Commemorative Coins: Smart Investment Or Costly Gamble?

Commemorative coins are issued by mints to celebrate events of significant importance. They are usually beautifully designed and themed after admirable individuals, momentous historical events, or landmarks, making them attractive to collectors. However, they may not be considered a good investment. This is because their value is largely driven by supply and demand, and they are often marketed deceptively. This article will explore the topic of commemorative coins as investments, examining their value, the role of supply and demand, and the strategies of companies selling them.

Commemorative coins are often gold-plated, with a thin layer of gold that is less than the cost of refinement

Commemorative coins are often marketed as valuable investments, but they may not be a good choice for those looking to turn a profit. While they can be attractive display items, their value as an investment is questionable.

The same is true for "plated" and "layered" commemorative silver coins. The companies selling these coins use clever marketing tactics and loopholes in radio, print, and television advertising to make misleading claims about their value. They may also employ lawyers to protect themselves from fraud allegations.

It is important for consumers to be aware of these tactics and to understand that commemorative coins are not a good investment if they are looking to make a profit. The value of these coins is mostly in their collectability and aesthetic appeal, rather than any intrinsic worth.

If you are considering investing in precious metals, it is recommended to purchase genuine gold or silver bullion coins, or rare coins, which have an intrinsic value due to their purity and limited circulation.

They are not legal tender and are not accepted by banks, shops or businesses

Commemorative coins are not always a good investment. They are often marketed as such, but it is important to remember that they are not legal tender and are not accepted by banks, shops or businesses.

In the UK, for example, the definition of 'legal tender' is often misunderstood. Commemorative coins issued by the Royal Mint are classed as legal tender, but this does not mean they can be used in cash transactions. The term 'legal tender' means that UK coins can be accepted for payment of debts in court. However, only circulating legal tender coins can be spent and traded with banks or businesses. Banks, building societies and shops are not obliged to accept commemorative coins, and they rarely do.

The same is true of US commemorative coins. While the US Mint is the largest coin dealer in the world, purchasing coins directly from them is a risky business. Some commemorative coins contain precious metals such as gold and silver, but their value is largely dictated by supply and demand. When the US Mint first issued commemorative coins, the supply was virtually unlimited. While there are laws that dictate that only a certain number of coins may be minted, these limitations are rarely exceeded.

Commemorative coins are intended to be sold as souvenirs or collectibles, and their value is largely dependent on their rarity. They are often marketed as limited editions, but this is not always the case. For example, advertisements may claim that only a certain number of coins are left to purchase, without disclosing how many have already been sold. This gives a false impression of their rarity and can cause economic hardship for consumers who believe they have made a financially wise investment.

In summary, while commemorative coins may have some intrinsic value due to their precious metal content, their value as an investment is questionable. They are not legal tender and are not accepted by banks, shops or businesses. Their value is largely dependent on supply and demand, and their rarity may be exaggerated by sellers.

They are not a good investment strategy for the long term

Commemorative coins are not a good long-term investment strategy. While they can be attractive display items, they rarely appreciate in value. In fact, they often don't.

Firstly, commemorative coins are usually intended to be sold as souvenirs and are not meant to be used as currency. This means that they are not in circulation and are not easily traded. Banks and businesses are not obliged to accept them, and even if they do, it is at their own discretion.

Secondly, the value of a coin is determined by supply and demand. Commemorative coins are often issued in large quantities, and millions of people may own the same coin, forcing the value to drop exponentially.

Thirdly, the word "gold" is used deceptively by companies selling commemorative coins. These coins are often gold-plated and have a thin layer of gold that costs more to refine than the item is worth.

Finally, the authenticity certificates that come with gold or silver commemorative coins are meaningless. They are not officially affixed to the coins, so unscrupulous sellers can move them among different sets.

Therefore, if you are looking for an investment-grade coin, concentrate on high-grade, rare coins issued by the United States in the best grade you can afford. Numismatic coins, or genuine gold, silver, and rare coins, are a better investment option as they have intrinsic value due to being made from pure precious metals.

They are often sold on TV shopping networks for exorbitant prices

Commemorative coins are often sold on TV shopping networks for exorbitant prices. These TV shopping network "coin dealers" sell nice-looking commemorative coins for exorbitant prices. They are usually priced several times higher than if the coins were purchased from a reputable coin dealer.

These TV shows rarely sell anything that you can't acquire elsewhere at more affordable prices, so it is not advisable to impulse buy from these TV shows. It is always good to do a little research, and you'll see the same Silver Eagles at just a few dollars over the spot price from traditional coin dealers.

Uncirculated Morgan Dollars seem to be a prime product that TV shopping network coin dealers sell at an exorbitant price. They push these common coins as old and rare, when in fact, they can be purchased for a reasonable amount from a coin dealer or at a local coin show.

Another area that TV shopping networks feature in their coin shows is Proof sets and Uncirculated Mint Sets. They usually bundle these coins into ten, twenty-five, or fifty-year collections. They state that they are "rare" or "difficult to obtain" because they have assembled these sets into multi-year runs. Your local coin dealer can build a collection of Proof or Uncirculated Mint Sets for you at a fraction of the cost.

Therefore, it is always better to avoid buying coins from TV shopping shows.

They are more affordable than most bullion offerings

Commemorative coins are often beautifully designed and themed after admirable individuals, momentous historical events, or landmarks, making them attractive to collectors. However, they may not be considered a good investment due to their low gold or silver content and high production numbers.

One of the main appeals of $5 gold commemorative coins is their relatively low price compared to other bullion offerings. When gold traded around $1,800 in October 2021, a $5 commemorative gold coin could be purchased for about $460, while an American Gold Eagle or Buffalo sold for over $1,900. This makes $5 commemorative gold coins a more affordable option for those new to precious metals investing or those who don't want to spend a large amount on a single coin.

The lower price of $5 commemorative gold coins also means that collectors can purchase multiple coins without breaking the bank. With new designs released each year, collectors can add variety to their collections at a reasonable cost. This annual variation allows collectors to acquire coins commemorating significant individuals, events, and moments in American history that are of interest to them.

In addition to their affordability, $5 commemorative gold coins can sometimes have values that exceed their intrinsic worth due to factors such as popularity, varying mintage numbers, or collectibility. For example, a 1997 Jackie Robinson commemorative coin in MS70 condition could be worth around $2,250, which is more than the value of a 1 oz bullion coin.

Therefore, while commemorative coins may not always be a good investment due to their low precious metal content and high production numbers, $5 commemorative gold coins stand out for their affordability, variety, and potential for increased value due to their collectibility.

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