Your Opinion: Trade Old for New?

braddick

I have a chance to trade in 37 double eagle Libs and Saints- each in AU50 to MS62 condition (ok, maybe a couple are MS63, but there are no MS64's, for sure) for post 1986 one ounce Eagles. Included in the mix are eight ten dollar Libs and Indians and a slew of five dollar Libs and Indians. The theory being a premium is paid for the older coins with a minimum premium for the new.

Premiums are high right now and have been for awhile and my theory is those premiums will shrink in the future. Let's face it, pre 1933 gold is not rare and not even scarce what with a lot of it still being shipped back here from overseas.
Here is a chance to add more pure gold to my holdings without spending a dime. 50 ounces could turn into 55 ounces- give or take.

Is this sound reasoning, in your opinion? Is my logic flawed? What are your thoughts.

gsa1fan

Seems you should be able to get better than that. Sounds like a old trader trying to take a greenhorn? JMO

braddick

<< <i>Seems you should be able to get better than that. Sounds like a old trader trying to take a greenhorn? JMO >>



Thanks, but my numbers/percentage is not exact and is a conservative guesstimate. It is Heritage, and my lot was expressed to them yesterday after a friendly conversation. Of course once a number is told to me I have the option, at their expense, to have the lot overnighted right back to me.

gsa1fan

Well 50oz of pre 1933 gold should bring more than 55oz of new post 1986.

fivecents

Exactly how many one ounce gold eagles are in the deal.


<< <i>Well 50oz of pre 1933 gold should bring more than 55oz of new post 1986. >>

gsa1fan

fivecents

A few weeks ago. I sold two raw and not real pretty XF/ AU saints for $1,300 each to a dealer. Another dealer had offered me $1,250 each.

CaptHenway

FWIW, generic gold has gotten softer in the past week or so.

You should have done this about a month ago.

MOO

TD

DimeAdozen

Until and unless the coins are not scarce you can't trade for new ones..

DoubleEagle59

I'd trade them.

Anything to build up the PM reserves.

You've got to think about the extra profit you'll make down the road with higher gold prices and added gold ounces.

scotty1418

You should definitely trade value-value and not 1oz-1oz in this situation.

The older coins are definitely worth more than the moderns and if you really only care about the quantity of ounces you have, you can leverage that to get more.

jmski52

Roadrunner likes to play the premiums on common MS Saints. I like to play the premium on new Modern issues.

You can take advantage of swings in either case, as long as you know the market in the coins that you are playing with. I would get killed in the MS Saint arena, because I have no idea how it goes.

The case for Moderns is easy to make. For non-collectible Modern Bullion, the premiums are usually low and tied to the price of gold. Essentially you are tracking the physical gold market.

In the case of collectible Modern gold and platinum issues, there have been some huge home runs recently - the fractional Gold Buffalos, the 2008-W proof and satin Plats, the 2008-W Satin AGEs, even the UHR. The only problem with those is that once you have them, they are hard to part with.

Ericj's thread on Moderns in the Coin Forum is the best place to stay current on New Issues. I don't know about this year yet. Sometimes I think that low premium bullion is the best deal, sometimes I bite for the Mint's New Issues. Sometimes, I buy when the cash flow is available and for no other reason.

If I had to guess, in terms of new Mint issues - the Buchanan Liberty Gold Spouse and the 5 oz. Hockey Puck silver "quarters" are the ones to watch in 2010. The only problem that I see with the Hockey Pucks is that you need to financially prepare to buy the whole series over a period of 5 years, and you need to figure out how and where you are going to store them because they (and possibly the Mint packaging, if they are sold in boxes) will need a permanent storage place.

Something else to think about - if the Hockey Pucks are simply sold as bullion through the authorized Mint dealer network, they will be heavily-cherrypicked, so the premiums had better be low, or the whole deal begins to smell, and not in a good way.

roadrunner

At first this almost looks like a toss-up with only a 10% premium to AGE's but you are giving up some divisibility by parting with $5's and $10's. A couple of those $20 Libs making 63 would swing the deal strongly towards the buyer's favor. Just one coin going 63 means +$750. A 2nd piece is $1500 or about 3% of the deal.

Personally, I wouldn't do it now. As TD said the time was a month ago when the premiums were higher. In other words on the next stronger gold move these premiums will shift back upwards. So imo this is not the time to do this swap. Those premiums should not shrink much from where they are now but they should rebound on the next big gold move. I wouldn't do this trade now with just AU $20's at stake...never mind MS62/63's. $20's right now are soft as reported to me by a gold wholesaler at FUN and they need to be discounted some to sell. So you're $20's are being discounted more than normal to account for this temporary variation. Sell when they are strong, not weak.

Yes, generic gold has softened the past month. But so has bullion gold which fell back 8-10%. My suggestion is to wait for the next strong peak in gold. That might not be until April/May. But you will probably get the full premiums back once again and maybe an extra % as well. In any case you shouldn't be in any worse position and this can give a couple of months of tracking the market to get a better feel in this area.

