The American $20 Saint-Gaudens Gold Piece
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The coin I'm talking about is America's $20 Saint-Gaudens gold piece minted from 1907 through 1933. Many collectors and investors realize that this coin often ranks among their first choices and is a natural first step when you consider that the $20 gold piece not only stood for wealth, it has defined wealth since the Civil War. Most everyone owns them, or wants to own them because they have one of the broadest appeals of any coin ever issued by our government; and because these gold coins are selling with low premiums, there continues a large generational following.
Now let's talk about the $20 Saint-Gaudens from two separate but important time periods and further limit the discussion to PCGS graded MS-64 and MS-65 examples. I do this because these time frames highlight industry changes which should be seen as very advantageous to investors and include only these two grades because history has clearly shown that Choice Uncirculated (MS-64) and Gem Uncirculated (MS-65) are one of the best choices for profits over the long term.
These particular grades experienced a documented absurd-increase in value between 1978 and 1980, which I will call period one. This investment time frame provides impressive evidence of how investors turned crisis into profits, as higher grade US gold coins moved up in price and then doubled in value. This period exceeded even my expectations and remains a great historical example what can happen to these large gold coins when inflation strikes. But there is a supply dynamic that might go undetected unless you dig further: At this point the PCGS Grading Standard had not been adopted so the number of MS-64 and MS-65 examples is arbitrary to say the least.
The second period spans from 1986 to the present and is the most advantageous time frame because it focuses on true independent 3rd party grading. Since 1986, the condition of a coin and therefore its value has been defined and limited by PCGS grading. The information learned from this second phase is important for two reasons: First through the independent grading process, the availability of PCGS graded MS64 and MS65 Saint Gaudens is thought to be much less than 1% of the original mintages. Second and more importantly to you is that many high grade examples which would have traded before PCGS would not make the grade in today's more exacting market. This underscores the reason I only recommend Saint-Gaudens graded by the Professional Coin Grading Service (PCGS) and this can be easily understood by watching the PCGS Grading Process Video.
Also consider these added benefits as the $20 gold piece provides its "Triple Play" advantage: First it contains almost an ounce of gold, so those looking for a simple bullion play have an upscale option. In fact, it is as close as you can come to a semi-bullion play and still be included in the classic, certified rare coin world. Second it is considered scarce by a silent collecting base which eagerly seeks this particular coin. And third the last of these gold coins were struck in 1933, so many believe they cannot be confiscated in the event that bullion is recalled in the United States.
6 REASONS TO INVEST IN $20 SAINT-GAUDENS TODAY
I've already said the Saint Gaudens is the most universally owned and traded coin, creating the most phenomenal demand both in this country and abroad; great collectors, wealthy royalty and government treasuries typically own the Saint-Gaudens. While foreign powers do own and store bullion, they also keep their money in United States $20 gold pieces because they know that for the safest hard asset hedge, in good times and in bad, this coin is not easily matched.
Have you ever really looked at one of these coins -- studied it? I have seen virtually every coin produced by the United States and the Saint Gaudens design with its beautiful relief, is the most majestic. The public will buy this coin in answer to the unlimited printing of paper money but many more will reinforce this trend because of its beauty, its weight and its history.
Every $20 Saint-Gaudens contains nearly one ounce of pure gold, so while it is not a bullion coin it clearly is watched by the world wide gold trade. But there is more than weight working for you in one of our favorite gold choices. This coin exploits rarity and demand from a well-established collector and investor market. When rarity and demand converge, the price movements can be explosive leading to more psychological momentum. In this scenario, upward price movement of high grade $20 Saints could be greater than simple gold bullion due to its finite supply.
In case you're unaware, our government agrees that the United States $20 gold piece is a rare coin despite its low premiums. This is important because it is not subject to the normal reporting requirements associated with many bullion coins, adding unconditional security and privacy which sparks further demand. People who are privacy oriented will clamor for this coin instead of bullion.
Frustration with equities and financial instruments provides a large source of fresh money to push prices higher. Stock players are looking for other ways to deploy capital and with what treasuries are paying people believe an alternative to their savings account makes sense.
The suitability of the "Double Eagle" in large trades is outstanding as everyone admires the coin. It is also a unique trading vehicle because of its availability in sufficient numbers to create a trading pool, which lends itself to cost averaging and large promotion. The benefit of course is scale which brings in larger investors. For these reasons, the first Wall Street trading funds were dominated by this coin.
