Monthly Archives: April 2011

What Do You Really Know About Modern Bullion?

Numismatists talk about Modern Bullion all the time – but how much do you actually know about this term?

We’ve written about this subject before, and today we’d like to share the history and definition of modern bullion with you here.

If you want to see the Gainesville Coins collection of modern bullion offerings, please visit our website!

Modern Bullion

Pamp Suisse 1 Kilo Gold Bar

In 1933, the Emergency Banking Relief Act allowed President Roosevelt to implement the confiscation of all privately owned gold in the United States in exchange for paper money. This resulted in deflation of the dollar and a spike in gold value, as the government proceeded to aid troubled bullion banks and replenish the gold reserves at Fort Knox. From then onward, Americans were only permitted ownership of numismatic coins that were valued by their currency denomination, condition, mint marks, dates, and rarity, rather than by their gold composition. It was not until December 31, 1974 that the Gold Statement of Policy lifted the ban and Congress reinstated Americans’ right to buy and sell bullion.

The term bullion refers to precious metals in bulk, which are traded on the commodity markets. A bullion coin is not used for everyday commercial purposes, but instead kept for investment. Most times, it is minted by a nation’s government. The distinction between bullion coins and normal currency is that a bullion coin is valued by its physical make-up – the mass, composition, and purity of the precious metals it contains – rather than its monetary denomination or face-value. As a result, bullion coins are valued significantly higher than normal currency.

2011 1oz Gold Buffalo

When minting a coin, governments add numismatic value to a coin’s bullion value, while also endorsing its purity. The purity of bullions vary from issue to issue; however 99.9% purity is customary. 100% bullion coins do not exist, as absolute purity of metals in this form is not possible.

While gold bullion and silver bullion are the most common metals, palladium and platinum bullion bars and coins are available for interested investors. The rarest of all precious metals is platinum, and of the four, gold ranks second highest in rarity, followed by palladium, and finally silver.

At Gainesville Coins you can purchase all types of bullion – platinum, palladium, gold and silver, from the American Platinum Eagle and Palladium Canadian Maple Leaf, to the Perth Australia Gold Bar and even the Beijing 2008 Olympic Silver Coin Program.

Visit our website at Gainesvillecoins.com to view and buy modern bullion or call 813.482.9300 to speak with one of our bullion brokers.

Ask the Gold and Silver Chick! New World Currency?

Hi, Gainesville Coin readers! Thanks for stopping by.

Here is this week’s question:

Do you think we’re being setup for a collapse of the gold silver pricing? The IMF today announced that China will outpace us in 5 short years. We know the IMF is readying the new Global Currency. Do you think the currency will be backed by Gold and Silver?

Great question! Here’s what the Gold and Silver Chick’s has to say:

Yes, I saw that the IMF announced that China will outpace the US – and we all know that last week the University of Texas Investment Management Co. took delivery of almost $1 billion in gold bullion and is storing the gold bars in NY.  To technically answer your question (do we think the “new currency” will be backed by gold and silver”) is technically  out of the scope of this website;  that answer leans toward a more political view/answer than what we want to cover here.  But I can tell you this… gold and silver has been considered “money”  since the beginning of time, and have been around as long as The Bible. It is anyone’s guess how all this will play out with the dollar. But as I like to say… Trust God for everything, trust the government for nothing, and trust gold and silver for everything in between.”  Hope this helps to answer your question!

Ask the Gold and Silver Chick! Coins or Bullion?

Gainesville Coins recently received this question on our Facebook page, and want to post The Gold and Silver Chick’s response here so everyone can see it. Keep your questions coming!

This week’s question:

“Should my main focus be on silver coins or bullion?”

