Gold investing question

Newbiedoobiedoo

I'm new to investing in precious metals (not counting the 1 oz of silver I bought in the early 80's 😆). I want to invest $7000 in gold. Should I get American Eagles? Buffalos? New uncirculated? Also, a new 24k Buffalo prior is going to be released by the mint on the 13th. Would that be a good move?
Thanks for your help!

TomB

Howdy and welcome.

I assume your $7,000 budget is something you don't critically need for anything else and that you might be treating precious metal (PM) purchases like you might treat other investments. If so, then what you have listed is generally considered bullion (uncirculated American Eagles or Buffaloes) and, as such, they carry a modest premium to spot. If we look at the one ounce pieces, in my experience the gold Buffalo carries a tiny bit higher premium upon both purchase and resale when compared to the American Eagle (uncirculated, bullion pieces for both types). In the not-so-distant past this premium was about $50 per ounce for the American Eagle and $75 per ounce for the Buffalo. These numbers might have changed.

Personally, I prefer the Buffalo design to the Eagle design and I think the US Mint might have been looking toward the global market with the Buffalo since it is 0.999 fine, if I recall correctly, while the Eagle is 0.927(?) fine. They both contain one ounce fine gold. You will no doubt get lots of feedback from others on the site.

PerryHall

@TomB said:
Howdy and welcome.

I assume your $7,000 budget is something you don't critically need for anything else and that you might be treating precious metal (PM) purchases like you might treat other investments. If so, then what you have listed is generally considered bullion (uncirculated American Eagles or Buffaloes) and, as such, they carry a modest premium to spot. If we look at the one ounce pieces, in my experience the gold Buffalo carries a tiny bit higher premium upon both purchase and resale when compared to the American Eagle (uncirculated, bullion pieces for both types). In the not-so-distant past this premium was about $50 per ounce for the American Eagle and $75 per ounce for the Buffalo. These numbers might have changed.

Personally, I prefer the Buffalo design to the Eagle design and I think the US Mint might have been looking toward the global market with the Buffalo since it is 0.999 fine, if I recall correctly, while the Eagle is 0.927(?) fine. They both contain one ounce fine gold. You will no doubt get lots of feedback from others on the site.

The gold buffalo gold fineness is four 9's rather than three 9's which is important to some buyers. The AGE is 22K or 0.9167 fineness

Downtown1974

Welcome!
You may get varying opinions on your timing, but trying to speculate whether gold will soar or crash is just that....speculation.
IMO opinion, you can’t go wrong with ASEs or Buffalos. You can often find graded MS69s for just a few dollars more than raw ones. They are good peace of mind for you, and for your buyer when the time comes to sell.
Buffalos are fantastic, but I steer clear from fractional Buffs due to the exorbitant premiums.
Let us know what you decide!
Take care.

carew4me

1 30 yr old silver eagle and now you want to jump in with 7K? I suggest this might be an emotional decision and something else will come up soon that will get your attention. therefore I suggest a position in GLD ETF, you can jump in/out as the sprit moves you.

derryb

gold eagles actually weigh more than their stated weight. Their stated weight is that of the gold content. A 22K 1 oz gold eagle contains 1 oz of 24K gold that has some alloy mixed with it to make the coin "harder" and less likely to be damaged. 24K gold buffalos and 22K gold eagles contain the same amount of gold.

If I had credit card debt, I would pay it off before investing in precious metals. You will be giving yourself a better long term return.

Varying premiums over spot for products reflect desirability (demand) for that product. Don't let them scare you, they are normally recovered at time of sale. Avoid generic or obscure products, always buy with future resale in mind. Ease of resale is important.

ricko

Excellent advice above... Pay off debt first, definitely a wise course. I stick with AGE or ASE for bullion. However, I started over thirty years ago - and long since paid off initial investment cost with sales at peak value years ago. Stacking is fun, but use disposable income. Cheers, RickO

derryb

gold eagles and gold buffalos both have one ounce of gold. Saints weigh a little more than an ounce but have only .9675 ozs. of gold.

