Lear Capital has acquired an 80.39-ounce gold bar that was assayed in 1933 — tested to determine its ingredients and quality — by Léo Matthey, a descendant of the famous Matthey assaying family that founded the prestigious firm Johnson Matthey, according to Kevin DeMeritt, founder and chairman of the Los Angeles-based precious metals firm.
Lear Capital is willing to sell the bar for around $197,000 at today’s spot gold prices for that quantity of gold — if the right buyer emerges.
“This is a rare piece of history,” Kevin DeMeritt says. “We’re giving an incredibly good price on this bar, but would love to sell it to someone who appreciates the history and wants to hold on to it for its historic value.”
A Symbol of a Landmark Era in U.S. Monetary Policy
The gold bar is stamped with a pine tree, which was the issuing company’s logo, and the number 33 — its serial number, indicating it was the 33rd bar the manufacturer poured, DeMeritt says.
The purchase includes a certificate of authenticity, which lists its 80.39-ounce weight in grams as 2,500.50. The document also contains information such as the name and signature of the essayeur juré, or sworn tester, Léo Matthey, and the date the item was assessed, May 2, 1933, in Switzerland.
The bar was produced at a very interesting time in gold’s history. In 1933, the U.S. was still operating on the gold standard, with the government required to have an amount of gold on hand that was equal to 40% of the value of the U.S. dollars that were issued. Dollars could be converted into gold at a fixed price of $20.67 per ounce.
In 1933, though, a growing preference for gold over bank deposits or paper currency began to increasingly chip away at the Federal Reserve’s supply. In addition to Americans vying for gold, some foreign nations that were concerned about the U.S. dollar becoming devalued also opted for the precious metal.
The drain on the government’s gold resources grew so severe that in March 1933, the Federal Reserve Bank of New York wasn’t able to convert currency to gold. In April 1933, President Franklin D. Roosevelt instituted a national banking holiday and restricted the private use of gold, instructing Americans to turn in any items they owned that had a value of more than $100 — which equated to about 5 troy ounces — in exchange for paper currency.
Background on Lear Capital’s Bar
The purity level of the bar Lear Capital has obtained is listed as 1,000; Lear Capital says due to today’s more precise technology, the fineness would actually be 0.999 — above the 0.995-or-greater threshold gold assets must meet to be eligible for inclusion in a precious metals-backed IRA.
“The government has made these rules that it has to have a fineness to it,” Kevin DeMeritt says. “If it has that quality, you can add it to an IRA. If it does not, then you cannot add it — [unless it’s] an American Eagle [coin], which the government made an exception [for].”
Well-known precious metals assayer Johnson Matthey traces its origin to Percival Norton Johnson, who, on his wedding day in 1817, founded the company that became Johnson Matthey, according to the company.
Initially, the business focused on providing gold assaying services; it later entered the platinum market when it began refining impure imported Brazilian gold, which produced palladium as a byproduct.
The contributions that George Matthey made after initially coming on board as an apprentice at age 13 inspired Johnson to make Matthey a partner in the company, which was then renamed Johnson Matthey in 1851.
In 1852, the firm was appointed to be an assayer to the Bank of England — a high accolade at the time — and was also asked to make plates for the annual Trial of the Pyx, a test of the weight and fineness of gold and silver coins the Royal Mint issued.
Johnson Matthey’s gold and silver refining business was sold to industrial company Asahi Holdings in 2014, in a move that the company’s chief executive, Robert MacLeod, said was “in line with our long-term strategy to focus on areas where we can use our expertise in chemistry and its applications to deliver high technology solutions or that provide a strategic service to the wider Johnson Matthey group.”
Today, the organization’s work involves developing and manufacturing catalysts for the automotive, energy and chemical industries that are used to speed up chemical reactions; licensing chemical process technologies that help produce sustainable fuels and chemicals; and other platinum group metal-related chemistry endeavors.
The Appeal Gold Bars Can Offer
Collectors and investors are sometimes interested in precious metal coins because of their intricate details and unique appearance. While gold bars may have a more simplistic design, items like the bar Lear Capital recently purchased can be sought after due to their unique heritage, as well as their precious metal content — particularly in recent years, due to gold pricing activity.
The annual demand for gold — driven in part by the demand for gold bars and coins — grew by 18% in 2022, according to the World Gold Council. Gold investment-related demand, specifically, rose 10% between 2021 and 2022.
In 2023, factoring in the demand from sources such as the OTC markets, the total demand for gold reached a new annual record of 4,899 tons. World Gold Council research also showed the average price of the precious metal rose 8% to $1,940.54 an ounce — another record.
Some of the demand in recent years has come from central banks, according to Kevin DeMeritt, who have been enthusiastic gold buyers.
“Central banks entered the market in 2022,” the Lear Capital founder says. “They purchased a quarter of all the mining supply, which is just absolutely a huge jump from where they were purchasing. They continued to buy into 2023.”
The large amounts banks tend to purchase can potentially impact gold’s availability, Kevin DeMeritt says.
“They’re not speculators; they’re not day traders,” he says. “When they purchase, they hold that metal for 10, 15, 20 years at a time. That metal is gone, and you’re not talking about small amounts.”
In recent months, gold prices have reached remarkable levels. In December, spot gold prices surpassed $2,135 per ounce; they then topped $2,300 per ounce on April 4, 2024.
The interest in the precious metal is likely to continue, Kevin DeMeritt says, because, in addition to other factors, some investors appreciate the tangibility physical precious metal assets like gold bars can provide.
“You’ve got all these third-party risks when you own [gold] stock or an exchange-traded fund that you do not have when you own the physical metal,” he says. “If you have possession, it’s a bear-type of investment; it’s yours. What are the central banks holding? Gold — because they understand paper and the digital [currency] could potentially go away; it has in the past. They need something that’s physical and worth value.”