THESE 2 GRAPHS DETAIL THE LONG TERM PRICE ACTION
Consider the Saint-Gaudens $20 gold pieces in PCGS MS64 (Choice Uncirculated) or MS65 (Gem Uncirculated) for complete privacy and protection against unreasonable government control. You also benefit from scarcity, intrinsic value, psychological demand, and widespread popularity.
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4 ADDITIONAL REASONS TO INCLUDE THIS COIN IN YOUR THINKING
PCGS graded U.S. twenties allow the investor to define their own strategy which is not dependent on any single dealer. For 30 years CNI has quoted daily buy and sell prices but there are more than 500 dealers nationwide who are also eager to purchase PCGS gold ensuring fairness and liquidity.
Let's talk about rare coin value which is not abstract but a function of demand, investor base and weight. Value also includes considerations like beauty, rarity, affordability and profit potential. Of all the coins I could recommend there are a number which sell at advantageous prices but lack large demand. Some are beautiful and some are very rare but may not be the best choice because only a handful of people can afford them. Of all the things that positively impact the value of any coin the $20 Saint satisfies 95% of them and that is why it is always at the top of my list.
Today's investor should not accept the "conventional wisdom" that the inflation dragon is no longer a problem. The consequence of inflation or worse hyper inflation is more dangerous now than ever before because our government has created huge deficits in response to our most current economic downturn. When this stack of I.O.U.'s comes crashing back in the form of devalued dollars the price of high-grade $20 Saint-Gaudens could go through the roof.
I do not subscribe to an Armageddon world-view but there is a real threat from cyber attacks and armed rogue nations which could produce oil shock and social chaos. Under this unlikely senario the financial world will be turned on its head. These early gold coins do not answer to any government and have provided an unquestioned layer of financial security since before the Civil War.
THE CRAZY PRICE COMPESSION OPPORTUNITY
One of the benefits which come from watching gold and more specifically the $20 gold piece designed by Saint-Gaudens is that price patterns develop which some people miss completely. These patterns can produce money making clues to those looking for an edge. It is no secret that the Saint-Gaudens has underperformed the broader gold market but the direct benefit to the holder of this coin is that a great deal of volatility has been avoided in the process. And if you are worried about large gold price swings my approach provides a blanket insurance policy and at the same time offers a better nights sleep. For the contrarian investor there is more good news because the pricing of the series has been compressed to the lower end of its range. Years ago it was believed that as gold moved higher the Saint-Gaudens would follow lock step because it contains almost an ounce of gold. In fact what happened surprised everyone. As the price of gold moved higher the premium on the Saint-Gaudens decreased most likely because new public money was poured into the junk modern issue market which has been heavily promoted since the inception of PCGS Registry Sets. I am convinced this premium shift is only temporary and will reverse itself when the public realizes that most modern issues are overproduced and will eventually be sold for very little over melt. In the meantime today's buyer is quietly presented one of the best value plays in the business.
CONSIDER ONE OF THREE INVESTMENT STRATEGIES
If you considering a cash purchase take advantage of my discount on five or more coins and remember my Saint-Gaudens are hand selected and so fall into the higher end of the grading range. This extra service does not cost more but could produce better financial results in the longer run.
If your entire gold position consists of only bullion coins consider moving a portion of this money into PCGS graded Saint-Gaudens in MS64 or MS65. The Saint-Gaudens is not a bullion coin and so is not a substitute for a core bullion position but this diversification fits nicely into the CNI Balanced Portfolio Concept and could serve to make your portfolio less volatile.
And finally if you already own PCGS graded twenties, consider adding to your holdings because the gold versus premium ratio is the lowest anyone at CNI can remember. We have recommended gold ownership for more than 30 years and today the price and demand fundamentals of the $20 gold piece still make it one of our favorite choices.
Your questions are welcomed so consider calling for more information and pricing designed to suit your specific needs. It is also important to know that even the best gold investment presents some element of risk. We will work at providing straightforward answers and will share our years of experience in providing the reasons this particular choice makes sense today, all before you spend one dime. Then you decide.
Thanks for reading.
Ken Edwards
1-800-225-7531
PS / If you have questions or want a call back you can
also use: kenedwards@golddealer.com
Copyright © 2011 CNI Inc.
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