As a precious metals investor, you may heard much about numismatic and "semi-numismatic" coins, particularly the St. Gaudens $20 double eagle gold coin. While coin collecting can be an interesting hobby, it is not necessarily related to metals investing. Coins of this type vary in value with the ebb and flow of the collector market and are not strictly tied to metal value. Also, these coins often go for much more over spot price than bullion coins.

One of the concepts that gets bandied about quite a bit is the idea of U.S. government confiscation. While it is true that the U.S. government did have a gold recall in 1933 by executive order of FDR, gold coins of a significant value over gold value were not subject to this recall. Many dealers use this to imply that in the event of another confiscation these older coins would fall in this category in order to sell these types of coins to the unsuspecting or newer metals investor. However, the confiscation issue is a red herring for several reasons:

• The dollar was backed by gold in 1933 and the recall was designed at least in part to stop the run on banks; the dollar no longer has any metal backing.
• St. Gaudens $20 coins in almost uncirculated to mint state conditions are still very common even considering their age due to decades of mass storage in European bank vaults.
• There is nothing that states that numismatic items could not be confiscated in the event of another recall; the original executive order no longer has any force of law.
• Gold is no longer used in regular-issue U.S. coinage (the American Eagle gold coin, although it has a face value, does not count) and is typically used only in jewelry and privately-held investment vehicles such as bars and bullion coins which would be harder to recall and account for. The majority of recalled gold coinage in 1933 was housed in bank vaults.
• As gold is no longer used as a monetary instrument by the U.S. government, confiscation is unlikely in any event.

Now, you may be wondering about silver in regards to this as well. Silver held sway as coinage for longer than gold, and some silver coins can still be found in circulation. However, silver has never been subject to confiscation, and its status as an important industrial metal gives good reason to believe that there will never be a silver recall.

90% and 40% silver U.S. coinage is still widely available, and although it sounds contrary to what I stated above, these coins are a good value - as long as they can be bought at near silver spot or less. This is an important distinction to make, as old silver coinage (often referred to as junk silver) often carries very little to no value as a collector item over the metal value. These coins, if anything, are semi-numismatic, but don't bank on collector value.

In short, if you approach this from the perspective of a metals investor never look at a coin for collector value. Collector markets are often hard to get a pulse on, and numismatics are much more illiquid than their bullion counterparts. If you're paying more than spot plus a modest premium, you're paying too much.