The Gold & Silver Chick says:

To be clear: you are asking about bulk bullion vs modern coin bullion. Bullion can be used to describe modern coins in 1oz increments such as modern bullion…Canadian maple leafs, silver eagles, Austrian philharmonics, etc. And then there is bulk bullion, ie 100oz silver bars, 10oz gold bullion.
If you have a large amount of dollars that you are wanting to put into gold/silver then you might want to consider the bulk bullion to cut down on storage. Silver will use more storage room than gold. You should also be aware that as silver gets more popular, 100oz silver bars will start being counterfeited (usually made of lead), so always buy from a reputable dealer like Gainesville Coins.com.
If you have a smaller amount of dollars you are looking to move into gold and silver, I would recommend 1 oz coins; these will be easier to move and to barter. I would also recommend a 40%/60% ratio… 40% gold/ 60% silver. Hope that answers your question!
-The Gold and Silver Chick

A Golden Tipping Point: University of Texas Takes Delivery Of $1 Billion In Physical Gold

A Golden Tipping Point: University of Texas Takes Delivery
Of $1 Billion In Physical Gold

Tipping points are funny: for years, decades, even centuries, the conditions for an event to occur may be ripe yet nothing happens. Then, in an instant, a shift occurs, whether its is due a change in conventional wisdom, due to an exogenous event or due to something completely inexplicable. That event, colloquially called a black swan in recent years, changes the prevalent perception of reality in a moment. This past week, we were seeing the effect of a tipping point in process, with gold prices rising to new all time highs day after day, and the price of silver literally moving in a parabolic fashion. What was missing was the cause. We now know what it is: per Bloomberg: “The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.” And so, the game theory of a nearly 100 year old system of monetary exchange has seen its first defector, but most certainly not last. With an entity as large as the University of Texas calling the bluff of the Comex, the Chairman, and fiat in general in roughly that order, virtually every other asset manager is now sure to follow, considering there is not nearly enough physical gold to satisfy all paper gold in existence by a factor of about 100x. The proverbial Nash equilibrium has just been broken.

Further reading:
http://www.bloomberg.com/news/2011-04-16/texas-university-takes-cue-from-kyle-bass-to-hold-1-billion-in-gold-bars.html
http://buysellgoldprices.com/2011/04/18/university-of-texas-takes-delivery-of-1-billion-in-gold-bullion

Introducing The Gold and Silver Chick!

It’s official – Gainesville Coins is starting a new segment, and you’re the center of attention!

We know the world of numismatics can feel overwhelming at times. It can be daunting to wade through the wealth of information, terminology, products and opinions out there. So where can you, the discerning coin enthusiast, turn to for assistance?

Enter The Gold & Silver Chick!

Periodically throughout each month, our very own numismatic expert will be taking your questions. Curious about the history of a particular coin? Need to verify any of our shipping and purchasing policies? Want to know more about the pros and cons of available products?  Ask anything you like on the Gainesville Coins Facebook page, and we’ll post the responses here on the blog.

We’re looking forward to hearing from you!

French Mint Sold Out of 1,000-Euro Gold Coin Ahead of Release

The French Mint (La Monnaie de Paris) is scheduled to release a beautiful new 1,000-euro gold coin this July – and as of the 11th, all reservations have been made and the coin is officially sold out. Coinweek tells the full story below:

French Mint Sold Out of New 1,000-euro gold coin, before July Release

Posted by CoinWeek on April 11, 2011 10:00 AM

The French Mint, La Monnaie de Paris, will issue a new 1,000-euro gold coin this summer. Reservations for the limited-edition coin opened on Friday, with hundreds of collectors queuing outside the Mint in Paris. As of today the coin has been sold out.

Only 10,000 of the coins will be minted. The Mint is also making a 100-euro coin in silver, of which 50,000 will be issued.

The coins are the most valuable ever created by the French Mint.

Both feature the Greek hero Hercules, representing fraternity, and two female figures symbolising equality and liberty.

The coins will be legal tender, but are more likely to be kept as collection pieces. By Saturday morning, the 1,000-euro coin was already being resold online for 1,200 euros.

Islamic Coin Is Second Most Expensive Coin Ever Sold at Auction

One of the rarest and most highly-prized Islamic coins in existence was sold at auction in London yesterday. Its sale price of £3.7 million makes it the second most expensive coin ever sold at auction. CoinWeek provides a detailed description of the Umayyad Dinar in the article below. What do you think of the design and auction price of this rare gold coin?

