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Bullion Appeals to Investing Collectors

April 24, 1986|DON ALPERT

One of the adjuncts of numismatics is the bullion coin. The conventional coin hobbyist collects coins in series or by countries or denominations. They are treasured for their rarity, condition and beauty. Many investors find them attractive because virtually all denominations have shown growth potential and profitability.

So where does bullion fit in? Unlike collector pieces, bullion appeals to investors who wish to diversify their portfolio. These silver and gold pieces are guaranteed by the government of origin to be of a certain fineness and purity.

For years, the leader in gold bullion coins has been the South African krugerrand. Last year, it was replaced in popularity by the gold Canadian Maple Leaf (pictured).

Sallie Storey, Maple Leaf sales manager for North America, discussed the Maple Leaf's success recently.

"Sales are going very well," she said. "It's safe to say we're keeping pace with last year (when 1.878 million ounces were sold). The United States has always been our biggest market. Investors like it because it's an international investment. They're buying a tradeable unit, and they know who stands behind it--the weight, fineness and legal-tender value.

"Investors are also concerned about liquidity. Well, if you buy a Maple Leaf in Los Angeles, you can sell it in New York. It's probably the most liquid investment you can make. It's a small business-investment product with a high degree of recognition," she said.

But what about the criticism that gold bullion doesn't earn interest?

"This is a question that doesn't come up in other countries," she said. "The motivation for purchase is preservation of assets. It's a good security to have. Gold is not sold as an investment to stand on its own. It's part of investment strategy. The percentage in an individual's holdings is personal."

With the krugerrand having fallen into disfavor because of political concerns over South Africa's racial policies, is there concern that other countries, particularly the United States, will fill the breech?

"A number of countries besides the United States are considering bullion coins," she said. "Australia, Luxembourg, maybe Mexico. We welcome the participation of other people. It's healthy for that sort of investment. Perhaps we'll lose part of the market, but the world needs a second major contributor. Happily, we're entrenched in the United States and doing well in Europe and the Far East. It's good news for the investor, really. Investors should be cautioned to have a product that is internationally liquid."

Most coin dealers sell silver and gold bullion. The Maple Leaf comes in one-, one-fourth- and one-tenth-ounce sizes. Prices vary daily, depending on the spot price in the marketplace. Who knows, a visit to a dealer might also kindle interest in numismatics.

Question: While in Japan just after the war, a young Japanese friend gave me three old coins. I have not been able to determine a value for them. Perhaps you can help. The coins are an 1896 50 sen and an 1870 50 sen and a 1730, value undetermined, with a square hole in the center.--R.M.McK.

Answer: The 50-sen pieces are worth about $7 to $10 each; the older coin is worth about $5.

Q: I have seven Apollo coins encased individually in a plastic container. Could you tell me the value? They are in mint condition. They are the Lunar Explorer series and weigh four ounces each.--E.F.K.

A: Your medals are worth about 15% more than the spot price of silver, which fluctuates daily.

Q: Please advise if the enclosed copy of a $1,000 bill from the Bank of the United States dated 1840 has any value.--L.T.L.

A: Sorry, your bill has little or no collector value.

Coin Letter

My father, Ronald Russell, along with Donald Medcalf, published a book on "Hawaiian Money" in 1978, and I am enclosing a copy for your future reference. Even though the pricing is now obsolete, a great deal of research was done by the authors. . . . The 1881 nickel you refer to (April 10) was never adopted as Hawaiian coinage, but instead a relatively small quantity was produced and given to King Kalakaua as part of a proposal. They were only patterns and the authentic pieces were quite valuable. Unfortunately, additional pieces were produced at a much later date in other metals and are considered to be counterfeit.

KEITH D. RUSSELL

Rancho Palos Verdes

Thank you so much for this important reference book. I'm sure it will come in quite handy in years to come.

Coin News

The recent sale of the Levine, Leidman and Dreyfuss collections by Auctions by Bowers and Merena produced some interesting results. An 1854 Type II gold dollar, for example, in extra fine condition, sold for $4,300. A proof-65 1877 nickel 3-cent piece brought $2,530, while a 1938 proof set, graded proof-65 or better, fetched $3,080. (Prices reflect a 10% buyer's fee added to the hammer price.) Individual catalogues for the Levine, Leidman and Dreyfuss sales are $10 each from Auctions by Bowers and Merena, Box 1224-NR, Wolfeboro, N.H. 03894.

Don Alpert cannot answer mail personally but will respond to numismatic questions of general interest in this column. Do not telephone. Write to Your Coins, You section, The Times, Times Mirror Square, Los Angeles 90053.

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