I would like to buy a gold coin. Not for any sort of investment purpose, but just to have on my desk and play with.
If I bought an ordinary bullion coin (Canadian Maple Leaf, American Eagle, etc.), this would not cost me very much - I could resell the coin at any time to any number of dealers, for the market price of gold minus a small transaction fee. Of course, the price of gold itself could drop significantly, but I am willing to take that risk.
However, it would be fun to buy a “proof”-quality coin, struck multiple times with a polished die so it looks extra cool. However, the US Mint sells these coins at a $400 premium to the current market price of gold. My question is - if I buy a proof-quality coin, how easy will it be for me to recoup that $400?
Obviously the $400 is an appearance premium only, and I will lose some of it if I damage the coin somehow - but other than that…
You’ll pretty much lose all of your $400 premium if you play with it. Proof coins are meant to be stored, looked at occasionally, but that’s it. As soon as your fingers touch the coin the acids in your skin will eat the fancy finish you paid so much for. Then your coin grade will go from a PR-70 to an Uncirculated-66 or so.
The other thing to keep in mind here is that these sort of “manufactured collectibles” have an inherent cap on their appreciation/valuation because – unlike “real” colllectibles such as old coins or comic books or antique furniture, which were bought, used, broken, discarded, so that scarcity lent a premium value when people started getting interested in them – proof coins are made ONLY to be collected. The government will produce pretty much as many as they think they can sell. Most of those will go into plastic cases. And everyone who wants to own one, will have bought one. Unless there is a significant shift upwards in the number of people interested in proof coins, the market is and will remain effectively saturated.
The value of newer proof coins depends almost exclusively on the number minted. Like any coin, scarcity and condition determine what the market will bear price-wise. That’s why you will often see an ‘uncirculated’ coin have a higher value than its ‘proof’ counterpart.
Most of the proof bullion coins are not worth all that much and in fact are often worth less than the issue price. U.S. Silver Eagles are a prime example. Many of the China Pandas, on the other hand, have appreciated nicely. If you’re looking to buy a proof gold coin, I’d look at gold Pandas as a better choice than gold Eagles (generally speaking).
We currently buy proof American Gold Eagles *in their original capsule, case and with the certificate that comes with it. * We pay retail customers anywhere from $100-150 premium over the price of gold. We wholesale them for about $225 over the price of gold. Those guys in turn sell them for $300-400 over.
If you brought a lightly circulated proof in to sell to us, we’d pay gold price.
So, it sounds like even a brand-new proof coin will probably sell at a bit of a discount from what I paid for it. This makes sense - someone can just buy one that is guaranteed to be perfect from the Mint.
I am surprised that damage from finger oils is an issue on gold coins - I thought gold was corrosion resistant.
I could probably avoid scratching the thing up, but I’m certainly not going to put on gloves whenever I want to fool with it. It sounds like I should get a standard bullion coin.
Yep, a standard bullion coin is the ticket. American gold eagles are 90% gold/the rest alloy(copper/silver). It’s the copper that reacts, not the gold.
For collectors, a proof coin loses value once it has been handled. The gold doesn’t lose any value, but the collector premium may. We look at these things under magnification for tiny marks. Yeah, we’re nuts.
samclem, bit of a hijack, but how much would a UK gold sovereign, circa 1910, go for nowadays? ever since reading Sayers’ Have his Carcass, I’ve wanted to get one, but have no idea how much it would cost.
Saint Gaudens Double Eagles are perhaps the most beautiful coins the U.S. has ever issued. The coins for circulation were struck to near-proof quality standards, and an About Uncirculated piece from a non-rare year would probably be not terribly much over bullion price, on a guess. It may be just what you’re looking for. (Samclem, please validate my assumption here, and give some sample prices, if you would.)
I have an MS-65 1908 “No Motto”, PCGS encapsulated, that I paid $1300 for, about 3 years ago. If it weren’t encapsulated I wouldn’t be able to resist the urge to handle it.
With gold at $710 US, approximately, a sovereign contains about .2354 oz. of pure gold. Multiplying that out, the bullion value would be $167.US. You could probably find a dealer to sell you one for anywhere between $177.-190, depending on their demand. Most gold is selling for a good premium right now as there are more buyers than sellers.
Currently, the huge demand for gold has bumped the premiums for all gold coins, especially for US $20 pieces. I’m not at work yet, but the cost of a US $20, whether a little worn, or barely uncirculated is approximately $1000 US. Quite a premium. When all the dust clears from the current worldwide financial meltdown, I would guess the premium might return to a more normal $100-$150 over bullion value.
panache45. MS65 Saints are currently retailing for about $1650 US.
Absolute. You can only speculate about the price on that Ultra High Relief copy the Mint will issue next year. My guess is, if there’s some degree of stability in the financial market worldwide, the price will be about $200-300 premium over bullion value. Just an educated assumption.
Since we’ve got the attention of some coin guys… how do monetary gold coins (likesay a double eagle) perform as an investment relative to plain gold bullion coins? I’m thinking of investing a little in gold as an inflation hedge, and it would just be a lot cooler to have a bunch of AU-50 double eagles than just plain maple leafs or something like that.
