the double eagles are from us. uu. $20 gold coins, which served as currency in the United States from 1850 to 1933. Their reign as America’s leading gold coins ended with President Franklin Roosevelt’s 1933 Executive Order 6102, which required Americans to hand over your gold coins and gold bars.
Roosevelt’s action is often referred to as a forfeiture, but technically it was a so-called because those who turned in their double-headed eagles received twenty dollars in paper money, which had the same purchasing power at the time as the twenty-dollar double-headed eagles .
Reading: What is a double eagle coin
double eagle gold coins are highly promoted
Today, double eagle gold coins are the most frequently promoted gold coin by telemarketers, and any investor thinking of buying gold double eagles should know all the facts before issuing a check. Invariably, telemarketers value Double Eagle gold coins several hundred dollars above the current market for the coins.
Promoters typically cite two reasons for purchasing Gold Double Eagle Gold Coins: the 1933 Roosevelt Call and the potential for premium increases. readers of this page will learn the main flaws in both reasons.
double eagle coin specifications
Double eagle gold coins are of two types: the $20 liberty head gold coins (1850-1907) and the st. Gaudens gold coins (1907-1933).
The double eagle gold coin measures 34mm in diameter and contains 0.9675 ounces of gold in an alloy of 90% gold and 10% copper. The official gross weight of the double-headed eagle gold coin is 516 grains, but what is important for investors to know is that the double-headed eagle gold coin contains 0.9675 ounces of gold.
the double-headed eagles and the golden eagles
Investors new to the gold coin market often confuse double-headed eagles with modern gold eagles, which the us. uu. mint began production in 1986 for sale to gold bullion investors. Any initial confusion is understandable due to the similarity of the coins, as both coins bear the Lady Liberty design by famous sculptor Augustus Saint-Gaudens.
The lady liberty design is often mistakenly referred to by new investors as walking liberty, which it is not. the walking liberty design is the a.a. Weinman’s interpretation of Lady Liberty, and adorns the American classic. walking liberty half dollar, minted between 1916 and 1947.
early 1980s double eagle gold coin deals
In the early 1980s, when gold prices were in decline after rising as high as $850 in 1980, very little new money was coming into the gold market. As a result, many traders, as a means of generating income, recommended that South African Krugerrands, then dominating the bullion market, be exchanged for double-headed eagles, claiming that Krugerrands were going to be confiscated by the US. uu. government.
The confiscation was an easy story to sell because South Africa’s apartheid system was being condemned around the world and the negative publicity surrounding the issue gave credence to the idea of confiscation. however, only a token ban was placed on the importation of Krugerrands, and there was never any proposal in Congress (or anywhere else) to confiscate Krugerrands.
However, many investors switched to double eagles and their premiums increased substantially. Over time, however, the fear of confiscation disappeared and premiums fell.
double eagle premiums rise during year 2000 scare
In 1998, as the year 2000 approached, the gold coin market was poised for another promotion of double eagle gold coins. this time, the promoters touted them as protection against the collapse of the world’s computers and banking system. Fear was so widespread that banking regulators required year 2000 compliance. Today, Y2K is a dim memory.
However, many investors bought into the 2000 scare and bought into the idea that double-headed eagles were “non-forfeitable.” non-confiscation is a theory that has no validity, but again premiums are raised on double-headed eagles. however, when January 1, 2000 rolled around and no problems arose, investors began to sell and premiums plummeted.
This chart shows how vf $20 liberty double eagles prices change over time relative to spot. at times the $20 liberties have been traded for spot and at other times they have commanded large premiums.
Specifically, in the early 1980s, late 1980s, and early 1990s, vf grade $20 liberty double eagles were spot traded; however, in the mid-1980s and mid-to-late 1990s, they earned premiums. since the year 2000 scare ended, vf-grade $20 liberties have been spot traded, making them more attractive to investors.
Charts plotting the prices of higher grade double eagles versus spot show the same relationship: premiums change over time. in 1992, common date ms-62 st. gaudens sold for $20 above the spot price. When buying double-headed eagles, investors should take a close look at coin premiums. for an extensive read on why many dealers promote double-headed eagles and other old American eagles. gold coins, read myths, misunderstandings and outright lies.
European hours of double-headed eagles
another great danger of investing in double-headed eagles is the huge reserve in europe. At the end of World War II, the United States had the largest gold reserves in the world, and the U.S. dollars were redeemable for gold by foreign (and American at the time) governments
after the war, usa. he invested billions in the reconstruction of europe through the marshall plan. furthermore, to stimulate european economic growth, the us. opened its markets to European products. Consequently, massive amounts of dollars flowed into Europe.