I read a report by a guy who recommended building sets of lower grade/premium generic gold as a way to hold gold in the safest manner. His concern was eventual confiscation. While most here have pooh-poohed such a concept, it is not impossible. And those that can show/prove that their gold accumulations are not just piles of bullion may have a slightly better chance of holding on to them. So why not tip the odds ever so slightly more into one's favor? Having a date run of $20 Libs/Saints in XF/AU/unc from the 1870's to the 1920's is an alternative method to holding bullion while being able to show that its actually a collection. The same thing can be done for whatever denomination interests you. Having 5-10 of each date is not a collection.

While we can postulate that the premium on these will disappear with gold at much higher values, that's just a guess. They could also maintain or increase their premiums. Get a couple of telemarketers pushing $20 Libs or Saints and one could do wonders with their prices. Those same guys can't push AGE's as "heirlooms" of the USA. Don't underestimate good old numismatic ingenuity when higher prices are desired. There are fairly sharp collectors putting away circ sets of better date $20's. There are many angles to this debate beyond just an ounce for an ounce.

roadrunner

braddick

Sage advice.
The only advantage, in my favor is the end result of the trade is as of yet, unknown. In other words, my coins were overnighted to Heritage and I should have an answer either later today or tomorrow as to the 'trade value'.
I would be requesting a mix- mostly one ouncers, but would also seek half and quarter ouncers should this deal go through.

And, based on the excellent opinions within this thread given yesterday, and today, it very well may not.

roadrunner

Note also that you're fighting the market in some respects as starting this afternoon Heritage will begin buying a ton of generic gold from various sources during the FUN show. By Friday they will most likely be chock full of all the circ/raw gold they need and may have backed off their buying prices unless gold continues to plow higher this week. At several of the previous FUN shows I attended this pattern seemed to pretty much hold true.

roadrunner

streeter

Not to pick hairs but you're doing this for a 10% increase in bullion and if it was myself...

I think that a 20% net gain would be my pass or play right now. Your AU/ BU inventory isn't exactly earth shattering quality but it's right in the wheelhouse of the telemarket lads---where this stuff will end up shortly no doubt.

good luck

roadrunner

My FUN show intelligence from dealer setup this afternoon indicated that the big boys had pulled back on their buying (ie very cautious and sitting back to wait and see where gold goes....or picks up again). In a nutshell I was told those guys aren't buying...at least not yet. The usual activity of middleman running the floor looking for gold deals (or any US coin deals for that matter) was conspicuously absent. Those looking for "first shot" on fresh deals were also absent. Maybe things improve starting Thursday. But based on this I wouldn't expect strong offers on the classic circ US gold. In this afternoon's Heritage weekly internet gold sale they had hundreds of pieces of circ XF/AU gold from $5's to $20's....quite a bit more than normal imo....most in lots of 10,25,50 pieces.

This looks much like last year's January pattern. Very weak FUN show in gold with no action....followed by gangbusters in Feb. with buyers tripping over themselves. The big boys are probably still flush with gold from November and need more time to work it off.

roadrunner

ProofCollection

I think it's unwise to get rid of pre-1933 gold, and here's why.

Yes, there's a lot of it, but there is a finite supply. When gold mania hits, the premiums will be amazing. All you have to do is look back to 1980's premiums to get an idea of where it can go. Promoters will promote the hell out of it, and premiums will continue to rise.

Then there is the issue I hate to bring up but I should - gold confiscation. The pre-1933 stuff can be called collectible and possibly be excempt from confiscation, if it happens (although who knows what the exemption might be - but most certainly pre-1933 has the best chance).

Now this is just what I would do for material I already owned... I'm not sure my advice is the same for someone just entering the market.

SmallTownCoins

Premiums go up, premiums go down, depending on who is promoting what...
I'd take the deal that nets the most Gold by weight....

mkman123

How about go through and pick half of the stuff you like and keep it. The other half convert it to bullion. That way you have a mix of both.

jmski52

Then there is the issue I hate to bring up but I should - gold confiscation. The pre-1933 stuff can be called collectible and possibly be excempt from confiscation, if it happens (although who knows what the exemption might be - but most certainly pre-1933 has the best chance).

There have been a few threads in the Coin Forum on the gold confiscation and my understanding is that not many people turned in their gold. Yes, there were exemptions but there is absolutely no guarantee that any government will follow precedent. Do you trust them to?

The best defense against gold confiscation is physical metal, imo.

Zubie

I'm with MkMan123, pick out and keep a few of each, then convert the rest to modern eagles. Best of both worlds!

braddick

<< <i>How about go through and pick half of the stuff you like and keep it. The other half convert it to bullion. That way you have a mix of both. >>



I've done that and already have had it certified. The raw coins don't account for the slabbed ones as I have more in certified than I ever did raw.