As curator of the critically-acclaimed exhibition ‘Coins of Islam: History Revealed’ at Abu Dhabi’s Sheikh Zayed Grand Mosque – which showcases one of the world’s most significant collections of Arab and Islamic coinage ever assembled – Dr Alain Baron knows a thing or two about the investment potential of gold coins. We asked him to elaborate…
How would you explain to the layman why the price of gold reached a seven-year high recently?
It comes down to the financial instability we are experiencing at the moment due to the coronavirus, and the havoc it is wreaking on the markets. Tangible assets are one of the few safe havens – and gold has always been the king of tangible assets. Everyone is moving to gold now to protect their capital.
What first drew you into numismatology?
My story with numismatics dates back to when I was only five years old. I went for a walk with my father in a Medieval city in Switzerland and I saw a showcase with historic coins inside. I asked my father how it was possible that coins could be so old. Enjoying my passion and curiosity for the subject, he bought me a coin, which I still have today, and that was the start of everything.
What advice would you offer to someone thinking of gold coins as an investment opportunity?
If you want to buy gold coins purely for investment purposes, then you should look towards bullion gold coins, which are those struck by the government from about 200 years ago until the present day. Bullion gold coins have proved to be a first-class tangible asset if you buy the premium over gold low enough, which means the price you pay over gold is small.
In times like these, when everyone wants physical gold, the premium over gold is growing, so there’s a double leverage aspect – you invest in gold which is going up and you invest in the premium, which is going up too.
Is the appeal more about passion – about owning incredible little pieces of history – or about returns on financially lucrative investment?
When we are talking about numismatics, which is closer to the world of art, and you are buying coins that are 1,000 or even 2,000 years old, it should be about passion first and foremost. This can turn into a lucrative investment, provided that you buy very high-end, high-quality quality coins.
How would you advise our readers to embark on a collection?
Anyone wanting to get into collecting coins should start by defining a topic that is close to their heart, whether that is Roman history, the history of wars, fashion in coins, portraits of women in coins, etc. Coins can cover most topics you can think of, so think of something you are interested in and buy the best in terms of quality and rarity.
Are there a lot of fakes “out there”, and how do you avoid them?
Yes, unfortunately there are some fake coins in circulation, which is why you should only buy from experts that can give you a guarantee. There are also third companies that give sealed authentications: they seal your coin, put it in a plastic slab and they put a grade on it that guarantees authenticity and describes the quality of the coin.