Gold's Popularity Grows

NEW YORK (CNNMoney.com) -- As economic fears drive gold prices to new highs, the creator of a gold-dispensing ATM is attracting attention around the globe.

Germany-based GOLD to go, which is currently churning out 50 gold machines a month to meet a recent jump in demand, launched its first ATM in Abu Dhabi's Emirates Palace Hotel earlier this month and opened its second in Germany last week.

The golden ATM's next destinations are the Bergamo Airport in Milan, Italy, all major airports in Malaysia, one of Russia's biggest banks and an undetermined location in Turkey.

By making gold investing as easy as buying a candy bar from a vending machine, GOLD to go hopes to attract average buyers to the gold market.

"We are going to make gold public with these machines," said Thomas Geissler, CEO of Ex Oriente Lux AG, which owns GOLD to go. "The prices are so easy to control that we're going to de-mystify gold and make it easier for anyone to buy it."

GOLD to go's ATM looks like a vending machine and dispenses gold coins and bars weighing up to one ounce at prices updated every 10 minutes based on the real-time spot price of gold.

ATM-owners can choose from a variety of other gold items, such as gold Canadian maple leaf coins, South African Krugerrands, and even some custom designs. For example, the special edition gold medallion it engraved with the Palace Hotel's logo was created for the United Arab Emirate debut.

See the gold-vending machine in action

Locatelli is now launching a GOLD to go ATM in Milan's Bergamo Airport, which he says is one of Italy's fastest growing airports.

"[Bergamo] is a great place for it, because serious international business travelers will stop over here a few times a month at least," he said. "In general you tend to spend more when you're traveling and in a good mood, so you can now use a vending machine to get a present for someone or buy some bullions as an investment."

After a three-month testing period at Bergamo Airport, Locatelli said he hopes to introduce gold ATMs in every airport in Italy as well as major community centers and banks.

Not for serious investors? While the ATMs could be a hit with wealthy travelers, the idea is unlikely to catch on with serious investors, said Jeffrey Nichols, managing director at American Precious Metals Advisors.

"It's an interesting phenomenon, and I can see that wealthy and high-net-worth travelers might make impulse splurges on gold bars or coins, but I can't see a serious investor buying gold through a vending machine," he said.

Jon Nadler, senior analyst at Kitco Metals, agreed, saying that he would be surprised if investors bought into the new invention, because unlike the spot market, ATMs don't take your gold back when you want to sell it.

"Gold is a two-way market, so I would like to see that same machine buy back that gold and spit out cash," said Nadler. "A gold-dispensing ATM is great, but a real ATM also accepts deposits."

Nadler also said that GOLD to go's higher prices may be a deterrent, especially to investors who want to purchase large amounts.

GOLD to go says that, like any physical gold vendor, it must apply a margin to its items. While the spot price for one ounce of gold was about $1,214 in midday trading on Thursday, GOLD to go was selling a 1-ounce gold bar for 1,044.86 euros, or approximately $1,284.13.

But the ATM's popularity shows how much more available gold is becoming as demand picks up.

"It shows how attitudes toward gold are changing," said Nichols. "Gold is available in more forms and through distributors that make it more accessible for average people around the world to buy gold."

Earlier this month, gold prices hit an all time high of nearly $1,250 per ounce, and the precious metal has continued to climb as euro zone countries struggle with debt and investors worry that the region's problems could spread globally.

Until this uncertainty in the market eases, the demand for gold will only grow, said Carlos Sanchez, a precious metals analyst at CPM Group.

"[The ATM] is just a reflection of the demand from consumers and investors for exposure to gold," he said. "As long as prices continue to trend upward and investors remain concerned over economic and political conditions, I think we'll keep seeing strong demand for safe-haven assets like gold."

Next stop, Italy: Patrizio Locatelli, owner of SE 6, a small company in Italy that pays customers for gold, flew to GOLD to go's factory in Germany to check out the prototype when it was first unveiled.

Locatelli was having a hard time keeping up with the costs of rent and hiring employees, so when he came across the GOLD to go ATM online, he saw it as a golden ticket to an efficient way to expand his business.

"When you see exchange rates going up and down every day with the euro under so much pressure and stocks decreasing, this gold machine seemed like a very sound idea," he said. "In times like these you must think of somewhere else to put your money, and physical gold still has great appeal for everyone."

Civil War Gold

Give consideration to civil war gold. The coins minted during the five years our country was at war with itself (1861-1865) are niche coins often overlooked. Their significance should not be underestimated. Few dealers out there actually specialize in civil war gold. If you can find one, often you find they also sell battle flags, weponry and other relics. When you can make a connection or cultivate a relationship with someone who's passion for the era or passion for the history outweighs their inventory, and need to "pay the bills", you've got a friend. Not all are created equal. 