Islamic Coin Sells For £3.7 Million In Morton & Eden Sale – Second Most Expensive Coin Ever Sold at Auction

Posted by CoinWeek on April 5, 2011 8:20 AM

One of the rarest and most highly-prized of all Islamic gold coins, struck possibly to coincide with an occasion when the Caliph himself led the Hajj pilgrimage to Mecca, sold for a record £3.7 million ($6.029,400 US)  in a sale at specialist auctioneers Morton & Eden in London today. The price makes it the second most expensive coin ever auctioned. (The most expensive is the 1933 Double Eagle sold by Sotheby’s in July 2002 for $7,590,020).

The Umayyad dinar, dated 105h (723AD) was struck from gold mined at a location owned by the Caliph himself – known on the coins as the “Mine of the Commander of the Faithful”. An additional legend which reads: “bi’l-Hijaz” (“in the Hejaz”), makes it the earliest Islamic coin to mention a location in the Kingdom of Saudi Arabia. It had been expected to realise £300,000-400,000, but four bidders in the saleroom sent the price spiraling ever higher. It was purchased by the British trade on behalf of a European private collector.

From the Morton & Eden Catelog:

Lot 12: UMAYYAD, TEMP. YAZID (101-105h) OR HISHAM (105-125h)
Dinar, Ma`din Amir al-Mu`minin bi’l-Hijaz 105h
REVERSE: In field: Allah ahad Allah | al-samad lam yalid | wa lam yulad Ma`din | Amir al-Mu`minin | bi’l-Hijaz
WEIGHT: 4.28g
REFERENCES:
Walker 1956: ANS.16 = Miles 1950: 66; Khalili Collection AV1032 (same reverse die)
CONDITION: Extremely fine, extremely rare and historically important; the first example of this type to appear at public auction

A second, slightly earlier dinar (92h – 711AD) struck from gold from the same mines sold for £648,000. It had been estimated at £250,000-300,000.

Morton & Eden Islamic coins specialist Stephen Lloyd said: “We are absolutely thrilled and delighted with the results from this sale. We had worked very hard to promote these particular coins internationally, but the prices they have achieved have surpassed all expectations. Their success also demonstrates that sales by public auction are the only way to achieve the very highest prices for the very finest pieces.

“The excellent results for the two gold dinars early on in the sale, which was dedicated to important coins of the Islamic world, set the stage for the remainder and extremely strong prices were paid throughout.”

Scholars have identified the site of the mine itself as Ma`din Bani Sulaim, located north-west of the Holy City of Mecca. Gold has been mined there for thousands of years, and the site is still worked today. Remarkably, mediaeval Arab writers record that the Caliph bought a piece of land in this area, containing at least one gold mine, almost exactly when these coins were made. But while there is general agreement on the source of the gold, the question of exactly where these coins were struck is harder to answer.

“The capital, Damascus, is a strong possibility, but mint workers and their tools could easily have travelled with the Caliph and struck coins wherever he stayed,” Stephen Lloyd said. “Scholars have noted that the dates of these very rare dinars seem to coincide with the occasions when the Caliph himself led the Hajj pilgrimage to Mecca, while an old inscription also shows that a road built specially for the pilgrimage went right past this mine. So one plausible theory argues that the Caliph visited his gold mines while en route for Mecca, and it is possible these coins might have been struck while he was travelling.”

Elsewhere in the sale, one of the first Islamic coins struck in the Sultanate of Oman, an extremely rare Umayyad silver dirham, one of only a handful known today dating from the Hijri year 90 (709 AD) sold for £1,080,000, a world auction record for a silver Islamic coin. It had been estimated at £20,000-30,000 and was also purchased by the buyer of the more valuable gold dinar.

“This coin reflects the importance of Oman and the Gulf region as a key commercial centre, then as now,” said Stephen Lloyd.

Umayyad dirhams from Oman are the earliest Islamic coins struck in the Arabian peninsula, and also the first dated objects to preserve the name Oman. Only two dates are known: 81h and 90h, and just a few specimens are recorded in total.

The sale raised a total of £6,673,560, against estimates of £886,000-£1.16 million.

For further information, contact Stephen Lloyd or Tom Eden on 020 7493 5344 or info@mortonandeden.com.