Would love opinions on Gold coin purchases with CRH proceeds

[RaptorSE]

Hi all,

Like some others on the forum, I too am looking to diversify my hoard, and
especially make room in the safe LOL.

Im gonna sell off my 40% halves and use the money from those to pick up
a few gold coins. I have no gold at all, so Im a newbie to the yellow metal, (other
than some jewelry.)

I figure there is about 3 ways to approach this.. correct me if I missed any
significant choice.

1. Circulated coins in good condition from actual history. Probably pick these up
near spot price, and can get a nice little collection started.

2. Slabbed graded coins that are gonna carry a hefty premium, but a worthwhile
investment in the collectors market for the long term.

3. Your basic bullion accumulation, such as Eagles or Maples. This route would be
purely an accumulation of weight as investment.

I really have no clue what to do, I just want some Gold coins to have and touch.

Please, feel free to state your opinions and pro's / con's . Im all ears.

PS. Im keeping all my 90% silver coinage. This will get me started on a stash of silver and
gold. I like it all LOL.

Thanks !! Basically what would you do and why ?

Happy searchin'

 

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[fiatboy]

It really depends what you like. If you have an interest in numismatics, I suggest you keep that interest separate from any bullion purchases you make. Of course, there will be overlap. But really, buy what you like.

Although I have a strong interest in numismatics, my area of expertise is in bullion. I'm hesitant to state the pros and cons of slabbed or historic gold, cause I don't know as much as I should.

So here goes:

Gold bullion typically comes in two forms: bars and coins. Since South Africa introduced the Krugerrand bullion coin in 1967, coins have been the popular choice of bullion. And fwiw, Krugerrands are the most widely recognized gold coin in the world. All bullion should have the level of fineness marked or stamped on it. For example, a coin that is 99.99% gold has a fineness of .9999, or 24 karat. That's the highest you'll get. Gold bullion is typically measured in ounces or grams. Grams used to be popular, now it's ounces. Krugerrands and American Gold Eagles, however, are 22 karat or .9166 fine---not pure gold. Copper or silver are typically the other metals used in gold alloys less than 24 karat. However, just because a Krugerrand or Gold Eagle is not 24 karat, they still contain a full ounce of gold. That's what matters. Gold by weight. British Sovereigns are also 22 karat. Why are some coins not pure gold? Because pure gold is extremely soft, and gold coins used to circulate, so having a soft coin wasn't very feasible for commerce. To most sellers and buyers, however, the fineness of a coin is a secondary consideration to how much gold is present. Before you ever buy gold, ask yourself why, how, and if, you ever intend to sell. Come time to sell, there's a very real chance that you'll get the same or similar prices for very different coins. As regards bullion, it'll be the weight that matters, not how pretty the coin is---an ounce is an ounce is an ounce. If you're selling numismatically, things change. A high-grade Saint Gaudens will certainly demand a premium over the spot price of gold. The difference between the spot price and the ask/sell price is called the "spread." Remember, precious metals bullion is NOT a good investment, but it IS the very best store of value that has ever existed. What cost an ounce of gold 3,000, or 1,000, or 500, or 50 years ago, still costs an ounce of gold today. For hundreds of years, Italian clothiers and haberdashers have always charged one ounce of gold for their finest suits. There are ups and downs, but over time, gold retains its purchasing power. And given today's world economy, I wouldn't be surprised if it does end up being a good investment. Due to its unique chemical properties, it is nearly impossible to counterfeit a gold coin (unless you have some platinum, which costs more than gold). There ARE counterfeits out there, but if weighed and measured, they are always found out. Gold does not tarnish. Ever. There may be some toning, but that's from the other metal that are alloyed with the gold.

Gold coins usually come in 1 ounce, 1/2 once, 1/4 ounce, and 1/10 ounce varieties. And occasionally 1/20 ounce. A 1 ounce gold coin is about the size of a half dollar, and a 1/10 ounce is about the size of a dime. The smaller coins carry a higher premium. So if you want the most gold for your dollar, buy the largest coin you can. The Canadian Maple Leaf, Austalian Nugget, and the new American Gold Buffalo, for example, are .9999 fine. They're my favorites. If you're buying just to have some gold, irrespective of numismatics, please, play with the coin in your hands. It's an amazing feeling. But do remember that gold scratches very easily. Numismatically, always consider mintage figures and demand. I love Icelandic gold coins, because they have extremely low mintage totals, but there isn't as much demand for them as old Indian Head gold coins. Swiss gold is always in demand, but there may be a premium just because it's Swiss. You're paying for the name, not extra gold. (ahhh...to be back in Zurich!)

If you have any questions about particular gold coins or bars, spot pricing and spread, or anything else, PM me, and I'll fill you in. I could go on all night about gold bullion. haha. Did I miss anything?

