A New World's Record: U.S. Gold Coin Brings $7.5M News Article No. 002  07/03/2003 10:00 PM EST

NEW YORK (FK) - Proving that rarity and quality are the ultimate combination, the infamous 1933 $20 Saint Gaudens (Double Eagle) was sold at auction by Sotheby's auction house for an astounding $7.5 million.

The price paid is the highest ever for a rare coin and instantly make this the most famous and most expensive coin in the world.

The coin was the subject of great controversy. U.S. $20 gold coins were minted from 1850 to 1933. But the 1933 specimens were never released for circulation because of President Roosevelt executive order that same year that removed the United States off the gold standard.

All of the 1933 $20 U.S. Gold coins struck were believed to have been melted by the mint and gold yielded, transferred to Ft. Knox.

However, it has been speculated and rumored for the past six decades that one or more examples were smuggled out of the U.S. Mint before they were melted. Some numismatic historians believe this coin was not smuggled but was in fact given as a gift by mint officials to King Farouk, Egypt's last monarch. Farouk is one of the last century's most famous rare coin collectors.

This coin re-emerged in 1996 and came into the possession of Stephen Fenton who is a well known and respected rare coin dealer based in London, England.

Fenton smuggled the coin into the United States and was apprehended with the coin after attempting to sell it to undercover Secret Service agents in New York. Since the origin and the legality of this 1933 Double Eagle was clearly clouded and in question the U.S. Government agreed to an out-of-court settlement with Fenton last year. The terms of which mandated the sale of the coin at auction and proceeds to be split. Fenton also agreed to also pay an additional $20 cash back to the U.S. government in order to balance the books.

The sale price includes $6.6 million for the U.S. government, a 15 percent commission for Sotheby's and the coin's $20 face value.

This sale is an important turning point for rare coin collectors and investors. It shows that serious money is making its way from Wall Street back into hard assets and collectables. Rare coins are being considered viable investment vehicles after being out of favor for more than a decade. There are many extremely rare coins that can be obtained in superb, Gem Uncirculated condition for as little as $5,000. Many great rarities in superb condition are still available for well under $50,000 a well. Based on this latest sale, this may not be the case for long.