As for the investment? First off, either way you look at it, they are rare coins.  But, if you can invest in a rare coin that has historical significance, or a story that goes along with it, you've got a coin that will be easier to sell and easier to get top dollar for. Also, consider the idea of focusing dollars on one rare coin than four lesser ones. Low pop, high grade coins, especially from the Civil War, cost more because they are worth more!

One rule of thumb, the lower the mintage, the lower the pop the higher the price- the better the coin. It's simple. The best, in 99 percent of the cases, costs more. That doesn't mean you need to over pay for a coin though. Check your sources or listen to someone you trust. But either way, consider Civil War Gold!

“Confident Collectors are Aggressively Buying”

This sounds loaded, but its the truth. After a brief dip in the spot price of gold, the rare coin surge higher continues. Fortunately for coin investors, no dip was experienced. Gold’s mood swings have seem to have nothing but a positive effect on the market. Those investing in rare coins that are patient and watch the economy around us falter; will be the winners in the investment arena. Investment guru Warren Buffet recently said inflation is “exploding.” “Whether it's steel or oil ... We see it everyplace.” In the history of the rare coin marker it seems that inflation is the number one force that prompts the increase of rare coin prices. There are still so many truly rare coins that are affordable and increasing in value. This will not continue forever as “confident collectors are aggressively buying rare and interesting coins”, said the CDN

Morgan Silver Dollars

If inflation continues over the next three years you can project the acceleration of investments in Morgan Silver Dollars to increase on average 122% per year.  Morgan Dollars performed outstanding between 1983 -1986, (stock market crash, recession, savings and loan scandal and inflation). Morgan Dollars have always been the most popular way of investing in silver in the rare coin market and will prove to be such during this run. 

Between inflation, increased demand and rising silver prices; expect Morgans to explode. Consider the fact that silver over the last three years has gone from $5.00 an oz. to over $18.00 per oz., that’s a 275% increase, while Common Date Morgans have only gone up 18%. We see this trend time and time again. Rare coins seem to wait until precious metals peak out and begin moving downward before they see “bull market” gains. Yet, rare coins increase at a steady 6% per year during prosperous metal markets. Again, if inflation continues; rare coins will significantly outperform their bullion counterpart.

Morgans During Inflation

Basic San Francisco Morgan Set MS-65 (1878-1882) during Inflation:

1983 1986
$1,320 $6,125 365% or 122% per year

A basic San Fransisco Set bought today, under with higher prices of silver should shatter these returns.

silver

It is highly probable that silver from the household of George Washington was used to mint the first batch of silver half dimes (dimes) in 1792! The silver coinage of the United States is extensive, with seven different denominations ranging from the three cent piece to the silver dollar. Silver is no longer used in everyday United States coinage. But it certainly was from 1792 to 1964! Investing in U.S. silver coins involves much more than just silver dollars; from the Comstock Lode of Nevada to the Pittman Act of 1918, it involves a cultural survey into our history!

Gold Hits Record, Rare Coins Surge

With gold hitting record levels rare coin investors are ecstatic. Investors have pushed the spot price of gold over the coveted $1000 mark and have begun investing heavily in bullion related rare coins like $20 Gold Saint Gaudens and $20 Liberty’s. But what the average investor tends to forget is that high- grade, low-pop, truly rare coins are the money makers over the long term. These numismatic specimens are not susceptible to the often violent volatility that gold bullion or low grade rare coins can experience. The numbers coming back from recent auctions prove we are in the midst of a strong and stable rare coin market. The only problem we are encountering is a serious lack of rare coin availability.

Incuse (in-kyoos')

The artistic success of the 1907 $10 and $20 gold coins of Augustus Saint Gaudens made President Theodore Roosevelt want to continue the overhaul of United States gold to include the $2.50 and $5 coins. Unfortunately, Saint Gaudens died in August 1907. Roosevelt, in his usual impetuous way, asked his friend, Dr. William Bigelow, to come up with a new approach and a qualified sculptor for the two coins; and fast!

Bigelow was a third-generation Harvard-trained surgeon who chose to follow the art world instead of the scalpel. He became enamored of Asian art and philosophy. Several trips to Japan later, he had amassed a huge collection of Asian ceramics, prints and paintings. He would eventually donate his collection to the Boston Museum of Fine Arts, where it is considered to be the finest collection of Japanese and Chinese art in the United States.

