The numismatics – similarly to artworks and painting – has been a popular field for collection for centuries. The appreciation of old and new coins in recent years is mainly due to the increase of the price of gold – the uncertainty characteristic nowadays for the other forms of investment has led to a rise of the price of the precious metals. The bourgeois feeling towards life characteristic for the period between the two World Wars has become popular again: no harm if a little gold is reserved.
The gold coin as investment
In a numismatic approach we can talk about two different gold coins:
investment gold coins
gold coins of numismatic value
The European Commission publishes annually an official list of gold coins with denominations which must be treated as investment gold coins in all EU Member States. All the countries decide about the inclusion in or cancellation of the list of their national coins in their own scope of authority (with the participation of experts under strict professional criteria). The sale of the officially adopted EU-listed coins is exempt from VAT.
Click here to view the current list:
Among the Hungarian coins the last time the so called St. Stephen’s Admonitions of a value of HUF 500 000 coin was included in the EU-list.
The price trend of the investment gold coins is completely adjusted to the stock market gold prices. It is well-known that in recent years a drastic increase of the price of gold has been experienced: during nine years the world market price of the precious metals has increased more than four-fold. It can be predicted that the high rise of the gold price that was considered to be a stable investment in the previous decades will continue – this is due to, among other things that the gold production cannot keep up with the sudden increase of interest in gold. The price thus formed is stable the “restoration” can be excluded – even the price level of the 2006 and 2007 years cannot return. In a few months period we can count on some fluctuation: the roughly 10-20 percent positive or negative stock price changes can be considered as general. We can calculate with a stable or rising rate in semi-annual or annual cycles.
The price increase of the so called gold coins of numismatic value – not qualified as investment gold – is not so predictable. There are very many aspects we have to pay attention to if we should like to invest in gold coins of numismatic value. According to the experience of the past 20 years the price of the coin is affected first of all by the maintenance stage (the condition of the coins is graded with a multi-level scale). The most superior range of gold coins proves to be a stable and improving value investment. In case of numismatic investments we must expect potential breaks in 3-5 years, sometimes minor setbacks. In the long term we can clearly calculate growth.
In numismatics a price explosion can be experienced remarkably in the case of gold coins among others due to the termination of the Eastern European socialist regimes. The new markets have resulted in a multiple price increase, not only in Eastern but also Western Europe. Due to the countries joining in trade the coin prices have increased multiply – especially the current transboundary historic coins, such as in the case of the Austro-Hungarian Empire gold coins; in the Russian numismatics in the recent years an approximately ten-fold increase in prices can be experienced.
Concerning the investment gold essentially we count on the stock exchange prices. The price evolution of the non-investment gold coins of numismatic value can be followed on the portals of the summery of international coin auctions: http://www.coinarchives.com és http://www.mcsearch.info/, as well as the major Western European companies’ website, such as that of the Fritz Rudolf Künker GmbH & Co or the Auktionen Meister & Sonntag. Concerning the Hungarian moneys the Procopius Numizmatika and the Nudelman Numismatica has an outstanding significance in market terms (on the website of that latter one a recent retrospective coin referential database is located going back to the year 2005, about the evolution of the auctions prices of Hungarian coins).
The advantages of buying gold coins as an investment
It applies to both the numismatic collections and the investment gold coins that they fit into a little space, easy to be closed, stored and sold.
The investment gold coins can be classified as an excellent investment even for a small time span – virtually risk-free – can be mobilized for cash within the shortest time (compared to the other branches of art collection).
It is recommended to fix the numismatic type investments for a longer-term, as in a long-term perspective the impairment is virtually impossible on this area too.
What are the hidden risks of the purchase of gold coins? What to look when buying gold coins?
There is almost only one risk of buying gold coins: the counterfeits.
However the relatively well-filterable copies – as usual – using the developing techniques are one small step ahead of the profession. Therefore it is worthy to buy from a qualified, reliable trader who gives guarantee as well. Even the best professionals can be fooled sometimes with fresh, well done fakes. Over a time it can happen that a coin proves to be a perfect copy – in cases like that we can validate our interest only with a guarantee invoice.
Practical tips to buy investment gold coins
László Nudelman, the owner of the C.I.P. Invest Ltd., the only Hungarian member of the International Association of Professional Numismatists (IAPN), a major player in the Hungarian numismatic life for nearly half a century claims – one of the main bases of the gold coin investment of stable value is trust. As a beginner collector we should gather information and select that collection or investment area which is the nearest to us, we should find those few professionals to whom we can turn with confidence. The significant judgement and taste differences characteristic for the art work collection are valid for numismatics as well therefore we should not rely on too many “experts”.
It is not a disadvantage if our seller is able to make out an invoice. We should avoid the purchases at coin exchanges, bazaars, the so called Verkaufslicht – at the poor lamp light we cannot see or judge as a milder case a pound mischief, which can have a fatal influence on our coin pricing.
For buying non-investment numismatic gold coins the safest are the auctions. The possibility of error is decreased to minimum in the case of the items which can be viewed again, verifiable, photographed and widely published.
If we buy coins at auctions it is guaranteed that we become enriched by timeless and growing investment.