As prosperity returned, Europeans turned those billions of dollars into gold. So great was the conversion that on August 15, 1971, President Nixon closed the “gold window” because the bailouts threatened to hollow out the United States. vaults of gold much of the gold shipped to europe was old usa gold coin. even before world war ii, usa Gold coins were popular in Europe and were hoarded by gold-loving Europeans.
The exact number of double-headed eagles held by European banks is not known, but it is in the tens of millions. between 1850 and 1933, usa uu. mints turned out more than 165 million double-headed eagles. Today, several large numismatic wholesale firms have offices in Europe to find ancient US treasures. uu. coins a company used to advertise “shipments arriving from europe every day”. another company has “offices in brussels, paris and zürich”.
double eagle bonus reduction
Since the year 2000 scare, premiums for double-headed eagle gold coins have been steadily declining, and low-grade (vf/xf) double-headed eagles can be purchased at a location nearby. still, gold bullion coins give investors more gold for their money. however, few bullion coins offer investors the ability to increase premiums.
Although bullion coins are the best investments right now, when double-headed eagles come back for sale at or near spot, they will be the best buys. Double-headed eagles will be the best investment because they will one day reach premium again and give investors the opportunity to increase the number of ounces of gold they own without spending more cash. a real-life example illustrates the principle.
exchange double-headed eagles for bullion coins
In the late 1980s, a cmigs customer purchased 192 vf $20 liberty gold coins. A look at the chart shows that the client bought the coins close to the spot price of gold. in 1998, when premiums were high, the client exchanged the 192 $20 liberties for 1-ounce gold eagles. the client received 236 gold eagles for a 50-ounce increase.
The client enjoyed a 50-ounce increase because a double-headed eagle contains 0.9675 ounces of gold. So the customer exchanged 186 ounces (192 x .9675 = 185.76) of gold for 236 ounces. Buyers of gold coins should be aware of this trading strategy as it can be quite profitable.
double eagle coin grades
Anyone who invests in double eagles and other old American eagles gold coins soon learns about “coin grades.” The “grade” of a coin is a visual assessment of how much wear and tear a coin has suffered. coins with little wear are rated higher and command higher prices than those with significant wear. however, a low grade key coin could easily be more valuable than a high grade common date coin. a key coin is a rare and hard to find coin. on the contrary, coins of common date abound.
Below is the spectrum of coin grades developed by the American Numismatic Association (ANA). The discussion that follows is to educate new investors on the intricacies of coin classification; it is not a guide to coin grading. investors who want to know more about the old us states. uu. gold coins and classify them must get a copy of r.s. yeoman is a guide to united states coins, commonly called the red book.
Low quality coins show considerable wear. coins graded ms-60 are considered mint condition (mint condition [ms] is used interchangeably with uncirculated). mint condition coins show no signs of wear, but may show contact marks, and the surface may be blotchy or dull. Coins graded MS-61 and above should have an increasing brilliance or have a light shade with very few contact marks. the higher the gloss or shade and fewer contact marks, the higher the graduation. an ms-70 coin would be in mint condition. Very few regular issue coins are rated MS-70. (But it’s common for new and modern bullion coins to be graded ms-70.)
Anyone can easily see the wear on low-end coins, but accurately determining whether a coin is an f-12 or a vf-20 requires coin grading experience. Differentiating between an AU-55 coin and an MS-60 requires even more skill. Ultimately, grading a coin MS-62 or MS-63 becomes subjective, and “experts” often disagree. Consequently, rating services have become invaluable to investors.
pcgs, ngc and slabbed coins
By the mid-1980s, over-grading had become widespread. it was common for coins in circulation (below ms-60) to be put into plastic holders (“on slabs”), labeled ms-62 or ms-63, and sold to unsuspecting investors.
Because buyers typically couldn’t detect overqualification, they didn’t know they had been taken advantage of until they sold. An investor in the late 1980s invested $150,000 in old US dollars. gold coins, many of which had been graded ms-62 or ms-63 by the company he bought them from. three years later, at the suggestion of cmigs, he sent them to pcgs and learned that most of the coins had been overrated by up to five degrees.
Your $150,000 investment was worth less than $35,000. Unfortunately, this investor’s situation was not unique. it seems that thousands of investors have suffered similar losses.
ethical numismatists denounced the excessive grading and shouted that it was hurting coin collecting and it was. Then the Professional Coin Grading Service (PCGS) launched a unique concept in 1986. PCGS would only grade coins. the company would not sell coins. your income would be derived only from qualifying fees and you would survive only if you did credible work.
There are many qualified numismatists across the country, and while most of them don’t always agree with pcgs’ rating, pcgs thrives because their rating is fair and competent. pcgs now rates 100,000 to 150,000 coins per month.
