Gold Dollar Coins Review: Myths and Facts

Gold dollar coins history dates back to the 1830’s when California Gold Rush created the need for people to make gold coins that could become new means of payment for goods in place of raw gold nuggets. This idea was supported by a German immigrant Christopher Bechtler who minted the first prototype of a US gold dollar coin by self made metal presses.

The very first official gold dollar coins of the US were struck at the US Mint in 1849 and became the smallest gold coins in American numismatic history. $1 Liberty Head coins were minted in gold in gold proof coins and circulation variations from 90% pure gold to make them scratch resistant and prolong their circulation life. A few years later $1 Indian Princess coins were introduced to the market. However, these $1 gold dollar coins were very small measuring at 13 mm in diameter and could be easily lost. A few years later larger $2.5, $5, $10 gold dollar coins were struck by the US Mint to satisfy this need.

Since these dollar coins are extremely popular on the market, they have always been surrounded by myths and facts. Below you will find information that will help you distinguish the difference between the two.

Myth 1: Indian Princess coins design features an Image of an Indian Princess designed by James B Longacre.
Fact 1: While this is true that the Indian Princess coin design was carried out by J B Longacre, the Chief Engraver of the US Mint at the time, it does not feature an image of a Native American Princess per se. The design on the obverse shows an embellished version of Lady Liberty wearing a stylized wreath that remotely resembles a headdress that was worn by Native American Nations. The purpose of creating this image was to make coins stand from one another and to eliminate confusion.

Myth 2: Gold dollar jewelry or coins that were previously fitted as charms, pendants or else could greatly enrich your numismatic portfolio for less money.
Fact 2: This could not be further from the truth. Any time any modifications are applied to coins altering their original state, this significantly decreases their value. Watch out for drill holes, solder marks and scratches that could indicate that these coins were used as jewelry. This is especially common with original Liberty Head coins that many owners “turned” into jewelry but later tried reselling as coins.

Myth 3: According to President Roosevelt’s historical Gold confiscation act of 1933 that he signed in the light of severe monetary and banking crises, individuals were forced to turn in their bullion coins to make up for Government budget deficit and save the future of the country. Buying only rare pre-1933 coins like, for example, $20 gold coins or other dollar coins is the only way to protect your gold investment from similar acts in the future.
Fact 3: Buying exclusively pre-1933 gold Eagle coin or any other historical American coins without proper numismatic knowledge is making yourself potentially prone to all kinds of gold scams or simply paying too much for the “historical” value that might not even be realistic. It’s highly unlikely that in the modern times individuals will be forced to sell their gold dollar coins for a fraction of a price to make up for the Government’s budget deficit. On the other hand, buying bullion coins like American Buffalo gold Bullion coins that are made from the purest 24 karat all American gold will provide a sound and safe investment for the future.

Myth 4: In uncertain economic times such coins are the only sound investment to get into due to gold’s absolute liquidity.
Fact 4: If we are truly talking about tough economic times when people are facing losing homes and hunger, the liquidity of gold dollar coins is highly doubtful. You might have trouble finding somebody to purchase these coins from you, so this liquidity is highly dubious during severe economic crisis.

Myth 5: Buying gold dollar coins will establish a 100% recession proof investment in all economic environments.
Fact 5: Not true. The value of gold dollar coins is directly related to current precious metals market price, if this price goes down, the value of your coins will undoubtedly get decreased no matter what the numismatic value of your coin is.

Taking time to carefully evaluate these common myths or facts will help you make an informed decision of whether you should invest in precious metals or choose an alternative financial mechanism.