Looks like Fred's been trying to melt down the coin.

The Priceless Coin is an item found in Waterloo World in Psychonauts. This is given to the second Peasant as a payment by Razputin to fight for Fred's army. This item can be found in the firepit of the room that Fred and Napoleon are playing Waterloo. The item can be obtained by using Telekinesis to pull it out of the fire.