Here's a handy gold coin spec. chart, but it was made before the buffalos came out. Most important in this chart is the "gold oz" as it indicates the weight (content) of the actual gold in each coin.

derryb

@Newbiedoobiedoo said:
Hey, is there an advantage in buying a proof Buffalo when it comes out May 13 from the mint?

only if you collect them or think you can flip for a quick profit. No mintage or household purchase limit, everyone that wants one can have one directly from the mint. Non proofs are a cheaper way to stack bullion. Harder to get a perfect 70 grade on a proof coin. Check ebay to get an idea of how last year's are selling.

streeter

If I was in your shoes, I'd be very cautious. Only sight seen, P/N ms69 graded as close to spot as possible and spaced a month or months apart per ounce. Your learning curve is steep and very possibly by the 3rd purchase, you may realize that your first foray could have been better because of increased knowledge. Knowledge is your friend in the coin business. There is no Santa Claus nor free lunch.

thefinn

If you can't hold it, you don't own it.

derryb

If I were to buy a PM ETF, Sprott products would be the only game for me. Word is they are about to get a uranium ETF going.

MsMorrisine

don't stack proof coins

derryb

@MsMorrisine said:
don't stack proof coins

Agree, even though they are in protective capsules. extra premium for what is still an ounce of gold.

MsMorrisine

can buy air-tites if one wants a protective capsule

derryb

Good idea to stick with quality coins and avoid gold bars.

MsMorrisine

@Newbiedoobiedoo said:
Hey, is there an advantage in buying a proof Buffalo when it comes out May 13 from the mint?

Don’t buy proof coins

MsMorrisine

Also, I second the opinion to stay away from bars.

MsMorrisine

I'm of the mind to buy classic gold only when premiums are really low and I can get non-problem AU or low end MS coins.

mapleman

@Newbiedoobiedoo said:
Thanks everyone! Great advice! 😁

I agree about making this decision with disposable income. I'm thankful to be retired, debt free and able to invest a bit as a hedge. ETFs are a great idea however I would like to have the PM in my possession. Thanks for the advice not to be a bit fool-hardy. It's probably been close to 40 years since I bought my little 1 oz Englehard bar. I was probably 23 and gave $ to an older guy in the office who was going down to get a bit more than me. 😂 I was the youngest in the department and I was always getting $ advice from the guys especially since I was a young woman among older guys and they were looking out for me.

I didn't realize that buffalos were more pure than American eagles. It might be fun to get both. Also, I really love the beauty of the Saint-Gauden gold coin. Would that be a prudent purchase?

Thanks everyone!

FWIW, I STARTED STACKING with oz au bars and was able to trade for OZ gold maple leaFs for plus $10 each. After stacking a bunch and considering the clear advantage of US gold coins in US sales I switched to eagles and buffs but the significantly lower premiums on maples make them very attractive in the current market. Best of luck and oz sovereign us and canadian imho is the way to go. Best of luck.

Newbiedoobiedoo

Thanks everyone! Great advice! 😁

I agree about making this decision with disposable income. I'm thankful to be retired, debt free and able to invest a bit as a hedge. ETFs are a great idea however I would like to have the PM in my possession. Thanks for the advice not to be a bit fool-hardy. It's probably been close to 40 years since I bought my little 1 oz Englehard bar. I was probably 23 and gave $ to an older guy in the office who was going down to get a bit more than me. 😂 I was the youngest in the department and I was always getting $ advice from the guys especially since I was a young woman among older guys and they were looking out for me.

I didn't realize that buffalos were more pure than American eagles. It might be fun to get both. Also, I really love the beauty of the Saint-Gauden gold coin. Would that be a prudent purchase?

Thanks everyone!

