Just about 150 years ago, one ounce of gold was selling for $20. That’s evident with classic $20 gold pieces that weighed one ounce and circulated in the 1870s, the days of the Old West. It was also the era of our timeless silver dollar. Those coins also weighed close to an ounce. Hence, an ounce of silver was then worth one-dollar.
Gold and silver were the respective king and queen of finance and trade in ounces and fractional pieces. In addition to one-, two-and-a-half, three, five, ten, and twenty-dollar gold coins, the precious metal was so valuable, even smaller denominations of 25-cents and 50-cents were privately struck. Suffice to say, those denomination coins were tiny – smaller than most fingernails on the little finger. Because of their tiny size many were surely lost and are waiting to be found around old western cow towns. Silver too was abundant in dimes, quarters and half dollars....
So, how have the raw metals performed compared to other investments? Well, an 1870 dollar is the equivalent of $23.40 today. That’s almost exactly the current price of one-ounce of silver. So, the metal has held its own but not increased one bit. That’s a horrible 150-year investment return.
Twenty dollars of 1870 money would be worth $468 today. One ounce of gold is currently worth $2,000. More than a 400 percent increase in 150 years. Also, a pretty lousy return.
All of this is assuming we’re only taking into account the raw metal. Many vintage coins from that era are worth a handsome amount. The mint facility in Carson City, Nevada was created in 1870 to service the making of coins from the legendary Comstock Lode silver strike. That mint also produced some gold coins.
Examples of coins bearing the “CC” mintmark (for Carson City) carry a hefty collector premium over other coins from the same era. Case in point…many collector-grade $20 gold pieces from 1870 minted in Philadelphia or San Francisco currently sell for between $2,500 and $10,000 depending on their condition. Conversely, an 1870 Carson City $20 gold piece – of which less than 4,000 were made – now trades upwards of one million dollars.
More amazing in size were a scant few $50 gold pieces. These exceptionally rare coins were made by private companies but failed to catch on as a viable circulating coin. Today, they carry a huge collector premium because of their lore and romance. At more than twice the weight of a silver dollar, the large $50 gold “slugs” mined during the 1849 California gold rush, just didn’t catch on.
Today, we can’t even get a brass-plated copper, and much lighter, Sacagawea “golden dollar” coin weighing just a bit more than a few quarters to circulate in our money. “Too big and heavy” many contend. Maybe for some people. Yet, at the same time, fascination with other massive coins is epic. Proof of that is a new one kilo offering from Samoa.
The Samoan kilo coin, with a denomination of $25, weighs in at just over 32 Troy ounces of pure silver. That’s well over two Troy pounds. At over seven inches wide, it’s markedly bigger than a hockey puck. The design on it salutes other bullion coins from the US, Canada, Australia, China, Mexico, South Africa and Great Britain. The denomination and size are not unique. Other one kilo silver coins have been minted previously by several of those same countries.
In multiple full-page newspaper ads, the Samoan one kilo silver coins are being actively marketed to the public. The cost is close to $2,200. The silver “melt” value content of the coin is only about $740. Only 249 of the coins have been minted. Each coin is housed in a protective plastic slab and graded “perfect” Mint State 70 by a recognized service. Will that make them a good investment?
My crystal ball is again on the fritz but, if past performance is any indicator, the odds are iffy. Online, a number of those other, previously issued one-kilo coins currently sell for as little as $800. Others have prices in the $1,200 to $1,900 range. But, as prices as low as $800 suggest, the actual value is found in the silver content and not the coin’s size or denomination.
Again, the best reference one could access before buying any coin of this magnitude is a reputable coin dealer. It’s wise to check with them for their opinion of resale.
For more collecting information and advice, log on to: http://prexford.com/.