Rare coins sometimes prove to be a golden investment

Inflation fears.

War in the Middle East.

A weakened dollar. Rising gas prices.

Sound familiar?

This scenario is what occurred when gold prices briefly touched more than $850 per ounce in 1980. For the year, the price of gold averaged $675 per ounce.

“Every time the people lose faith in money and the stock and bond markets because of inflation rates, they believe that gold and commodities in general are hedges against inflation,” said Mahmoud Haddad, professor of finance at the University of Tennessee Martin.

But owning gold or silver bullion can be expensive. Most investors must pay someone to store their metal ingots, which can erode an investor’s return over time.

That’s why some investors turn to gold, silver, platinum and other precious metal coins to battle world turmoil and economic uncertainties, said Scott Travers, author of The Coin Collector’s Survival Manual.

“Coins can see a much greater bounce (in price) than the metals,” said Travers, who also is a former vice president of the American Numismatic Association. “If gold goes to more than $1,000 an ounce, the right coin could easily be a $5,000 coin.”

Precious metals coins appreciate in price because of emotional concerns, popularity and the coin’s intrinsic value determined by the amount of metal contained in the coin.

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