Post By jim4silver
May 04, 2012, 04:20 PM
Pre 1933 US gold
Right now the premiums on this type of gold are lower than I have seen in a long time. Now I am not talking about what your local coin store may sell them for, I am talking about dealer bid/ask prices. Normally, this should translate into comparable reduced prices you pay at your local store but might not necessarily be the case where you live.
One thing to not be fooled by is the reasoning that these coins are somehow exempt from future confiscation. Some people say that but it is not true. The claim seems to originate from the fact that the 1933 executive order that allowed the gov to "confiscate" gold in 1933 mentioned an exception for "gold coins having a recognized special value to collectors of rare and unusual coins". The executive order never went on to say what such coins would be that were exempt. Even if there were such a law exempting pre 33 US gold, it could easily be "undone" with a new law. Having said that, I don't believe there will be a gold or silver confiscation from US citizens because not enough people own any and what they do own would probably not even cover a week's worth of gov spending dollar-wise, probably would be even less than a week?
Anyway, if anyone is interested in getting old US gold, now is not a bad time with respect to the premiums you pay for graded gold. I personally prefer PCGS graded gold, but will also buy NGC depending on the coin. Right now MS 64 St. Gaudens are probably the best deal as far as bang for your buck if you can get average premiums relative to dealer bid/ask prices. I was offered the chance to get a PCGS MS64 Saint (common year) for a bit over 200 bucks over spot. That is not bad at all for old gold in near pristine condition. I turned it down though since I would rather be buying silver now if I was going to get more PMs.
One site that is open to the public and lists dealer bid prices (what a dealer is offering to pay right now to buy one) for old US gold and other things is below. Depending on how the site opens up you may have to click on the "show all coins" button.
Coin Information :: Coin Info . com
You can see the dealer bid prices do not include the premiums you will pay when you buy from them. Kind of makes you want to become a coin dealer when you see the prices they charge each other vs. what we pay retail. But of course they have to charge a premium because that is how they make their money to stay in business.
If I do buy any more gold I will probably get a few old double eagles if premiums stay low over the summer. One good thing is that they are not making any more of them unlike modern bullion (that is assuming you don't buy a Chinese counterfeit slabbed coin) .
Last edited by jim4silver; May 04, 2012 at 04:25 PM.
R.I.P. Rich Hartford
May 04, 2012 04:20 PM
May 04, 2012, 05:07 PM
Good post Jim, I already sold my Gold pcgs and ngc slabed coins months ago to buy more silver as I think it's the better bet right now after listening and reading on some great forums you suggested. I'll be buying some silver this weekend as something tells me to buy. Charlie
May 08, 2012, 12:32 PM
Jim, what is your opinion on raw early gold? I have bought graded, but recently I find I can't pass up the deals I think that I'm getting from my local dealer on $2.50, $5 and $10 gold liberty and indians. Thanks, ffd
May 08, 2012, 04:55 PM
Originally Posted by fistfulladirt
I don't know how much you know about old US gold, but here is my opinion on the matter. I think buying raw old US gold can be great, but a few things you need to be careful of. First, you have to be careful about buying raw gold that has been "cleaned", unless you are getting it at regular to lower bullion premiums and just want it for bullion. By cleaning I don't mean dunking it in soapy water, but instead using acid dips, wipe cloths, jewelry polish, etc. Such cleaning will permanently ruin the original mint luster and when you go to sell will be told such by the dealer and he will give you below spot. A coin dealer cannot wholesale a "cleaned" coin to other dealers (unless he lists it as "cleaned"), so if they wind up buying them they usually get stuck putting them up for sale in the display case. They can still make a decent profit on them if some unsuspecting buyer sees the nice, shiny pretty coin and thinks he is getting a deal for 5-7% over spot though. They cannot sell them to other coin dealers and list them as raw XF, VF, VG, AU, etc condition coins if they are visually detected as "cleaned" coins.
In the past, one of my coin dealers would offer me first dibs before he sent a batch of really badly cleaned or damaged coins off to the refiner (yes that is refiner as in melting the poor coins forever) and I could sometimes get them for a buck or two over melt and sometimes at melt (basically a few bucks more than he would have gotten from the refiner).
I have learned that most coin dealers will send in raw gold to be graded IF it has not been cleaned (meaning it is gradable) and if it is worthy of a decent grade (rarity also plays a part in their decision to grade). Coin grading companies are not supposed to grade "cleaned" coins and will send it back in a "body bag" as ungradable depending on the level of cleaning. I do know one coin dealer that claims to always lightly "clean" gold coins before sending them in for grading. He won't tell me exactly what he does, but I suspect one method is using a specific coin dip that claims to not hurt or remove the mint luster, I cannot remember the name of it but have seen it in the same coin store but I have never purchased it. I know he also has some type of "ultrasonic" cleaning machine where the coin is placed in water and the machine is turned on to do its magic. But that probably does not damage the coins like dipping and instead just removes surface dirt.
Thus, if raw coins are being sold in the display case it usually means they are not worth being sent in to be graded for whatever reason-- been cleaned, ave. to poor condition, etc. I used to buy really nice looking raw gold not knowing about what "cleaned" coins looked like and learned the hard way. I can now spot them and actually have learned a lot about the grading process over the past few years. I had a chance also to talk with a former grader from one of the "big two" companies and he told me much about the process as well.
If you have a good rapport with your coin dealer, a good way to see the difference in a nice MS 63-65 graded coin and a possibly "cleaned" raw one is to borrow a slabbed one from him and place it on the counter next to the raw coins just to compare. One of the best detection methods for spotting a "cleaned" coin via dipping (and what I used to not catch) is the color of the gold. Much of the time the dipped coin will be shades lighter than the undipped coin. This method of detection fails if the slabbed coin was dipped and was still graded though. But normally the graded and undipped coin will have a somewhat darker gold color, sometimes more orange hue than the dipped coin, and the dipped coin is more likely to have the color of a 14 kt gold. This is not true all the time, but is just one way to detect the dipped coin. This is hard to see if you are only looking at one coin at a time. You need them side by side unless you are really good at catching it unless the dipping was really heavy and it is obvious.
Unfortunately, many dipped gold coins will still exhibit the "cartwheel" effect even after dipping if they did not get hit too bad in that the mint luster while being affected is still present on the coin in large degree, so using that method to detect cleaning is not very effective.
Right now the premiums on the graded stuff have fallen so much in the wholesale market (and consequently the retail market hopefully in your area), it may not be worth buying raw unless you get really good deals. I looked at some the other day and an MS 64 Saint was only $100 or so more than a raw coin that they tried to say was AU but looked cleaned to me. Putting the two side by side you could clearly see the 64 blew the other coin away in its lack of surface marks, better color, etc. For an extra $100, I will take the slabbed coin any day. Now if it were $200 bucks different that would be a different matter.
Last edited by jim4silver; May 08, 2012 at 04:59 PM.
R.I.P. Rich Hartford
May 11, 2012, 07:11 PM
Thank you for your relaying your experience Jim. I've bought a half-dozen gold lately, I think I will hold off buying more until I gain some more knowledge on grading...I intend on getting an appraisal on what I have through another local dealer that I know.
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