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Chasing Perfection – Collecting Gold Bullion Coins

Chasing Perfection - Collecting Gold Bullion Coins
Here is a superb example of a 2006 one troy ounce U.S. Gold Buffalo coin.  Although not traditionally considered collectors’ pieces, modern gold bullion coins that possess strong designs and low mintages will inevitably become favorites of the numismatic community.

Perfection is a something that most of us have chased at one time or another.  Unfortunately, perfection is a notoriously fickle thing.  Almost everything in the world has its quirks or flaws.  Regardless of how great your mobile phone might have seemed at the wireless dealer, once you’ve used it for a month, you know its shortcomings.  Likewise, your late-model car may look great from a distance, but get up close and the ugly little scratches and dents become all too visible.  Even our interpersonal relationships have their warts, rarely achieving the ideals that we initially envision for them.

However, there is one thing in life where perfection isn’t just possible, but is practically mandatory – gold bullion coins.  These paragons of tangible wealth nearly transcend the material world in their quest for absolute perfection.  Struck by the most well-respected government mints from around the world, these internationally recognized bullion pieces are minted from the very purest gold, using the very latest industrial processes.  Free from even the smallest of blemishes, gold bullion coins embody the ideal of physical perfection.  In a world of digital crypto-currencies and virtual offshore accounts, gold bullion coins are pristine, physical treasure that you can hold in the palm of your hand.

Collecting gold bullion coins offers the aspiring numismatic connoisseur a lot of advantages over collecting older coins.  First, bullion coins are made out of gold, giving them an immediate cachet that more pedestrian coinage lacks.  And these masterpieces in gold are also usually struck in a variety of sizes to accommodate every budget.  Governments mint everything from small, but affordable 1/20 troy ounce gold bullion coins right up to impressively hefty one troy ounce examples.

Another overlooked benefit of gold bullion coins is that there are rarely any key or rare dates.  This puts a complete collection of most bullion series within the reach of the average collector.  This contrasts markedly with traditional coin collecting, where ultra-expensive key dates often render complete sets unrealistic.

Finally, the monetary risk of collecting gold bullion coins is generally quite limited because most of what you are paying for is bullion value.  Under normal circumstances, high quality, collector-oriented gold bullion coins with substantial numismatic potential can be purchased for a modest 5% to 25% over spot.  Even for very rare pieces, the premiums are rarely more than 50% over spot.

The Mexican Libertad is one of these great gold bullion coin bargains.  In fact, I view it as the hidden investment sleeper of the gold bullion coin world.  Struck intermittently from 1981 until the present, gold Libertads come in one troy ounce, 1/2 ounce, 1/4 ounce, 1/10 ounce and 1/20 ounce sizes.  From 1981 until 1988 the Mexican gold Libertad series was struck in 0.900 fine gold, but starting in 1991 the composition was changed to pure 24 karat gold.

The gold Libertad obverse features Mexico City’s famous Angel of Independence statue in the foreground flanked by the volcanoes Popocatépetl and Iztaccihuatl in the background.  Mexico’s national emblem, a golden eagle tearing apart a rattlesnake while sitting atop a cactus, graces the reverse.  Libertad gold coins underwent a redesign in the year 2000.  Although the major design elements were not changed, they were updated to a more modern aesthetic.

The Mexican Libertad is one of the lowest mintage regular issue gold bullion coins available in the market today.  Excluding the first year of production, when mintages were significantly higher, the one troy ounce Libertad gold bullion coin has averaged less than 15,000 specimens per annum.  As shockingly low as this number might seem, the mintages on the gold Libertad fractional coins are even lower.  Gold Libertad proofs have the lowest mintages at all, with numbers struggling to reach the four-figure mark in many cases.

 

Mexican Libertad Gold Bullion Coins for Sale on eBay

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The Australian Gold Nugget/Kangaroo is another great bullion series for the aspiring collector or investor.  First minted in 1986, the Nugget/Kangaroo features a portrait of Queen Elizabeth II on the obverse.  The reverse featured famous Australian gold nuggets for the first three years of production before switching over to kangaroos, hence the reason the series is commonly called the Nugget/Kangaroo.  As an added incentive for investors, the kangaroo design on the reserve is altered every year to increase collector interest.

Minted in pure gold, the Australian Gold Nugget/Kangaroo has been struck in sizes ranging from the monstrous 1 kilogram (32.15 troy ounces) coin to the diminutive 1/20 of a troy ounce (1.56 grams) coin.  Mintages have generally been modest, with the 1 troy ounce gold Nugget/Kangaroo averaging only 152,000 specimens every year from 1986 to 2016.  The maximum mintage was 2013 when just over 341,000 examples were coined.

China’s entry in the global gold bullion coin competition, the Chinese Panda, was first issued in 1982.  Struck from 99.9% pure gold, Chinese Panda coins feature Beijing’s famed 15th century Taoist Temple of Heaven on the front.  The back has a depiction of a Chinese giant panda in a natural setting that is redesigned every year.

From the series’ inception in 1982 until 2015, Pandas were struck in 1 troy ounce, 1/2 ounce, 1/4 ounce, 1/10 ounce and 1/20 ounce sizes.  However, starting in 2016, the Chinese authorities decided to embrace the metric system.  As a result, more recent Chinese gold Panda coins have been issued in 30 gram, 15 gram, 8 gram, 3 gram and 1 gram sizes.

