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All Posts Tagged With: "Gold investing"

The Legacy of the Swiss Helvetia Gold Coin

The Swiss Helvetia (1897 – 1949) embodies Switzerland’s status as a financial center of the world. The coin’s long standing reputation among investors and collectors illustrates its outstanding beauty and quality. The Swiss Helvetia, like other European gold coins, has a rich and lengthy heritage.

Ancient Origins

The name “Helvetia” comes from the name of Switzerland during Roman times. Julius Caesar conquered the Helveti in 58 BCE, but the name for the currency was resurrected during the Helvetic Republic, when a standardized coinage was reestablished. Prior to 1798, approximately 75 different entities were minting coins in Switzerland. Each entity had its own corresponding monetary system, so there were at least 860 circulating coins in the country.

The Helvetic Republic lasted from 1798 to 1803. Its goal was the unification of the numerous cantons of Switzerland. During that period the government introduced a normalized currency based on the Berne thaler. These francs were equal to 1.5 French francs. Although the Helvetic Republic soon ended, the new monetary system served as a model for various cantons in the newly formed Swiss Confederacy.

Currency in Transition

The country’s regions readopted their individual currency systems, with some modifications. Between 1803 and 1850, approximately 22 cantons minted coins, but less than 15% of the circulating currency was local. The remaining 85% was foreign, acquired during Swiss mercenaries’ exploits. Private banks started printing currencies to supplement coinage. By 1848 the Swiss monetary system included over 8000 different currency types. This trend of accepting foreign money has endured to this day; many businesses in Switzerland still accept international denominations as payment.

The Swiss federal governments sought to end this complication with a new Federal Constitution of 1848, which specified that only the federal government could produce and issue money. Two years later the first Federal Coinage Act made the franc the official monetary unit for Switzerland. The franc would replace any other currency used by the various cantons. The term “Helvetia” resurfaced as a name for the franc, recalling the country’s ancient origins.

Since 1850, the Swiss Helvetia has undergone only one devaluation, in 1936. The coin’s value dropped 30%, along with that of the US dollar, the British pound, and the French franc. Like the rest of the industrialized world, Switzerland chose to abandon the gold standard that year. The value of the Swiss Helvetia has remained strong ever since.

Swiss Helvetias as Investments

Sometimes called “Vrenelis” after their obverse design, Swiss Helvetias minted in the late nineteenth and mid-twentieth century have gained popularity among investors. Their exquisite design and outstanding condition make them a natural choice.

On the coin’s obverse is a portrait of “Vreneli” the fabled “Swiss Miss” of the Alps. The reverse features the Swiss Coat of Arms and the wreath of the Republic. They are generally available in brilliant uncirculated quality. The excellent luster and engraving of the Swiss Helvetia supplement the coin’s intrinsic value. Investors who seek a unique and historical precious metal will find the Swiss Helvetia a wise and interesting addition to their portfolios. (more…)

Coin Market: Generics slow to match gains of gold, silver

By Steve Roach – Rare Coin Market Report
First published in the November 8, 2010, issue of Coin World

Some of the coins that one would expect to rise such as generic Mint State Morgan silver dollars and Coronet and Saint-Gaudens gold $20 double eagles are showing only minimal gains, although they are trading at high volumes.

On Oct. 14, gold hit a historic high London AM fix price of $1,380.75 an ounce, and during intraday trading that day reached a record $1,388.10.

The same day the U.S. dollar sunk to lows not seen since January upon news that Federal Reserve Chair Ben Bernanke indicated that another round of government monetary stimulus funding may be necessary to revive the U.S. economy.

As silver continues to flirt with $25 per ounce, MS-63 through MS-65 Morgan dollars – the bread and butter of the generic market – are showing some upward movement in price, with several dealers paying more than wholesale “ask” prices for MS-64 and MS-65 dollars, as long as they are “white or white-ish,” to fill large orders from retailers.

Retail prices may increase soon in kind, although some collectors will likely elect to sit out the silver coin market for a while, hoping that the price of silver declines and their wanted coins return to more affordable levels.

As an example, when a common silver quarter dollar is trading for almost $5, many collectors are in no rush to buy.

Circulated silver dollars are showing even more action, with several wholesale dealers paying $22 for Extremely Fine pre-1921 Morgan dollars and $29 for uncertified Mint State examples.

As the public continues to sell these coins to dealers in record numbers, a steady supply is created that should keep prices from escalating rapidly.

Prices for generic gold coins continue to lag behind gold’s ascent and most issues show modest if any price increases. Those prices still have not come close to the levels seen at the beginning of the year, despite the fact that gold is now 25 percent more expensive.

An increased supply of these coins is entering the marketplace, keeping prices in check, at least for now.