What is the difference between pre-1933 gold coins & modern-day gold coins certified by PCGS & NGC?

Information may not be reliable

If you have any experience in the realm of gold coin investing then you are likely familiar with the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC). These two organizations have set and maintained the standard for gold coin grading for decades. Many rare coin investors won’t even consider a coin unless it has been certified by either PCGS or NGC because uncertified coins and coins certified by other companies simply do not command the social or financial respect afforded to PCGS and NGC gold coins.

Thanks to PCGS and NGC, millions of investors around the world have been able to achieve peace of mind with pre-1933 U.S. gold coin investments. Coins like the $20 Liberty Head Double Eagle, the 1908 St. Gaudens “no motto” gold coin and the $10 Indian Head are commonly purchased as long-term investments by individuals and institutions in need of diversification and a hedge against the dollar. Thanks to NGC and PCGS investors can buy and sell rare coins without worrying about grading discrepancies or counterfeit coins.

This does not mean that the current coin certification system is perfect, however. PCGS and NGC are constantly working to improve their services in the face of innovative scammers and unscrupulous “marketers.” Case in point: modern-day MS69 and MS70 certified gold coins.

While the majority of investment-grade pre-1933 U.S. gold coins carry a rating of MS61-MS66, some companies and online auction houses have begun promoting NGC and PCGS-certified MS69 and MS70 gold coins. These coins usually have premiums that are higher than pre-1933 gold coins, which makes sense if price is based solely on the Mint State rating.

There is only one problem. The MS69 and MS70 U.S. gold coins being sold at exorbitant premiums do not merit such high prices because they are brand new, and as such are expected to be in perfect condition. These coins are not rare in any sense of the word. According to the U.S. Mint, 857,000 one-ounce American Eagle gold coins were sold in 2011 (the most recent year for which sales figures have been provided on their website) alone, and most of those coins would be given a grade of MS69 or MS70 immediately after minting.

This means that for each American Eagle gold bullion coin bought directly from the Certified Gold Exchange at $49 over the spot price, a gold dealer can have the coin certified for about $35 and then sell the coin as a MS70 “numismatic” for around $350 over the spot price to an unsuspecting investor.

Do not pay numismatic premiums for coins that are mere bullion.

If you want to buy bullion, you should buy bullion. If you like the privacy of certified gold coins, buy pre-1933 gold coins. Buying something that is supposedly a collector item but is produced almost a million times each year is bad investing, plain and simple.

To add some context to the topic, consider this:

The PCGS Price Guide for St. Gaudens $20 gold coins lists only one coin rated MS69: the 1907 EX-HR Lettered Edge. There are 15 known examples of this coin and the current market rate is $2.7 million. There are a handful of MS68 Saint Gaudens coins valued from $22,000 to $385,000 each.

The difference between modern-day certified gold coins and certified, pre-1933 U.S. gold coins is clear: the former is nothing more than clever marketing while the latter represents true rarity. The former creates wealth for commissioned salesmen and the latter preserves wealth for investors.

If you would like a free copy of Understanding Certified Gold Coins in 2015 or have questions about certified gold coin investing, call the Certified Gold Exchange’s toll-free Help Desk today at (800) 300-0715 and let “America’s Trusted Source For Gold” show you how to be a successful gold investor.