 

Australian Kangaroo/Nugget Gold Bullion Coins for Sale on eBay

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Chinese Pandas are some of the most popular modern gold bullion coins with collectors due to their attractive designs and quintessentially Chinese cultural themes.  In addition, mintages have been very limited for a bullion issue, with 1 troy ounce pieces averaging an annual mintage of less than 60,000 annually from 1982 through 2006.  Due to their perennial popularity, the Chinese government increased mintage numbers modestly starting in 2007.

The final gold bullion coin I want to showcase is the American Buffalo.  These .9999 fine pure gold coins feature an adaptation of the acclaimed U.S. Buffalo Nickel, which was originally minted between 1913 and 1938.  The U.S. Buffalo gold coin has original artist James Earle Fraser’s iconic Indian head bust on the obverse and his powerful rendition of a wild bison on the reverse.

Unlike most other gold bullion series, the U.S. Gold Buffalo is a relative newcomer, having only premiered in 2006.  American Gold Buffaloes are also the first coins the U.S. mint ever struck from pure, unalloyed gold.  With the exception of 2008, when 1/2, 1/4 and 1/10 ounce pieces were also struck, the mint has made the curious decision to issue the coins in only one denomination – the one troy ounce size.

Mintages for U.S. Gold Buffaloes are surprisingly low for a popular U.S. bullion series.  Except for the first year of issue, 2006, one troy ounce pieces have averaged just over 225,000 minted every year.  These mintages include both uncirculated bullion coins and proof collector coins.  These numbers are exceptionally low compared to its counterpart program, the American Gold Eagle bullion series, which has averaged over 600,000 one troy ounce coins per year.

 

U.S. Buffalo Gold Bullion Coins for Sale on eBay

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For those collectors who are looking for even more exclusive gold bullion coins, the U.S. mint recently released a set of three very special issues.  These bullion pieces borrow iconic U.S. coin designs from the early 20th century – the Mercury dime, Standing Liberty quarter and Walking Liberty half dollar – beautifully rendered in pure 24 karat gold.  These three classic American coins were faithfully updated and released in 2016 on the 100th anniversary of their original issue in 1916.

The 2016 U.S. Walking Liberty Centennial gold half dollar weighs a full 1/2 troy ounce of .9999 fine gold and measures 1.063 inches (27.00 mm) in diameter.  The front of the coin depicts Liberty confidently striding forward while the sun rises majestically behind her on the horizon.  The reverse of the Walking Liberty Centennial gold piece features an American bald eagle nobly perched on a rocky outcropping.  The original Walking Liberty half dollar design was so well loved that it was also adopted for the obverse design for the ubiquitous American Silver Eagle bullion coin.

The 2016 U.S. Standing Liberty Centennial gold quarter weighs 1/4 of a troy ounce of pure gold and has a diameter of 0.866 inches (22.00 mm).  The obverse shows the personification of Liberty standing serenely with a shield in her left hand and an olive branch in her right hand.  The reverse depicts an eagle in flight with its wings outstretched.

The 2016 U.S. Mercury Dime Centennial gold coin is struck from 1/10 of a troy ounce of 24 karat gold and is heavier than the original silver Mercury dime.  The gold Mercury dime measures 0.650 inches (16.50 mm) in diameter.  The front shows the head of winged Liberty, which is often identified with the ancient Roman god Mercury, while the reverse features a Roman fasces entwined with an olive branch.

 

2016 U.S. Gold Walking Liberty Half Dollars for Sale on eBay

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These three gold centennial issues have extremely limited mintages: 125,000 pieces for the dime, 100,000 for the quarter and only 70,000 for the half dollar.  These coins are also notable because their original silver analogs often suffered from weak strikes due to the complexity of their designs.  This is an oversight that the United States mint was finally able to rectify with modern minting technology, giving collectors the opportunity to own some truly iconic gold coins in stunningly pristine condition.

However, in my opinion, the ultimate gold bullion coin for the truly discerning collector is the 2009 Ultra High Relief Double Eagle.  The name is quite a mouthful, but this coin is worthy of its weighty title.  It is a one troy ounce bullion piece struck from pure 24 karat, .9999 fine gold.  But any similarity with lesser bullion coins promptly ends there.  In order to understand why the 2009 Ultra High Relief Double Eagle is so special, you need to first know the history behind this unique piece of numismatic Americana.

In the early 20th century, President Theodore Roosevelt wanted to give the burgeoning American nation a coinage to rival that of the ancient Greeks.  Ancient Greek coinage has been renowned through the millennia for its incomparable beauty, in particular its high relief designs.  High relief is when a coin’s devices (designs) are substantially raised above its flat background, or field, giving an impressive, almost sculptural effect.

President Roosevelt commissioned renowned artist Augustus Saint-Gaudens to create new dies for the U.S. double eagle, or $20 gold piece.  Saint-Gaudens then designed the legendary St. Gaudens double eagle, which has been copied and adapted many times over the years.  It features a robed lady Liberty boldly moving forward while holding a torch in her right hand and an olive branch in her left hand.  The reverse portrays a noble American eagle soaring over a brilliant sunrise.

However, when Saint-Gaudens tried to have these magnificent new coins struck at the mint he ran into technical problems.  The design was rendered in such high relief that the minting technology of the time was not up to the task of fully striking the coins.  Consequently, the dies had to be redesigned in lower relief in order to accommodate the minting technology available.

