Big Money Coins

September 17, 2012 – The rare-coin market is a $5 billion a year enterprise and is so large that when an event occurs, such as the government claiming ownership to some marquee pieces in private hands, the decision makes headlines.

A court decision last month affirmed the rights of the federal government to 10 gold coins from 1933, infuriating dealers, collectors, and auction houses. The $20 “Double Eagle” coins that government claimed they owned due to the supposed intent of a Mint employee would have fetched millions on the open market. A 1933 Double Eagle that belonged to King Farouk of Egypt sold in 2002 at Sotheby’s for $7.6 million.

Many other coins, however, serve as the object of aficionados’ eyes and fetch huge sums. American collectors are about one million, according to Greg Rohan, president of Heritage Auctions. Major coin auctions occur each month and smaller ones occur each weekend.

The most expensive coins auctioned are prized for rarity and beauty, partially augmented by the mysteries and tales attached to the coin, which can stretch back centuries.

An example is the 1804 silver dollar, known as the “King of American Coins,” of which only 15 exist with one selling for $4.1 million in 1999. Despite the name, some were likely struck in the 1830s and brought to Asian rulers on a trade mission that saw the King of Siam passing one on to his son, Rama IV. He is believed to have given it to his governess, Anna Leonowens, whose story is told in the musical “The King and I,” according to Scott A. Travers, author of the “The Coin Collector’s Survival Manual.”

In 2011, the top 100 rare coins sold at public auction fetched an average of $204,355 each, a 27 percent gain over prices garnered in 2010, according to the Numismatic Guaranty Corp. According to numismatist and dealer John Albanese, the price of more ordinary coins, which constitute the bulk of the collecting market and valued between $500 and $10,000 each, fell approximately 20 percent with the economic downturn.

The 1933 Double Eagles that were seized in the court case were supposed to have been melted into gold bars as a method of bolstering the economy during the Depression. Despite scrupulous accounting practices that did not account for 10 coins missing at that time, the government won ownership of the coins based on the court’s assumption that no record of transaction indicated a malicious intent on the part of the Mint employee who came into possession of them.

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