Gold coins.. hypothetical question

Miscellaneous and Personal Stuff I Must Share
1

{hypothetically}

My old Uncle Pete died. (Peaceful like)

He left me 10 gold coins. I had them checked they’re real(Uncle Pete was a rascal, you just never know).

Oops. All my bills are due.

Now, looky. I got all this gold. Would any credit card or utility take actual gold to satisfy my debt?

Or am I tasked with selling the gold for dollar bills? Probably getting ripped off.

I hope I get that cash before my electricity is cut off. Aaccckkk!

(none of this is true, just wondering about how you would use gold in today’s world)

2

You’re offering a non-monetary asset instead of money to pay a bill. It’s up to the management of the company whether or not they wish to accept this substitute.

I feel a credit card corporation or a utility are less likely to accept this kind of substitution. The local representative you’re going to be dealing with does not have the authority to make that kind of decision and isn’t likely to want to reach up the administrative ladder to get authorization. If you were making this offer to a local business, you might be talking to the owner who could agree to the substitution.

I also feel you would get a worst deal by trading the gold at a business rather than a precious metal dealer. The business owner isn’t going to be familiar with gold prices and is likely going to offer you an unfavorable exchange rate to compensate for any uncertainty. A precious metal dealer will know the current price of gold and buys gold on a regular basis so they’re more likely to offer you the best price you’re going to find.

3

If they’re US coins, they would probably (assuming you got through to someone who realized they were real coins) take them for the face value on the coins. So yes…but also no, since at the current price of gold you’d basically be selling them for half a penny on the dollar.

4

I would suspect that they might accept them if they were actual US coins minted as currency, but only as face value. They would treat them like normal coins. So if those 10 coins were $1 gold coins, you could pay $10 of your bill with those coins.

5

Assuming they are US gold coins, the maximum face value is $50. Right now the melt value of a $50 1-oz gold eagle coin is about $4300. Seems like a no brainer to me.

6

why would you get ripped off? Look up the price of gold on the internet. Take the coins to a coin dealer. They should give you at least 90% of the gold value based on weight. If they don’t, go somewhere else or sell them to any of the reputable online coin dealer (JMBullion, APMEX, etc.)

7

Sure, a precious metals dealer is going to rip off the OP but a bank or utility (that doesn’t know anything about dealing in gold) isn’t? Makes perfect sense.

8

Another factor here is the usability of the asset to the business you’re offering it to.

If you pay a utility, for example, with money they can directly use the money to do things like pay their employee salaries, buy office supplies, pay their taxes, etc. But if you pay a utility with gold they can’t directly use it. So they’re going to have to turn around and sell the gold for money.

So effectively the gold coins you have are going to be exchanged for money at some point. You will generally get more monetary value by arranging the exchange yourself rather than having a third party, like a utility company, do it for you.

Let’s say you have some gold that has a market value of a thousand dollars. You could go to a gold dealer and they might offer you nine hundred and fifty dollars. Or you could offer it to the utility company to pay your bill. They would tell you they would only accept the gold to pay eight hundred and fifty dollars worth of what you owe. Because if they accept your gold, they’re going to be the ones who will have to go to the gold dealer to get the nine hundred and fifty dollars. The hundred dollars is what they’re charging you for this extra work they have to do.

9

Today’s spot price is just over $4100, and many historical coins like the one you mention (although I’m not sure about that specific one, the only 1-oz coins I have seen were $20) are 90% rather than 100% gold, which would be around $3700, minus the buyer’s handling charge, which might be up to another 10% off the top, so around $3330 or a little more. When you are selling to a dealer, they will give you a breakdown of all of this before you agree to sell.

This may seem risky but it isn’t. They do these transactions all the time. The key is to know approximately how much to expect.

This is all assuming your coins are not collectible. If they are, the values will be higher and also somewhat more subjective.

10

The other 10% is mostly silver and copper, which have value too. JMBullion quoted me $4285 as the melt value of a 1-oz gold eagle bullion coin. Obviously that’s not what you would expect to get from a dealer, but you’d get enough to make the face value irrelevant.

11

This will change every day, as the gold spot price goes up and down. You would need to know what the spot price was on that day to evaluate what they were offering.

12

Be careful about encouraging illegal activities, like destroying U.S. currency for its raw materials.

13

If gold is demonetized the world over, why does its price keep soaring far beyond the inflation rate?

14

That’s only illegal if it’s a penny or nickel.

15

“Melt value” just means that the value of the coin is based on the amount of gold in the coin only, and not on any collectible value. No-one melts the coins.

16

Nobody said anything about destroying US currency. Selling it for melt value is perfectly legal and happens every day. The dealers don’t “melt” them, they sell them on to investors.

17

Can you provide a citation to show that such laws apply to precious metal coins issued by the US Mint?

18

The value of precious metals keeps rising mostly because it is demonetized and because of inflation. There is only so much gold on Earth.

19

Nonetheless it’s hard to argue that gold is valued as highly as it is just because it makes pretty jewelry or for utilitarian purposes. Do that many people around the world still believe in the back of their minds that fiat currency is a house of cards and that gold is a prudent hedge just in case?

20

So what happens to the value of gold if paper money is worth nothing? Or say a zombie apocalypse causes no one to have cash money. Banking is completely failed. You really really need that antibiotic or a bucket of meat. Will anyone take gold in exchange?

If gold is only good for looking at, it’s realistically, worthless.

I’d try Gold soup but I can’t imagine it tastes good or is healthy.