Only 11,250 high relief double eagles were struck in 1907 for circulation before the dies were changed.  These special high relief gold coins are especially coveted by knowledgeable U.S. coin collectors.  In perennially high demand, prices generally start in the low five-figures for worn examples and rapidly escalate for nicer specimens.

In 2009, the U.S. Mint decided to finally right this historical wrong.  Its Director, Ed Moy, resurrected the original high relief St. Gaudens double eagle design and adapted it into a limited edition, one troy ounce gold bullion coin.  Except this time, the mint would make sure it would be fully struck in gloriously high relief as sculptor Augustus Saint-Gaudens originally intended.

Saint-Gauden’s original plaster dies were pulled out of their hundred year storage at the U.S. Mint and digitally scanned.  With the resulting digital design, the die was updated with the year, 2009, and the motto “In God We Trust”, which was not present on the original 1907 version.  In addition, four stars were added to the existing 46 stars around the rim of the obverse to reflect the additional four states that had joined the Union since 1907.

And with that, a masterpiece was born.  The 2009 Ultra High Relief Double Eagle measures 1.0630 inches (27.00) mm across and an unbelievable 0.1575 inches (4.00 mm) in thickness.  These impressive gold bullion coins have been meticulously struck in the highest relief and to the most exacting standards.  In fact, the standards were so exacting that it took a century before the technology was developed to make them a reality.  And, of course, the mintage for this one year type is low, with only 115,178 pieces in existence.

 

2009 U.S. Gold Ultra High Relief Double Eagles for Sale on eBay

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Nearly all of the gold bullion coins I’ve presented here are pure, 24 karat gold.  While that is partially coincidence, there is also a solid financial reason to recommend it: attrition.  Because pure gold is very soft, circulating gold coins have traditionally been alloyed with a small amount of other metals (primarily copper and silver) in order to harden and toughen the gold.  However, gold bullion coins are not intended for circulation and can, therefore, be made from pure gold.

But as a result, 24 karat gold bullion coins frequently acquire scuffs, scrapes, rim bumps or other minor damage if they are mishandled.  This doesn’t impair their value as bullion pieces, but it does render them unacceptable to serious coin collectors.  So the already small populations of the collectible gold bullion coins listed above will inevitably be whittled down further over time via carelessness and accidents.  The remaining pristine coins will, predictably, appreciate in value as they become rarer.

There are a host of other very popular gold bullion coins that I have not mentioned. These include American Gold Eagles, Canadian Maple Leafs, British Britannias, Austrian Philharmonics and South African Krugerrands.  I want to make it clear that while these coins certainly have some collectible attributes, it is unlikely they will ever be as desirable as the gold bullion coins specifically highlighted in this article.

Mintage plays a significant role here.  The Mexican Libertad, Australian Nugget/Kangaroo, Chinese Panda and U.S. Buffalo series have never had a mintage higher than one million pieces in any year through 2016.  However, American Gold Eagle and Canadian Maple Leaf mintages have commonly exceeded this amount.  Since 2013, British Britannias have only been limited in supply by the number of coins the market will absorb in any given year.  South African Krugerrands, one of the only gold bullion coins available in the 1960s and 1970s, were struck by the tens of millions during that period.  High mintages for gold bullion coin series are not conducive to future numismatic price appreciation and should be avoided.

Another factor that makes certain gold bullion coins more collectible than others is design.  Modern coins, particularly commemorative coins, have been notorious for decades for the overall poor quality of their designs.  The specific bullion issues discussed in this article buck the trend, making truly aesthetically pleasing designs available to the collecting community.

In contrast, many lesser gold bullion coins wallow in their own stylistic mediocrity, content to be thoroughly uninspiring, albeit utilitarian.  There are degrees of nuance here, of course.  Canadian Maple Leafs and American Gold Eagles both have reasonably pleasing, although not exceptional, design, but are rendered less desirable by their high mintages.  Specially struck  proof and burnished uncirculated American Gold Eagle issues are special exceptions, as they have very low annual mintages of tens of thousands or fewer.

In any case, it is important to collect what you like.  But if numismatically-oriented investment return is important to you, then low mintage figures coupled with compelling design is a must.  While larger 1 troy ounce gold bullion coins should theoretically be more desirable than smaller examples, this size advantage may be offset by the lower mintages and better affordability that fractional issues enjoy.

Condition, as always, is also a key factor.  Because modern gold bullion coins are manufactured to such high standards, imperfections that would normally be acceptable on older collector coins are absolutely forbidden here.  Examples include scratches, nicks, scrapes or any other damage visible without magnification.  Modern gold bullion coins are one of the few collecting areas where absolute perfection is almost a necessity.

 

Gold Bullion Coin Sets for Sale on eBay

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Prices for gold bullion coins usually track the spot price of gold fairly closely.  Common date one troy ounce U.S. Gold Buffaloes and Australian Nugget/Kangaroos sell for relatively small marks ups of about 5% to 10% over bullion value.  Expect to pay a bit more for one ounce Chinese Pandas and Mexican Libertads.  The premiums on these bullion pieces can range from about 8% on the low end to well over 100% for some of the rare Chinese Pandas.

The 2016 U.S. Centennial gold coins also command substantial premiums over their bullion value.  Currently, the alluring U.S. Walking Liberty gold half dollar trades with a premium that is about 40% over spot.  The gold Standing Liberty quarter and Mercury dime both have higher premiums than this.  But these elevated premiums are to be expected, as smaller gold bullion coins usually have higher premiums than their larger counterparts.