 

[Immy]

Great info fiatboy! A lot of good, practical advice there.

I dabbled in gold a couple of years ago just because when I was a kid collector it was a goal of mine to own at least one. I love British coins so I bought four sovereigns that correspond with birth years in my family; mine, my Dad's, my grandfather's and my great-grandmother's. They represent four different monarchs so they look really great.

Now that I have my "sentimental" gold I may try bullion. Thanks for a great primer.

 

[fiatboy]

The British Sovereigns are stunning!


On another note,
As most bullion coins are monetized and have a face value---for example, a 1 oz. American Eagle has a face value of $50; a 1 oz. platinum Eagle has a face value of $100 (the values are largely symbolic)---I wonder if anyone has ever used one to buy something. I also wonder if any gold coins have ever been found in circulation, like in a roll of halves.

Anyway, good luck with the gold, Raptor. Buy what you like!

 

[RaptorSE]

Thanks Fiatboy, that was an awesome reply and I appreciate it.

Im gonna start with some coins that I can play with in my hands, with
little / no numismatics involved. Just a "want" thing.

Then I think any future purchases will be Maples/Eagles and other bullion
type nice looking coins. Bigger the better

I know investing in PM's isnt the best you can do and I do understand where
the value of gold/silver comes in. As far at that goes, when I take each
coin from a roll,and replace it with .50 of my own - I get the immediate return
of 900% , so Im not necessarily concerned with the investment side of things.
Basically just want my treasure hoard pile to keep growing

Again, thanks very much. I may PM you with a few other questions here and there.

Happy searchin' all.

 

[65gt350]

I would try to work a trade with a dealer 40% for gold. This way you might be able to squeeze the premiums a little. Also if you are trading a small amount you would not have to pay sales tax on a trade (If your state charges). I also would wait until the GSR is below 48 this will help reduce some of the discount that 40% trades at.

If you have bag quantities I would shop it around because buy prices can vary substantially.

I like Gold Maples and it is possible that you could get the American Buffalo coins at the same cost depending on the seller.

Best of luck.

 

[RaptorSE]

Thank you as well 65GT. Thats an idea I will definitely give a go.

Now my only problem is finding a local dealer to buy, sell, trade with.

I found "one" within 25 miles of me in any direction, and its a Jeweler
that does antiques, coins , estates etc within its business. Probably
need to get to the big city area and do some comparing. Looks like a
little extra driving will be required. Im game.

Thanks again !

 

[65gt350]

I would use the phone for quotes. Most dealers are more than willing to quote over the phone. Just don't hold them to it. I use the phone quotes to see who is giving the best discount to spot and go from there. Are you talking bag quantities or less than bag quantities?

 

[RaptorSE]

Not sure what bag quantity consists of - but I have a fair amount
to use in this trade / sale. Probably do a $500 face in 40% (1000 coins),
on my first experience, and see how it goes.

 

[65gt350]

Not sure what bag quantity consists of - but I have a fair amount
to use in this trade / sale. Probably do a $500 face in 40% (1000 coins),
on my first experience, and see how it goes.

Bags are $1000 face. I would say that based on todays prices you should get 2 oz gold (spot +20 should get you any coin you want)plus ~$250 - $400 in cash but that depends on the dealer for your $500.

65GT350

 

[tw656]

Dont know how well you would do with coins in good condition just over spot. Unless your buying bags in bulk, or maybe foriegn. Maybe, I dont know.
When i went to the baltimore coin show they did have some peace and morgans for $12 - $15. I would say the ones at $12 were in poor condition. At $15 maybe a few at the good to fine condition. At the time the silver content of the coin was about $10 and a little change. I have bought some slabbed coins. But like anything else there is a learning curve. I do like to mix it up, I would like to invest in something else interesting outside of coins with some of my 40%. Note sure what maybe bonds or t bills. Gold is good, I have some eagles and some slabbed. I am thinking 25% gold, 25% various slabbed, 30% silver (90%ers) and 20% something else. Post back what you have decided or any info you have found in your decision. A lot of us are in the same boat.

 

[RaptorSE]

Will do tw656 - I am currently in my learning phase and am researching
everything I can. I like the idea of two 1 oz. gorgeous beasts, but also entertaining
the thought of a handful of old U.S. gold pieces. ( 2.5 dollar, 1 dollar, 5 dollar etc)
possible mix of designs and dates. All I know is the safe will look empty after
all those 40% leave LOL.

Will keep everyone interested posted as I figure out what to do . Thanks again for all
the thoughts and ideas.

 

[fiatboy]

Please keep us posted. And don't sweat it. It's hard to go wrong with gold.