I’ve been thinking about buying some gold coins. I know next to nothing about them though and I really don’t want to go to some coin shop and get told what to buy. I’m not interested in buying older collectible coins but what I guess are called bullion coins.
So far what I know is that there are a few different countries that make them including the US, Canada and South Africa. I also know that you can get them in 1oz and 1/10oz coins. That’s really about the extent of my knowledge of gold coins.
I do have some questions though. I understand buying gold as part of an investment plan. However, what good does it do? From what I understand the coins can not be melted down so all I’ve got is a coin. Do they eventually get melted down and made into something else or what happens to them? Is there a better coin to buy or are they all the same?
I will not be able to buy anything at this time but the 1/10oz since I can’t afford $1300+ in one shot. Does it really make that much of a difference? Also how do I store the things? Does it matter if they get little nicks on them like older coins?
Thissite was incredibly helpful when we bought some. There was no real rhyme nor reason, we just wanted to put a certain amount of money in Gold, we ended up with American Eagle, but you can get it where ever you want, from a wide array of mining companies, mints or private sellers. Watch the last ones because one of the issues that came up for us was transporting the gold when it was purchased…you have to insure it…at least we did.
Ordinary bullion coins have no value other than their gold content. If you wanted to, you could melt one down and sell it as a lump of gold for essentially no loss in value (though it would be less convenient to sell).
The most common bullion coin size is 1 troy ounce of gold. Some bullion coins (like the American Eagle) contain 91% pure gold (22 carat), so their actual weight is 1.1 oz. Other bullion coins, like the Canadian Maple Leaf, are essentially pure gold (24 karat), and weigh exactly 1 troy oz. 22 carat coins are slightly inferior in appearance, but more scratch-resistant than 24 carat. If you’re just buying these for an investment, there is no difference in value between either type.
If you want to play with them on your desk or something (I used to use one as a paperweight), you can decide which kind you prefer.
Bullion coins in perfect condition (and with recent dates) will fetch a small premium over scratched up coins. If you just want to buy something as an investment, don’t get one that’s in perfect condition, and you won’t have to worry about losing value due to handling.
Don’t get a proof coin. Proof coins are manufactured differently in order to make them look pretty. They are more expensive than bullion coins, and the difference in value is solely in their appearance. You won’t be able to touch them with your fingers without affecting the value, and most people keep them in sealed plastic holders. Not very much fun.
All of my purchases have been proof coins mainly because they are usually minted in limited runs and therefore command a premium due to their relative rarity. As a result, the amount you pay over the melt value tends to be well worth the additional cost.
However you do need to check to see what the limit is for a particular run. IIRC, most US gold and platinum eagles tend to have runs of around 50k units for the entire set. I could be wrong about that and in recent years they may have increased that due to the huge demand. In fact, some coins produced on an annual basis like the buffalo coins were delayed or even skipped a year because the mint couldn’t get enough of the blanks from which the coins are stamped.
I think the proof versions are quite beautiful. It’s true that you can’t handle them, but I do keep one on my desk to fidget with and it has held up quite well. The rest are stored off-site.
Since this is IMHO, I will say that IMHO, this is a very bad time to buy gold, it’s on a huge bubble. Soon, the “pumo & dump” crowd will dump, and Gold will be back to $400-600/oz.
One interesting way to buy gold is to buy decent circulated coins from the early 20th /late 19th century. You can often get some of these (they are usually in the 1/4 oz size, aka $5) for not much over Spot.
I hope you are right, as I’ve been waiting a couple of years for it to burst, and it just keeps growing to ridiculous prices.
I guess the people pushing it up are the same ones who some years ago caused the stock market bubble to burst, and lately the same for the housing market. They never learn.There are a couple of generations that never saw nor heard of a bear market, or house prices that did not increase forever. Oh well.
I’m so old I remember when gold was $35 an ounce for years and years. Too bad i could not afford any then.
Here’s a graph of gold prices over the past 10 years (scroll down to see different graphs for different time periods). Over those years, the price has grown 789%; over the past 5 years it has grown 303%. Although the price occasionally drops, (so far) it always goes back up.
I don’t see gold going back below $600 unless there is serious monetary re-alignment in this country - i.e. a very different monetary policy. Currently the Fed is trying to goose the economy by making the dollar less valuable, and one of the results of this is that commodities, including gold, get more expensive. I think it would take a great depression to change this dynamic very significantly.
Certainly gold is very high and chancy to buy right now. Equally certainly, if you already have gold, I would absolutely hold it rather than sell. I think it will be an excellent hedge against inflation over the next few years, as the results of the past few years come home to roost.
Roddy
Oh god, PLEASE… As a art/jeweler, making gold jewelry has been really hard for people because they are used to buying cheap, hollow stuff from WalMart and working in it is prohibitively expensive!
Back to the OP. Most cities of any size have at least one bullion dealer. Check the spot price on line and then visit the dealer to see what they are charging for a percentage. If it’s more than a few percent, walk away. Panda America has been around online since the early 80s and I’ve bought silver from them in the past. I believe them to be reputable.
Forget gold. Let’s talk about buying any real thing.
So you go to the shop and you buy rare stamps. The Stamp Guy buys them wholesale. He marks them up (I dunno, maybe 50%?) and sells them to you retail. You take them home and wait fifteen years. The price of rare stamps goes up! It surges!
You go to the Stamp Guy and he is glad to see you. The stamps he bought for $0.50 he sold to you for $1.00 are now worth $2.00 retail. That is to say half of that wholesale. So he offers you half of retail. A buck.
OK so you go to eBay. A guy named StampGuy123 wants to buy your stamps. But of course he could also buy wholesale. For some reason he is offering $1.25. But of course he has to see the stamps first.