins struck from 1849 through 1889. Type I Liberty Head gold dollars, which measure 13 millimeters in diameter, represent the smallest coins ever struck for circulation in the United States. Common-date circulated examples from the series can be bought for under $200 each. Meanwhile, common-date circulated examples of the Liberty Head and Indian Head $2.50 quarter eagle gold coins, struck from 1840-1907 and 1908-1929, respectively, are presently obtainable for under $300 apiece.

If $200 or $300 for a single gold coin is too expensive, there are still cheaper deals to be had, but you better break out your coin loupe – you’re going to want one to see your coin! 1/20th-ounce Canadian Maple Leaf gold coins, which measure 14 millimeters in diameter, are currently available for less than $100 in the secondary market. They also have the largest diameter of the gold coins I’m going to suggest buying throughout the rest of this article, so start squinting!

Even tinier than the Canadian 1/20th-ounce Maple Leaf is the 1/40th-ounce Britannia gold coin from Great Britain. It has a nominal (face) value of 50 Pence and weighs a mere 0.8 grams. At just eight millimeters in diameter, it is also the smallest coin Great Britain has ever produced. Yet in Proof, it’s a masterpiece in its own right. The coin costs $110 to $120 in the secondary market, which means it sells for roughly three times more than its bullion value. But it’s still a cheap gold coin with serious bragging rights and numismatic swagger far greater than its diminutive physical size.

If $100 is still too much for the budget, there is at least one more option for the cash-strapped collector: the Indian Fanam. Struck from approximately 1700 to 1830, the minuscule gold coin weighs one-third of a gram and measures about seven millimeters wide. Indian Fanam gold coins are regarded as the world’s smallest gold coins, and they carry a significant degree of historicity, too, as most are more than 200 years old. They are ideal for introducing coin collectors to the fascinating and dynamic world of Indian coins, which spans more than 2,200 years. Ultimately, the Indian Fanam also represents a stellar buy for the coin collector who is looking for cheap gold coins. The micro-sized Indian Fanam can be bought for less than $40.

The Fanam, the Liberty Head gold dollar, and any of the small gold bullion coins from the United States and around the world, collectively represent the cheapest gold coins. Meanwhile, pre-1933 gold coins like the Saint-Gaudens $20 double eagle may cost more than their smaller counterparts but are pieces worthy of saving up for due to their numismatic significance and cherished status among U.S. collectors.

Whether your budget and ambitions take you to the realm of smaller, fractional bullion coins or carry you into the arena of historic gold pieces made during the first decades of the 20th century or earlier, remember that owning a gold coin – any gold coin – is a numismatic accomplishment that, for most collectors, is little more than the stuff of dreams.

Save what you can for as long as you have to and you just might turn your dreams of owning a gold coin into reality.