The outstanding 2009 Ultra High Relief Double Eagle sports a hefty 50% premium right now.  However, its premium has been even higher in the recent past.  Honestly, a 50% premium over spot seems pretty tame to me for the ultimate gold bullion coin, but you can make your own assessment.

It is the height of irony that we live in an age when the world’s central banks pursue rampant inflationism while their national mints simultaneously strike tremendously beautiful and profoundly collectible gold bullion coins.  Consider it a sign of the times, a reflection of the developed world’s monetary cognitive dissonance. Whatever its cause, don’t let this opportunity slip by you.  Gold bullion coins currently offer one of the lowest risk investment options for the savvy coin collector or shrewd tangible asset investor.

 

Read more in-depth Antique Sage bullion & gemstone investment guides here.

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Read more in-depth Antique Sage rare coin investment guides here.


Samurai Money – Japanese Gold Coins of the Tokugawa Shogunate

Samurai Money - Japanese Gold Coins of the Tokugawa Shogunate
Here is a fine example of a nishu-kin (2 shu) gold coin minted during the Japanese Tokugawa shogunate between 1832 and 1858.  The pale gold color is due to the fact that this coin, like most Japanese gold coins of the period, was minted from a gold-silver alloy known as electrum.  Tokugawa era Japanese gold coins are often called “samurai money” as an ode to their feudal origins.

We live in a fake world.  We are surrounded by fake wood, fake leather and even fake breasts.  A world overrun by imitations isn’t a particularly new phenomenon either.  Even the ancient Romans were deceived by unscrupulous merchants who peddled brass as gold to the unwary.  The counterfeit has been with us for a very, very long time.

In modern times, ingenious humans have found innumerable ways to imitate the finer (and by implication more expensive) things in life.  But these unconvincing copies are pale facsimiles – mere shadows – of the real article.  Those who understand these subtleties also know that genuine items of great beauty and real value are still available for those willing to take the time to look.

Feudal-era Japanese gold coins are one interesting possibility.  Minted from the early 17th century until just after the fall of the Tokugawa shogunate in 1869, these distinctly Asian coins reflect the rich samurai culture of feudal Japan.  Feudal Japanese gold coins are remnants of a time when Japan was still largely agrarian, feudal and isolated.  At this point in its history, Japan was ruled by traditional samurai lords who had cultivated their warrior philosophy for more than a millennium.

The monetary system of Tokugawa era Japan consisted of a disorganized mish-mash of bronze, silver, electrum (an alloy of gold and silver) and gold coins issued in a wide variety of shapes and sizes.  Theoretically, 16 shu equaled 4 bu, which also equaled 1 ryo.  But, in reality, coins traded by weight as bullion pieces.  Shu denominations, the smallest of the three, were often, but not always, minted in silver.  Bu coins were either silver or gold.  Larger denomination ryo coins were exclusively gold.

The Japanese word for silver is “gin” and their word for gold is “kin”.  Therefore, a one bu silver coin would be called an ichibu gin, which translates as “one-bu silver”.  Likewise, a similar one bu coin in gold would be called an ichibu kin, or “one-bu gold”.  Most Tokugawa period Japanese gold coins available in the market today are smaller one (ichi) or two (ni) shu or bu denominations.  These coins are called isshu-kin (one-shu gold), nishu-kin (two-shu gold), ichibu-kin (one-bu gold) and nibu-kin (two-bu gold), respectively.

These smaller shu and bu Japanese gold coins from the Tokugawa shogunate have an unusual rectangular shape surrounded by finely beaded borders that is reminiscent of a miniature bar or ingot.  Covered in exotic Japanese calligraphy and stylized paulownia flowers, shu and bu gold coins unequivocally exude the style of traditional samurai Japan.  The warm, soft glow of their electrum alloy accentuates the intricate details of the pieces, giving them a compellingly tactile sensibility.

 

Tokugawa Shogunate Shu Japanese Gold Coins for Sale on eBay

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Due to their high purchasing power, most Japanese gold coins only received light wear.  Instead, everyday purchases in Tokugawa era Japan were made using lower value copper or silver coinage.  Gold coins were generally hoarded by those lucky enough to acquire them.

For over 250 years, from 1600 to 1868, warlords known as the Tokugawa shogunate ruled over a Japan divided into fiefdoms, each controlled by a local daimyo, or samurai lord.  But this traditional feudal structure began to deteriorate in the face of external threats.  After maintaining strict international isolation for over 200 years, Japan finally opened to foreign influence and trade when U.S. Commodore Matthew Perry’s infamous “Black Ships” entered Edo (Tokyo) Bay in 1853.  Japan then spent the next two decades immersed in a complex crosscurrent of radical new ideas and intense political turmoil known as the Bakamatsu period.

The old ways were changing.  A progressive faction that wished to modernize the island nation struggled against reactionary samurai forces that wanted to isolate the country again.  These conservative samurai elevated the Japanese emperor, who had previously been a figurehead, to an almost mythical status while rallying around the slogan, “Revere the emperor, expel the barbarians (foreigners).”

Ultimately, this internal conflict undermined the rotting, ineffective Tokugawa shogunate, leading to its collapse in 1868.  This ushered in the Meiji era, a time of rapid modernization and industrialization in Japan.  Feudal Japan and the samurai warriors who ruled over it were irrevocably lost to the mists of time.

