Gold investors worry about confiscation during an economic crisis due to President Roosevelt’s Executive Order from 1933, calling in gold coins and bullion for seizure while exempting “gold coins having recognized special value among collectors of rare and unusual coins”.
However, this exemption has been exploited by telemarketers to sell old European coins at significant markups compared to bullion coin prices.
Gold Coins
Retail investors of precious metals often fear government confiscation of their holdings; after all, when investing in gold to hedge against economic and monetary crises, you wouldn’t want the government taking your savings away from you without justification.
Though the threat of confiscation may seem remote, history speaks otherwise. A notable instance was during Roosevelt’s presidency in 1933 when Executive Order 6102 demanded citizens turn in gold coins, bullion, and certificates or face confiscation.
Good news is that this gold confiscation only targeted bullion coins; not collectors’ coins sold by telemarketers at 20%-30% premiums over spot price of gold. Bullion coins have standardized weights such as one troy ounce; thus making them unlikely to be confiscated or melted down unless caught in an unfortunate circumstance; but keep in mind that most countries have international agreements and treaties that prevent confiscating or melting down precious metals like this one.
Gold Bars
People purchase gold as an investment to protect themselves against inflation. Though we no longer exist on a gold standard, history teaches us that government could seek to confiscate assets like gold in times of crisis as a means to pay off debts.
Gold bars (also referred to as gold bullion ingots or golden ingots) are refined metallic pieces made of the precious metal that come in any size or shape, usually offering more affordable and space-efficient solutions than buying coins which may be considerably more costly per ounce.
The belief that certain forms of gold cannot be confiscated originates in an Executive Order signed by President Roosevelt during his 1933 call-in of gold reserves. Roosevelt specifically exempted “gold coins having recognized special value among collectors of rare and unusual coins”, yet failed to outline this provision further. Telemarketers propagate this myth so as to more easily sell high-priced coins.
Gold Bullion
Gold confiscation is one of the primary worries among many gold investors, which is understandable given that history shows governments can seize private citizens’ gold to shore up reserves during times of crises.
However, modern history will likely never witness another “gold standard crisis”. Central banks no longer rely on physical gold for managing economic crises allowing more flexibility when handling crises.
As most past gold confiscations actions targeted coins and bars instead of jewelry, bullion products offer the safest investment option if you are concerned about government confiscation. Furthermore, bullion bars allow investors to hold more value per square inch than coins or rounds which require special cases for storage; an important consideration when storage space may be limited.
Gold Jewellery
Assuring against currency collapse by purchasing gold is a wise investment decision, yet many people worry that governments will confiscate it during times of turmoil and crisis – one such instance occurred in 1933 when Roosevelt signed Executive Order 6102 banning ownership or trade of any gold bullion or coins.
Gerald Ford closed this loophole in 1974; however, telemarketers still promote the myth that rare US coins cannot be confiscated to help sell expensive and high-priced coins more quickly and efficiently.
Truth be told, most bullion distributors who claim that gold cannot be confiscated use high-pressure sales tactics to lure investors into their business. While no individual’s gold can never be taken by government due to national laws differing, some distributors might make this claim in order to attract potential investors into purchasing their product.