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In 1986, the Numismatic Guarantee Corporation (NGC) emerged to provide another classification service. And, NGC has thrived, also sorting thousands of coins on a monthly basis. PCGS and NGC have been so successful that none of the major retail companies now “slabe” their own coins. (Placing a coin in a plastic holder with its grade marked on the holder is called “slabbing”). other rating services have tried to emulate pcgs and ngc, but none have been as widely accepted as pcgs and ngc.
pcgs and ngc’s coin grading services provide a much-needed benefit to investors buying double-headed eagles. now, investors can buy coins that are likely to be accurately rated. Although coin grading has definite guidelines, coin grading is still as subjective as a beauty pageant. One coin may be MS-62 rolled, and two knowledgeable numismatists, both with more experience than PCGs or NGC graders may disagree. one may say it’s an ms-61, while the other says it’s an ms-63!
Just because a coin is marked does not mean that its rating is final. Many coin dealers resubmit coins, asking for a higher rating. often they do. other coin dealers frequently take the coins out of their holders and reship them. coin grading is that subjective.
in fact, laminated coins are exchanged “on sight” and “on sight”. sight seen means that buyers have to see the coins and agree to the grading before paying. invisible means that buyers will take the coins without seeing them.
A veteran numismatist states that “a coin’s unique appearance, gloss, tone, strike depth or quirks can affect bids by up to 100% in rare cases.” Single coins are generally traded “on sight”, while Common Date MS-61, MS-62 and MS-63 are traded “on sight”. It takes a great deal of knowledge to trade profitably in the old United States. gold coins.
gold investors should avoid old US coins. gold coins and numismatic market. numismatics (coin collecting) is a world of its own. Many pitfalls await novice investors, the worst of which is overvalued currencies from unprincipled traders. Although overrated coins ceased to be a problem after PCGs and NGC began attacking coins, overvalued coins remain a major danger to gold coin buyers. in addition, liquidity can be a major issue.
The veteran numismatist mentioned above recommends “allowing at least 30 days for a dealer to sell their rare coins.” he says that “sudden emergency liquidation can reduce your realized price by 5% to 20%”. that’s a generous assessment of the numismatic market. if they sell you overvalued coins, you can see 50% of your investment disappear, no matter how long you give the dealer. Plus, do you really want to put a chunk of your life savings into something that may take 30 days to clear? What if it takes 60 days or 120?
Also consider another piece of advice offered by the numismatist above on “how to sell your coins at top prices”: find a dealer you can trust
okay, but how do you find that honest dealer? How many corrupt dealers do you go through to find it? How much does he lose on bad purchases before connecting with an honest dealer?
Why not invest in gold you can trust, gold that moves dollar for dollar with the world price of gold? why not buy gold bullion coins that can be liquidated at prices that anyone can determine? why not put your money in gold coins that make you the “expert” on how much they are worth?
here’s another tip from the numismatist:
always have your current expert take offers from the dealer who originally sold you the coins. different distributors support different markets.
This advice exposes two more flaws of investing in numismatic coins. first, your “current expert” has to go back to your previous “expert”. why don’t you keep dealing with the original expert? again, how many “experts” do you have to go through before you find that honest dealer?
Secondly, you should never invest in a currency whose value is determined by the support of a particular dealer or marketing organization. these companies move from currency to currency, always wanting to have “something new” to offer their customers. when they advance, previously promoted coins suffer. avoid this problem by investing in bullion coins.
This web page is long and you should be congratulated for reading this far. your time has been well spent. What you’ve learned could save you thousands of dollars and a huge headache.
The unfortunate story told above about the man who invested $150,000 but received $35,000 worth of coins is not unique. A few years ago, a husband and wife had cmigs evaluate a group of MS-62 double-headed eagles “on slabs” of common date. they had paid $72,000 for the coins. sadly, they shouldn’t have paid more than $48,000. at the time they wrote their check they suffered an immediate loss of $24,000, a third of their investment.
In early 1998, another investor who only wanted to invest in gold called a company that advertised golden eagles extensively. However, after being told numismatic coins were “not confiscable,” he put up $27,000 worth of assorted old US coins. uu. ms-62 to ms-65 grade gold coins. he subsequently learned that the coins could be sold for only around $21,000. the man suffered an immediate loss of $6,000 or 22%.
Such losses can be avoided by investing in bullion coins or buying double-headed eagles only when they are selling at small premiums. don’t take unnecessary risks with your money.
buy double-headed eagles at low premiums
although cmi gold & silver inc believes that bullion coins are more suitable for most investors, we recognize that some investors prefer double-headed eagles. If you’d like to discuss investing in Double Eagles, call us at 800-528-1380. We take calls from 7:00 a.m. to 5:00 p.m. m. to 5:00 p.m. m., Monday through Friday.
It’s rare that we don’t have the lowest priced double eagles in the industry. Check out our gold specials page for even lower prices on American double eagles.