The Tokugawa shogunate, like many governments throughout history, had an overspending problem.  Maintaining the excessively lavish lifestyle of the shogun and supporting his numerous retainers required more money than the government could easily collect via taxes.  It also didn’t help that most peasant farmers paid their taxes in the form of rice instead of money.  Consequently, the Tokugawa regime almost continuously debased the currency during its lengthy reign.

Japanese gold coins from the early Tokugawa shogunate started the 17th century with a fairly high purity of over 84% fine.  By the mid 19th century some of these Tokugawa shogunate gold coins had fallen to just over 12% fine gold.  Debasement didn’t occur in a strictly chronologically linear manner however; the purity of feudal Japanese gold coins varied widely, depending on the denomination and era struck.  The shogunate diluted their gold coins with silver instead of a baser metal like copper, leading to the many electrum (gold-silver) issues of the late Tokugawa era.

 

Tokugawa Shogunate Bu Japanese Gold Coins for Sale on eBay

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The nishu-kin (2 shu) gold coins most commonly found for sale today were minted between 1832 and 1858, in the Tenpo era.  They are composed of 30% gold and 70% silver and measure approximately 13 mm (0.51 inches) long by 7 mm (0.28 inches) wide.  They weigh about 1.62 grams (0.052 troy ounces) each.  These small, intriguing coins are “samurai money” in the truest sense of the term.

Their larger nibu-kin (2 bu) cousins have four times the nominal face value of the smaller nishu-kin coins, but are otherwise quite similar.  The nibu-kin type most frequently seen on the market today was produced during the upheaval of the very early Meiji era in 1868 and 1869.  These Japanese gold coins circulated in the tumultuous period of rapid change immediately following the disintegration of the Tokugawa shogunate.

These late shogunate nibu-kin coins are composed of 22% gold and 78% silver and measure 19 mm (0.75 inches) long by 11 mm (0.43 inches) wide.  They weigh around 3.00 grams (0.096 troy ounces) each and were the last Japanese coins made in the old, bar style.  All later coins of the Meiji era were minted in the Western, machine-struck, round style that is familiar to us today.

For those looking for the ultimate in samurai money, larger denomination gold coins were also produced: the koban (1 ryo), goryoban (5 ryo) and oban (10 ryo) denominations.  These impressively large coins circulated exclusively as bullion pieces, trading by weight.  The massive goryoban and oban coins are extremely rare and can command astronomical prices (up to several tens of thousands of dollars each) when they do come to market.  The smaller koban pieces are more common, though still scarce and highly desirable.

These large, Tokugawa-era Japanese gold coins are oval in shape, with flowing script and artistic flower seals against a background of horizontal grooves or crenulations.  The reverse is blank except for scattered hallmark stamps and sometimes an era indicator.  Few gold coins are as profoundly attractive as these masterpieces of the feudal Japanese coiner’s art.  As a result, they are in perpetually high demand with prices to match.

Regardless of the creeping infiltration of the pseudo into the modern world there is one thing that is certain – Japanese gold coins of the Tokugawa shogunate are as genuine – as real – as it gets.  As with most coins, the price of these cultural treasures is dependent on condition, rarity and the era minted.  It is recommended that that investors look for specimens that are damage-free and possess good eye appeal.

The more common nishu-kin (2 shu) and nibu-kin (2 bu) examples from the 19th century generally trade in the $50 to $300 range per coin, while koban typically start above $600.  Prices quickly escalate for scarcer pieces from the 18th century or earlier, especially kobans and other large denominations.  For investment purposes, acquiring more common examples in Very Fine or better in condition would be advisable.  Fine condition or better is acceptable for larger denominations or scarcer specimens.  Condition becomes a secondary consideration for extremely rare pieces, assuming they can be found at all.

The Tokugawa shogunate was a simpler time of noble samurai, elegant geisha and rough peasant farmers that succumbed to the encroachment of the modern era.  Feudal Japanese gold coins represent a satisfying and captivating way to acquire a physical link to this near mythical period in Japanese history.  In a world where so much is so artificial, a collection of gold “samurai money” possesses an allure that is difficult to deny.

 

Read more in-depth Antique Sage rare coin investment guides here.

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Read more in-depth Antique Sage Japanese antiques investment guides here.


Arabian Delight – Medieval Gold Dinars of the Islamic Caliphates

Arabian Delight - Medieval Gold Dinars of the Islamic Caliphates
Pictured is a fine example of the iconic “bullseye” type Islamic medieval gold dinars struck by the Egyptian Fatimid dynasty during the 10th and 11th centuries AD.  Fatimid Egypt was quite wealthy due to its strategic position on the busy trade routes between India and Europe.

Our daily lives can be monotonous affairs.  We drag ourselves out of bed every morning, suffer a punishing commute, grind it out at work all day and then trudge home.  Then we are expected to repeat this routine daily for the next 40 years straight.  One possible way to avert this disagreeable lifestyle is to become a connoisseur of the fine arts.  Pursing such a rewarding avocation allows the aspiring art aficionado to experience splendidly fascinating items in his daily life.

And there are few kinds of art more alluring, exotic and accessible than the medieval gold dinar coins of the early Islamic caliphates.  They are glittering pieces of the distant past – tangible reminders of a bygone era of shimmering oases, ancient cities and dazzling palaces in faraway lands.

