What Is Provenance For Coins

Have you ever wondered whether a gold coin you saw on the market was authentic? Authenticity is often a critical concern for gold investors or those looking to add to their coin collection. 

One of the best verification options for gold coins is to look into its provenance. The provenance of a coin serves as a record that shows the coin is an authentically minted item. 

We'll explore how provenance works in this guide (please note this article is for educational purposes, not financial or investment advice). We'll also detail a famous example of when provenance made a coin's value skyrocket!

Provenance: A Coin's Lineage Record

Provenance is essentially a documentation of a coin's ownership, going all the way back to its minting. You can think of it as a family tree for a particular coin.

That may sound strange. After all, who cares about the origin of a coin? 

There are a few reasons why a coin's pedigree matters. First, it verifies a coin's authenticity. This factor is especially important for very old coins. 

For example, consider coins from Ancient Greece or Rome. If these coins are authentic, they have a heritage that spans thousands of years. They've often been part of famous collections through the years. 

Knowing that coin's background makes it much more valuable to numismatic enthusiasts. It has an ancient legacy, and that history makes the coin far more valuable than its precious metals content alone. 

It may seem more obvious that these ancient coins would need that sort of background chain. However, American coins have been around for a significantly shorter period of time. Is their traceability all that necessary?

Why You Need Provenance For American Coins

American coins may not be as old as something like an Ancient Athenian drachma; however, these coins can also have a really interesting history that make them significantly more valuable. 

One example of this might be coins from the Civil War, such as the Indian Head Cent. The Civil War is one of the most defining moments of the American identity. Many patriotic numismatists love coins like these because they offer a tangible connection to that history. 

Counterfeiters are aware of that interest and try to create fake imitations of valuable coins. Knowing that counterfeits exist makes it so beneficial to know a coin's origin before you purchase it. 

However, pedigree can matter beyond safeguarding from fraud. Some coins can have tremendous value because of their immense history. As evidence of that point, we'll examine a case study that shows how crucial provenance can be. 

Case Study: The 1933 Saint-Gaudens Double Eagle

The 1933 Saint-Gaudens Double Eagle is one of the rarest coins ever to be minted. The Saint-Gaudens Double Eagle ran in U.S. circulation from 1907–1933. It was commissioned by President Theodore Roosevelt to beautify American coinage. 

Description of the Coin

Many would say that Roosevelt's coin succeeded. The Saint-Gaudens Double Eagle is a stunning coin that closely follows the earlier American coinage tradition depicting Lady Liberty. 

Obverse:

Lady Liberty standing with one foot on a rock with the sun behind her, symbolizing the entering of a new era of independence

Holding a torch in her left hand, symbolizing intelligence and wisdom

Holding an olive branch in her right hand, symbolizing peace and prosperity

Reverse:

Bald eagle in flight with the sun below it, symbolizing American freedom

Top of coin bears the inscription UNITED STATES OF AMERICA TWENTY DOLLARS

Bottom of coin bears the smaller inscription IN GOD WE TRUST

What Happened in 1933?

In 1933, President Franklin Delano Roosevelt prompted an incredible shift in American currency. At the time, the Great Depression was in full swing throughout the country. Prices were low in many places, but the overwhelming unemployment crisis made people unwilling to spend money. 

As a result, many people hoarded their money. The only currency that people believed in was gold. In an effort to improve the situation of the U.S. dollar, President Roosevelt halted the payment or hoarding of gold in any form. He also placed an embargo on the export of all gold. 

As a result, the U.S. Mint could not circulate their 1933 issues of the Saint-Gaudens Double Eagle. Experts believe perhaps 20 of these coins escaped the Mint, but they still could not be used as currency in the U.S. 

This forbiddance was made law with the Gold Reserve Act of 1934. This law was the first step toward creating the system of fiat currency we use today. 

The One Escaped Coin

Somewhere along the way, one of those escaped coins made its way to King Farouk of Egypt. The young king was a massive spendthrift with a huge penchant for gold coins. He acquired a Saint-Gaudens Double Eagle from an American diplomat.

In an interesting twist, King Farouk was deposed by Egyptian military leaders who were skeptical and cautious of the outside world. They auctioned off many of King Farouk's possessions, including this American gold coin. 

In 1996, that coin returned to the U.S. by means of an English coin dealer named Stephen Fenton. When he arrived and wanted to sell that coin, the Secret Service became aware of it and arrested Fenton for possessing what they could only imagine was a stolen American artifact. 

In an interesting twist, Fenton managed to win his legal case by demonstrating the coin's acquisition history. Once he did so, he was allowed his freedom and the right to sell the coin. 

That coin sold for 7.59 million dollars. At the time, it was the highest price ever earned at auction for a single coin. The record remained unsurpassed until its owner, Stuart Weitzman, sold the coin for $18,872,250. 

Find Coins with Provenance

The Saint-Gaudens Double Eagle is the perfect case study for demonstrating how critical provenance is for coin collectors. Without a clear provenance, the 1933 Double Eagle might have been confiscated instead of becoming the most expensive coin ever sold. 

It's the best way to guarantee your coin is a legitimate item. For this reason, it is best to purchase collectible coins from trusted dealers. This practice is especially important for high-value coin acquisitions. 

If you have acquired coins that you do not have an archive for, it is best to get an appraisal of its authenticity and value from trusted sources. This appraisal can affirm your coin's value absent coin provenance. 

Before buying a high-value coin, ask for whatever provenance and documentation the seller can provide: auction records, appraisal notes, or previous collection listings. This information can give you peace of mind regarding your collectible coins.