An eager buyer sees off competition from a roomful of other hopefuls. In the end they buy a $3 coin... for a whopping $1.3m.
The $1.3m coin sells to rapt applause and great excitement among the audience.
 Just as 19th century prospectors used |
This is exactly what happened this week. Not in a parallel universe but in Chicago, US.
And, despite international talk of economic recession and woe, scenes like this are commonplace in the collectibles markets.
So, why on earth would somebody spend $1,322,500 on a $3 coin? And then be applauded for their efforts...?
Well, it was no ordinary coin. In fact this coin helped changed history in the United States forever...
Beating the banks
Back in the late-19th century, gold dust was the medium of exchange in California.
But individual prospectors typically received less than half its real value. Likewise, local bankers would only buy gold at a major discount.
People soon became tired of this, and private individuals and small companies took the initiative where the Federal Government had failed.
They produced their own currency. And the result, among other coins, was the 1855-S Proof Three Dollar Gold Piece.
This is the same $3 coin which sold for $1.3m in Chicago.
It was billed as 'any serious collector's dream' by auctioneer Heritage in the run up to the sale.
History vanished... and rediscovered
Then the 1855-S Proof Three Dollar Gold Piece all but vanished. Most numismatists even left it out of their books on coins from the era.
That is, until 1984 when the coin appeared at the famous Apostrophe Sale. And news of a second example also emerged, of which nothing is known except it is in a 'private collection'.
In other words, until definitive proof of the existence of the privately owned 1855-S Proof Three Dollar Gold Piece emerges, this $1.3m coin can be regarded as unique.
 Coveted coin: the $1.3m 1855-S Proof Three Dollar Gold Piece |
Put simply, this coin meets my three main criteria for spotting a top collectible:
- Quality
- Rarity
- Provenance.
And these factors were proven by its final sale price of $1.3m.
Leaving interest rates for dust
So, I've described how this coin helped prospectors beat the banks during the 19th century California gold rush...
But how is it helping collectors 'beat the banks' today?
Well you only have to look at the news: historically low interest rates in the UK have now been at the same level for 2-3 years.
And The US has announced it is keeping interest rates at 0.5% until at least mid-2013.
Now compare this to the index tracking the value performances of collectible gold coins. That went up by 300% between 2000-2010.
In other words, the buyer of the (potentially one-of-a-kind) 1855-S Proof Three Dollar Gold Piece has a great investment-grade coin in their possession.
Suddenly, the idea of a $3 coin selling for $1.3m to a room of rapt applause doesn't seem so crazy after all does it?
To find out more about how you can benefit from investing in the gold coin markets, view our special pages here.
Or please contact our experts for a free consultation at:
+44 (0) 117 933 9500
info@paulfrasercollectibles.com
All the best, until next week
Paul
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