Dr. Bigelow met Bela Lyon Pratt at his studio in January 1908. Pratt was a Boston sculptor who had attended the Yale School of Fine Arts and the Art Students League of New York City, where he studied under Saint Gaudens, eventually becoming his assistant. After further studies in Paris, Pratt became Professor of Sculpture at the Boston Museum School of Fine Arts. Pratt had a great deal of confidence in himself, and that impressed Bigelow who knew that Roosevelt was not fond of those who were timid or shy. Bigelow explained to Pratt that he was interested in a sunken relief design for the new coins. This statement astonished Pratt, for just a couple of days before their meeting he and his assistant had been discussing the very same idea!

Pratt immediately started work on models for the $2.50 and $5 gold coins. He believed that the headdress on Saint Gauden’s $10 coin was not natural looking, so he modeled an Indian chief (possibly Chief Hollow Horn Bear), wearing a headdress with feathers lying in a more natural position. For the reverse, President Roosevelt was adamant that the reverse of the $10 coin must be used. He was pleased that this powerful eagle was featured not only on the $10 gold coin, but on his inaugural medal of 1905 as well.


The $2.50 and $5 coins were minted around October of 1908. The radical sunken relief design was an artistic if not popular success. These coins were the opposite of the higher relief $10 and $20 coins of Saint Gaudens, because they stacked easily in banker’s trays. There was some comment by concerned citizens that the recessed areas of the coins might harbor germs. These concerns were unfounded. The coins would continue to be struck through 1929.

These United States gold coins of 1908, under the aegis of President Theodore Roosevelt, were more than worthy of comparisons between the finest gold of Europe, or of the ancient world of Greece or Egypt. America had finally utilized the talents of its best sculptors to show the world that their coinage was second to none!

buffalo bullion

So, ok... I know they are not "rare coins" but in the mad rush towards bullion the new Buffalo Gold pieces that have been slabbed "Cameo Proof" or "First Strike" are inherently rare. These bullion pieces already sell at a premium over spot and that premium has been climbing. Consider the state quarters which are really kids stuff but make the point. State quarters are worth a quarter unless they are proof or slabbed with some unique identifier like "Ultra Cameo Proof", some of which now retail for 100x's their face value. So if you are going to make an investment in bullion consider the fact that bullion will always be the price of bullion but a graded proof automatically makes the coin rare.

Previous Market Highs?

Large denomination gold coins have moved up with the price of gold but are not anywhere near their own previous market highs. $20.00 Saint Gaudens and $20.00 Liberties in grades MS 63-65 are the coins of the season. These undervalued rarities have been disappearing from the market. Their availability has been dwindling since the beginning of 2007, but are still available. Getting the highest grade possible is the best way to assure return on your investment as the population of these rarities in high grade drops off significantly. Even though gold has reached record levels rare coins haven’t.

big gold

Both Liberty and Indian $10s and $20s are seeing bid jumps and record prices at auction houses with gold’s higher prices. The particularly exciting aspect of these results is the fact that rare coins lag behind gold’s movement, meaning there are a lot of buying opportunities even with prices moving up. We expect to see a continuation of this activity in 2008 as new investors flock to rare gold in search of better gains. Some of the more notable prices realized at auctions recently include a 1931-P $20 GSG in MS-66 ($126,500), an 1854-O $20 Liberty in AU-50 ($368,000), and a 1910-S $10 Indian in MS-66 ($82,800).

Gold Rush


The first “gold rush” in the United States was not in 1849, but 1828 in Georgia and North Carolina. The discovery of gold in southern Appalachia dates from 1799, when a 17 pound gold nugget was found in a creek near Charlotte, North Carolina by a 12-year-old boy. Mining in the area continued on a limited basis until 1828, when larger deposits of gold were located in two counties.

Templeton Reid, of Georgia, started the first private mint devoted to minting gold coins in the United States in 1830. He minted $2.50, $5, and $10 gold coins for only two and one-half months before closing his operation due to lack of public confidence in the gold content of his coins.

A much more successful enterprise was that of the Bechtler family of Rutherfordton, North Carolina. Metallurgist, gold and silversmith Christopher Bechtler and his son Augustus were recent German immigrants to Philadelphia. They moved to North Carolina in 1830, probably with the intent of being close to a readily available supply of usable gold. As with future enterprises in the West, miners in the area faced many obstacles when shipping their gold dust to Philadelphia for assaying purposes. Recognizing heavy demand as well as the potential for a good profit, Bechtler started an assay and coining business in 1831. The Bechtlers’ output was known for its well-assayed and honest coins. Their coins were so highly regarded that, in the Civil War, the Confederacy stipulated that fiscal obligations were payable in “Bechtler gold” rather than Union, state, or Confederate coins or currency. The Bechtlers struck the first gold dollar produced in America. The family closed their operations in the early 1850’s.