Unlike Europe, which fell into the Dark Ages after the collapse of the Western Roman Empire, Islam experienced a centuries long cultural flowering.  The Islamic golden age spanned from circa 650 AD to 1258 AD, when Baghdad was sacked by the Mongols.  This enlightened period featured religious toleration as well as significant advances in the fields of philosophy, science, mathematics and medicine.

A major intellectual center for the Islamic world called the House of Wisdom was founded in Baghdad during this time.  Muslims also established the world’s first degree granting universities in the 9th and 10th centuries.  Countless ancient Greek and Roman texts were translated into Arabic during Islam’s golden age, preserving the priceless knowledge of those classical civilizations.  Muslim mathematicians developed advanced maths such as algebra and algorithms.  Innovative Muslim chemists of the 8th century even invented the distillation process that made hard liquors possible!

The Islamic dinar, a nearly pure gold coin of about 4 grams, was a high denomination piece widely used in medieval international trade.  Europe, in contrast to the Muslim world, was an impoverished backwater in this era, with little trade outside the Byzantine Empire.  As a consequence, almost none of the European nations struck gold coins during this time, with the exception of the Byzantines.

The early Islamic caliphates, on the other hand, were obscenely wealthy due to their extensive trade relations with sub-Saharan Africa, India and even China.   Because of this robust commerce, gold dinar coins of the early Islamic Caliphates had relatively high mintages and thus survived in reasonable quantities to the present.  In addition to the dinar, fractional gold coins were also sometimes struck in quarter and half units.

Islam has a general prohibition on displaying images in art – human or otherwise.  Most Islamic art is therefore non-representational in nature, instead consisting of intricate, geometric patterns or elaborate, ornamental calligraphy.  Consequently, the coinage of Muslim kingdoms was struck with highly stylized Arabic (or Persian) calligraphy on both sides.

This style of Islamic coinage was a distinctive break from the ancient Greek and Roman tradition of placing rulers, gods or animals on coins.  This resulted in a breathtakingly beautiful, as well as tantalizingly exotic Islamic-style coinage that was minted for hundreds of years across dozens of Muslim dynasties.

 

Medieval Gold Dinars of Minor Islamic Dynasties for Sale on eBay

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Muslims use their own unique dating system known as the Hijri calendar which is based on a lunar calendar of approximately 354 days.  This Islamic calendar commenced in the year 622 AD (on the Western calendar) when Muhammad and his followers fled from Mecca to Medina in the event known as the Hijra.  This event also gives the Hijri calendar its name.  The abbreviation for the Hijri calendar is “AH” and will oftentimes be found in date descriptions of Islamic coins put up for sale online or in dealer catalogues.

Islamic coins were some of the first coins to be struck with dates, something that didn’t regularly happen on European coinage for almost another 800 years.  Mint names are also often encountered on medieval Islamic coinage, allowing a collector to identify the city where a coin was struck.

The Umayyad Caliphate (661-750 AD) was the second great Islamic state after the death of the prophet Muhammad and controlled a massive territory, stretching from Spain in the west to Afghanistan in the east.  The ancient metropolis of Damascus was the Umayyad Caliphate’s capital city.  The first uniquely Islamic coinage, stylistically speaking, was minted starting in 696 AD during the reign of the 5th Umayyad Caliph, Abd al-Malik ibn Marwan.

During the Abbasid Caliphate (750-1258 AD), Islamic civilization reached the pinnacle of its golden age.  Extending from Tunisia in the west to Pakistan in the east, the Abbasid Caliphate’s capital was Baghdad.  The greatest ruler of the dynasty, Harun al-Rashid (reigned 786-809 AD), not only founded The House of Wisdom but also featured prominently in the classic Arabic literary work “One Thousand and One Nights”.  Gold dinar coins of the famous Harun al-Rashid were struck in substantial numbers and can frequently be found today at reasonable prices.

 

Abbasid Medieval Gold Dinars for Sale on eBay

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The Fatimid Caliphate (909-1171 AD) was a splinter dynasty from the Abbasid Caliphate that ruled from Morocco in the west to Syria in the east.  The Fatimid’s center of power was in Egypt.  This led them to found the city of Cairo specifically to be their capital.

Most gold dinar coins of the Fatimid Caliphate, although adhering to the canonical Muslim tradition of Arabic script on both sides, have a style of calligraphy that is readily identifiable as uniquely Egyptian.  The calligraphy of Fatimid coinage is often strongly reminiscent of ancient Egyptian hieroglyphics, even though it is in Kufic (medieval Arabic) script.  The iconic Fatimid “bullseye” type gold dinar coins are especially coveted by discerning collectors for their attractive appearance.

A desirable specimen of an early Islamic gold dinar should have modest wear; aim for a grade of Very Fine (VF) or better.  In addition, a crisp strike, good centering and fine style are all highly desirable.  Examples that have been bent, holed or excessively clipped should be avoided.

Clipping was an ancient form of fraud in which shears were use to shave off very thin strips of metal around the edge of the coin.  If done properly, the coin was almost imperceptibly smaller in diameter and could be easily passed back into circulation at full face value.  The coin clipper kept the metal shavings from the coin and eventually, after clipping many coins, would have pilfered a substantial amount of gold.

 

Fatimid Medieval Gold Dinars for Sale on eBay

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Coin collecting has been called “The Hobby of Kings” because it was once the exclusive domain of royalty and other wealthy nobles.  If coin collecting truly is the hobby of kings, then gold coins are surely its zenith.  Islamic medieval gold dinars are among the most advantageous ways to invest in the burgeoning Islamic art market.  Prices range from about $250 for common, but still desirable, pieces to well over $1,000 for pristine or rare examples.

