World’s Largest Coin Sale Proves Collectables are Out
Collectables as investments are out. The worlds largest gold coin, a highly collectable chunk of gold, sold at auction this week for nothing more than its melt value. This just goes to show that investors could care less about value added.
All Over the News
I opened my Wall Street Journal to a view of the coin up for auction. I logged online to see thousands of articles about it after the sale. I also noticed that while some bloggers are claiming this marks gold’s top, or the end to collectable coins, what I’m seeing is that recessions erode any collectable value to precious metals.
Sold at Spot
The 100 kg, 220.5 lb, coin was sold at auction for just $4.02 million, its melt price, indicating that those at the auction cared only about the gold and not the shape of the gold. The coin, actually extremely rare, was part of a 5-coin production from the Candian mint to show off its newest mint. So, while the coin was in fact 1 in the entire world, collectors cared only about the gold.
Collectables Aren’t Worth Anything if You Can’t Eat
This confirms my long held belief that collectables make great investments but only if you can create an endless bull market. Whereas stocks may plunge 50% in a deep recession, collectables can drop to practically nothing. In this case, the gold coin that was previously sold well above spot only managed to fetch spot price at auction. Auction attendees practically through up a giant middle finger at the ultra-rare coin, indicating that the coin is worth no more in its current form than 220.5 lbs of gold fresh from the ground.
Oh, by the way, here’s what it looks like
