Expert: Joe Hylas - 12/18/2011

Question
Hi Joe,

I have read that due to legal exemptions and its collectible status, pre-1933 US gold can never be confiscated by the government like other forms of legal tender.
Would this make buying pre-1933 US Gold or gold coins a better investment than other forms of gold in the event of another depression or dollar crash?
If there are other forms of gold that are better to invest in during bad economic times, would you please advise?

Thank you very much.

Mike E.

Answer
Hi Mike,
As I understand the law, pre 1933 U.S. gold coins that trade for a premium in excess of 20% over the intrinsic (melt) value are deemed collectible and hence can not be confiscated by the U.S. gov't.
But, when gold was recalled in the 1930's, the surrender was VOLUNTARY, not mandatory as many believe.  Coins are actually the property of the issuing government, so I highly doubt that the U.S. government would have any legal basis to "confiscate" coins issued by a foreign government.

Right now, I am advising clients to acquire gold that carries the lowest premium over melt value.  American Eagles and Canadian Mapleleafs traditionally trade for about 5% over melt value.  Krugerrands are about 3% over, bars are even cheaper.
Get the most gold for your money and don't worry about where it was made.  That said, stick with major producers such as Engelhard, Johnson Matthey, Credit Suisse, Pamp Suisse, etc. or one of the major coins as stated above.

Good Luck,
Joe Hylas
Omega Precious Metals
www.AllCoins.US