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What is the Slingshot Factor in U.S. Gold?

Many investors are interested in not only owning gold for wealth insurance, but for profit motivation as well. Fortunately, pre-1933 U.S. gold offers both. Classic U.S. gold coinage like the $20 St. Gaudens Double Eagle has historically been an effective crisis hedge and a source of profits in gold bull markets.

With gold performance near all-time highs, and set to go even higher over the next few years, the right numismatic coin offers profit opportunity above that of regular bullion.

During strong gold rallies, a one-ounce bullion coin simply tracks the spot price dollar-for-dollar. If spot races upward by $300, a one-ounce gold Eagle will take on $300 more in value. However, in that same scenario, a scarcer pre-1933 gold coin might jump to the tune of $500, $1,000 or $1,500. Simply put, vintage gold coins have a “slingshot factor” standard bullion does not. A gold bullion coin is forever tethered to spot, but classic gold coins have the ability to appreciate at a much stronger rate.


The History Behind U.S Pre-1933 Gold Coins
From the 1790’s through the 1930’s, American gold coinage served as the backbone of our country’s financial system. Before money existed in the form of paper notes or electronic records, large sums of money were held in the form of trusted, internationally recognized United States gold coins. Copper, nickel and silver may have been used for routine daily spending—but nations, banks and large institutions chose American gold as their preferred store of value.

The role of gold coinage was altered significantly when Franklin Delano Roosevelt passed Executive Order 6102 in 1933. This edict prohibited both the minting and hoarding of American gold coins. The official stated reason for the order was the “hoarding” of gold was stalling economic growth and worsening the Great Depression. In reality, however, the order allowed the Federal Reserve to dramatically expand the money supply without constraint. (We still have the same problem today, but it is magnified considerably.)

The limitation on gold ownership ended in the 1970’s — and classic U.S. gold coins quickly found new life as collectibles and investments. The demand for classic (aka “pre-33”) U.S. gold coins became robust, but the supply was often limited. 

Unlike modern bullion products like Eagles and Maples, the supply of classic U.S. gold is finite. No more can be made to keep pace with demand. When pre-1933 gold is in vogue, premiums for these items can expand considerably. As a result, premiums over melt spiked during periods of strong demand and extreme volatility. In softer markets, premiums would return to more normal levels.

We’ve watched the premiums for classic U.S. gold expand and contract dozens of times over the years. Today’s relatively low premiums make pre-1933 U.S. gold one of the best opportunities in bullion or numismatics.
Why Now?
What makes classic U.S. gold coins so attractive right now? When the spot price of gold suddenly rises, pre-33 U.S. gold coins usually jump in premium. The net result: a spike in the price of gold is amplified in the value of classic U.S. gold. 

For example, take the $20 Saint-Gaudens in MS64. When spot gold was $837.30 per ounce in January 2008, MS64 $20 Saints were trading around $1,350 per coin. Two years later, spot had risen to $1,121.90 per ounce (a $285/oz. jump), but MS64 Saints had vaulted to over $2,050 per coin. For every dollar spot gold advanced, the price of an MS64 Saint increased by $2.55.

Where pre-1933 gold coins are concerned, the key for investors is timing. Very rarely are these coins available at low premiums while spot prices are increasing. Gold appears to have rebounded off the lows, and we see the trajectory continuing upward for years to come. Persistent inflation, geopolitical conflict, and the eventual drop in interest rates will continue to create reasons for investors to seek out gold as a safe haven asset. 

In a nutshell, today’s premiums represent a superb entry point for classic U.S. gold. If history is any indication, a sharp rise in gold spot price could trigger significant premium expansion. This phenomenon has repeated itself many times in the past—and we would be surprised if it didn’t happen again. 

Today, we’re able to offer $20 Saint-Gaudens in MS64, MS65, and MS66.

Today's Offer
Each coin we offer here has been independently inspected and certified by the uncompromising standards of PCGS or NGC to be in MS64, MS65, or MS66 condition. Plus, we're offering a way for you to add bullion and numismatic coins to your holdings that is as easy as 1, 2, 3...

  • MS64 $20 Saints just $2,709 per coin, PLUS a free 1 oz. Silver American Eagle
  • MS65 $20 Saints just $2,799 per coin, PLUS two free 1 oz. Silver American Eagles
  • MS66 $20 Saints just $3,449 per coin, PLUS three free 1 oz. Silver American Eagles

Please call us today at 800-831-0007 or email us to purchase your $20 Saints. Quantities are limited, so don't delay!

*Prices subject to change based on market fluctuation and product availability. Prices reflected are for cash, check, or bank wire. Free shipping, handling, and insurance is included. Offer expires Friday, May 3, 2024 or while supplies last.