Keep in mind that there are countless other Islamic dynasties beyond the three major caliphates that have been highlighted in this article.  Many of these smaller kingdoms also struck gold coins that are very collectible.  While gold coins from these minor dynasties are especially undervalued in today’s marketplace, all medieval gold dinars represent a beguiling, exotic gateway to the refined and profitable world of the hobby of kings.

 

Read more in-depth Antique Sage rare coin investment guides here.

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Read more in-depth Antique Sage medieval art investment guides here.


Redefining Rarity – Pattern, Trial, Essai & Piedfort Coins

Redefining Rarity - Pattern, Trial, Essai & Piedfort Coins
This is an attractive klippe (square or diamond-shaped), 1929 Hungarian silver 5 Pengo pattern coin in Proof condition.  It features Saint Ladislaus on the obverse, a chivalrous Hungarian king who ruled in the late 11th century AD.  The specimen is impressively large, weighing in at 50.3 grams (1.62 troy ounces) – almost double the weight of a U.S. silver dollar.  Technically, this coin is an official government restrike that was issued by the Hungarian Communist regime in the 1960s.  The total mintage was 1,084 pieces.

We live in an age of great abundance, a boon granted to us largely by the powers of mass production.  But our current era of plenty also has drawbacks.

You may be very proud of your shiny new iPhone, but it is hardly unique.  Tens of millions of iPhones are in use worldwide and hundreds of thousands more roll off the assembly line every day.  The same is true of your treasured BMW 3 series car; BMW typically churns out close to half a million units per year.  They may be very nice – even luxurious – products, but they certainly aren’t rare.

Rarity – true rarity – is an unusual and precious thing in today’s world of persistent industrial overcapacity.  This shortage of scarcity in modern society is a primary reason why ultra rare pattern, trial, essai and piedfort coins are so treasured by knowledgeable collectors and investors alike.

A pattern, also sometimes called a trial, is a coin struck by a national mint as a specimen for test purposes.  Patterns often have unique or experimental designs that are never adopted for mass circulation coinage.  This factor makes these unusual coins quite desirable to astute collectors.

Adding to their cachet is the fact that patterns generally have extremely limited production runs.  Mintages for a trial coin can run anywhere from a mere handful of pieces, or even just a single known example, to perhaps a few thousand at most.  This places patterns, as a class, among the rarest coins in existence.  As an added bonus, these little known numismatic masterpieces are often found in near pristine condition due to their non-circulating status.

Patterns are commonly struck in what is called “off metal”.  This is the practice of using a different metal to strike the pattern coin than the mint would typically employ for its circulating counterpart.  Every coinage metal under the sun can be found among pattern issues, including gold, silver, and all manner of aluminum, copper and nickel alloys, just to name a few.  There really are no firm rules when it comes to the metals used for pattern or trial coins.

 

Certified (Slabbed) World Pattern & French Essai Coins for Sale on eBay

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The history of pattern coins stretches back centuries, with many different nations having extensive catalogues of trial pieces from the 19th and 20th centuries.  The French, in particular, have a strong tradition of issuing scores of different varieties of patterns.  A French pattern coin is known as an “essai”, which is derived from the Latin “exagium”, meaning weighing.  This Latin word is also the root of the English word “assay”, meaning to test a metal for purity.

French essai pieces are invariably very attractive and of the highest quality.  Prices for investment grade foreign pattern coins generally range from around $250 to several thousand dollars per coin, depending on country of issue, condition, metal and other factors.

The United States has also issued a variety of trial coins since its inception, but most specimens available to collectors and investors today are from the 19th century.  With its prodigious output of trial pieces, the U.S. is perhaps second only to France in its love of patterns.

While tremendously beautiful, U.S. pattern coins are, to be blunt, expensive.  However, quintessentially American style and historical importance combine with very high demand and extremely limited supply to make U.S. pattern issues some of the most desirable U.S. coins in the market.  Don’t expect to be able to acquire any U.S. pattern specimens for less than about $1,200 to $1,600 each.  At the high-end, the sky is the limit with prices of tens of thousands of dollars being routine.

 

Certified (Slabbed) U.S. Pattern & Trial Coins for Sale on eBay

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Piedforts are another class of exclusive, non-standard coinage that is closely related to patterns and essais.  A piedfort (pronounced “pee-ay-for” and occasionally misspelled as piefort) refers to a presentation coin specially struck from a flan of double thickness.  Piedfort literally translates from the French as “heavy foot” or “strong foot”, but really means something more akin to “heavy weight”.

Piedfort coins originated during the medieval period in Europe as presentation pieces given to diplomats, important officials and other VIPs.  The practice of striking piedforts eventually died out but was later resurrected by France in the 19th century.

For shrewd coin collectors and investors, piedforts are truly a gift from the heavens.  Mintages of modern piedforts (those struck within the last 200 years) usually range from perhaps a couple dozen to several thousand specimens.  Commonly struck in off metals, silver, gold and even platinum piedforts give the discerning connoisseur plenty of precious metals from which to choose.  These modern day numismatic gems are also struck with the greatest care, ensuring every detail of their design is boldly visible.