Newbiedoobiedoo

Thanks Derryb. I'll bookmark that. 😀

Newbiedoobiedoo

Hey, is there an advantage in buying a proof Buffalo when it comes out May 13 from the mint?

Newbiedoobiedoo

Thanks everyone. I'm going to do a lot more reading tonight and your advice is meaningful. I love this forum. Lots of experience here and a variety of thoughts.... With the main point of doing my homework. 😁👍

MsMorrisine

I would be worried about the premium on the $20 classic gold disappearing faster than the premium on new bullion gold.

I also would not pay more for a new year bullion coin than the random year ones, but that is me.

Newbiedoobiedoo

@MsMorrisine said:
I would be worried about the premium on the $20 classic gold disappearing faster than the premium on new bullion gold.

So would it make sense to buy a classic gold coin if gold drops / premium reduces? Based on what I've been reading I'm leaning towards random year AGE's or AGB's.

thefinn

I buy 22kt British Sovereigns and Latin Monetary 90% gold. Lower premiums and known weights and designs and LOW PREMIUMS.

Newbiedoobiedoo

@thefinn said:
I buy 22kt British Sovereigns and Latin Monetary 90% gold. Lower premiums and known weights and designs and LOW PREMIUMS.

Interesting. Does that include Victoria Sovereigns? I love the early ones.

On a side note - Hopefully heading to the UK this August to do some metal detecting. Had to cancel last year's trip. In 2019 I saw 3 gold coins found during the 12 days of detecting. 1 was a George 3rd, but the other 2 were both Gold Nobles. 1 was a Henry VIII and was in great condition ( it was amazing how heavy it was for a hammered coin), the other was even older but had been pretty beat up by the tractor. Finding a gold coin would be a dream. A free coin has extremely low premiums. 😆😉

thefinn

@Newbiedoobiedoo said:

@thefinn said:
I buy 22kt British Sovereigns and Latin Monetary 90% gold. Lower premiums and known weights and designs and LOW PREMIUMS.

Interesting. Does that include Victoria Sovereigns? I love the early ones.

On a side note - Hopefully heading to the UK this August to do some metal detecting. Had to cancel last year's trip. In 2019 I saw 3 gold coins found during the 12 days of detecting. 1 was a George 3rd, but the other 2 were both Gold Nobles. 1 was a Henry VIII and was in great condition ( it was amazing how heavy it was for a hammered coin), the other was even older but had been pretty beat up by the tractor. Finding a gold coin would be a dream. A free coin has extremely low premiums. 😆😉

Sure, they're usually all about the same price. If a Vicky is really nice they are more. I personally like Edward VII, and have a full set of George V of each of the mints. It is nice to pick up Canadian Sovereigns without a premium if someone doesn't know or care.

Sounds like a great trip to the UK. They have serious detectorists there. Have you seen the show, "The Detectorists" on TV? It is a drama and is very interesting.

Newbiedoobiedoo

Sure, they're usually all about the same price. If a Vicky is really nice they are more. I personally like Edward VII, and have a full set of George V of each of the mints. It is nice to pick up Canadian Sovereigns without a premium if someone doesn't know or care.

Sounds like a great trip to the UK. They have serious detectorists there. Have you seen the show, "The Detectorists" on TV? It is a drama and is very interesting.

Sounds like you have some cool British coins.👍 I'll have to see if I can find a good coin shop during my 1 day in London before heading to Norfolk if the dollar is strong compared to the pound anyway. Thanks for the info!

I've not seen that show but I did see a write-up on it in the UK Searcher magazine. I'll have to look around for it. Maybe it's on Amazon Prime.

Newbiedoobiedoo

Thanks for the advice everyone. 😊 I ended up purchasing 1 AGE, 1 Buff and 10 ASE. After checking around I feel that I paid a fair price based on what I've seen. I really liked the guy that I worked with
and, judging by the number of the people waiting in the wings, I'm not the only one. I also like the idea of using a "local" shop (well, since I live on an island local means it only took 2 hours to get there). 👍