Being coins of double thickness, piedforts are also usually double weight as well.  However, this weight relationship is only linear as long as the coin isn’t an off metal strike.  If the piedfort is a different metal than its circulating analogue, then the weight could be higher or lower than expected.

For example, a 10 gram circulating coin composed of nickel (density of 8.9 g/cm3) that is struck as a sterling silver (density of 10.4 g/cm3) piedfort would have a weight of 23.4 grams (weight of nickel coin x (density of sterling silver/density of nickel) x 2 – to account for the piedfort’s double thickness).

As you can see, the weight stacks up quickly when piedforts are struck in precious metals!  This extra thickness and heft, combined with their superlative striking, make precious metal piedfort coins uniquely attractive to both longtime collectors and coin novices alike.

 

Vintage French Silver Piedfort Coins for Sale on eBay

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As with most things artistic, French piedfort coins came first.  Starting in 1962, France began to regularly mint piedfort versions of its circulating coinage in their original metal as well as off metal silver and gold examples.  From the outset, this remarkable series has received intense interest from farsighted coin connoisseurs.  Vintage French piedforts usually have mintages that range from about 20 to 2,500.

Prices are surprisingly reasonable, given their impressive attributes.  Silver examples range from about $60 to $500 each, depending on the size of the coin.  Unfortunately, France began abusing its commemorative coin program in the mid 1980s by issuing large numbers of commemorative varieties that were also struck as piedforts.  Avoiding these over-issued commemorative French piedforts is advisable if investment performance is important to you.

Following France’s example, in 1982 Great Britain began striking piedfort coins exclusively in sterling silver.  Mintages for modern British silver piedforts are slightly higher than their French counterparts, with issuance generally fluctuating between a few thousand and 25,000.  Don’t let the slightly higher mintages deter you, as these piedforts are still incredibly rare relative to the mintages of circulating British coins.

As an example, in 1983 the British Royal Mint issued only 10,000 sterling silver piedfort one pound coins versus over 443 million circulating nickel-brass examples.  That comes out to a ratio of 1 piedfort for every 44,305 coins issued for circulation!  Now that is rarity!

Prices for British piedforts are even lower than for French piedforts, ranging from a mere $30 to about $150 per coin.  Unfortunately, the British, like the French before them, have also recently over-issued commemorative coins and then duplicated them as piedforts.  Once again, it is a good idea to exercise caution with modern British commemorative piedforts and instead concentrate on the piedforts of circulating issues.

 

Vintage British Silver Piedfort Coins for Sale on eBay

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No serious discussion of piedforts would be complete without mentioning French gold piedforts.  These coins are, without question, the magnum opus of contemporary piedforts.  Many different examples of these noble specimens were issued from 1962 to the present.  Struck in a fineness of 92% purity, vintage French gold piedfort coins are heavy, thick and undeniably impressive.  French gold piedforts are among the rarest of all piedforts, with mintages usually below 500 specimens.

The only downside to these kings among piedforts is their price.  Due to their heavy weight and high gold content, prices start at about $500 and rapidly escalate for larger specimens to over $5,000.  In spite of these higher prices, vintage French gold piedforts are overlooked by the market and represent exceptional value, especially considering their extremely low mintages.

When collecting or investing in patterns and piedforts, eye appeal is paramount.  A good rule of thumb is that a trial or piedfort coin that looks good is good.  Consequently, ugly, damaged or excessively worn specimens are undesirable and should be avoided.  This is typically not a problem because these issues generally did not circulate, resulting in an excellent average state of preservation.

Reproductions or fantasy issues are sometimes offered for sale as legitimate, original pattern coins.  In order to avoid this pitfall, it is strongly recommended that the serious investor only buy pattern or trial pieces that have been certified by a major third party grading service like PCGS (Professional Coin Grading Service), NGC (Numismatic Guaranty Corporation) or ANACS (American Numismatic Association Certification Service).

Trials, essais and patterns certified by these companies carry a powerful implicit guarantee of authenticity.  Such an assurance is easily worth the modest premium charged over non-certified examples.  However, it isn’t necessary to exclusively buy piedforts that have been certified.  Contemporary piedfort issues often come with their original mint packaging intact, proving authenticity.

 

Certified (Slabbed) World Pattern, Essai & Piedfort Gold Coins for Sale on eBay

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One interesting market aspect of patterns and piedforts is that desirability, and therefore pricing, are intimately linked to country of issue.  Any modern coin (circa post 1700 AD) issued by a country with a higher GDP (Gross Domestic Product) almost always has higher collector demand than a similar coin issued by a country with a lower GDP.

This means that patterns produced by the United States, with its gargantuan GDP and large collector base, are invariably expensive.  Patterns, essais and piedforts issued by Great Britain and France, with their more modest, but still sizable GDPs, also have robust collector demand and strong pricing, although not as high as U.S. trial coins.  Emerging market countries with lower GDPs in Africa, South America and South Asia will naturally have both lower demand and prices for their patterns and piedforts.

Collecting rarity is an intoxicating thing.  Once you’ve tasted the forbidden fruit of opulent exclusivity, it is impossible to return to a life without it.  Ultra rare pattern, trial, essai and piedfort coins are a gateway to rarity that is surprisingly attainable for the average person.

While prices vary wildly, one can begin collecting or investing in these underappreciated works of art for as little as $100.  Stunningly beautiful pattern and piedfort coins are pure rarity crystallized in the palm of your hand.

 

Read more in-depth Antique Sage rare coin investment guides here.