Trading gold bullion for numismatic gold.......whats your opinion?

mkman123

Hey all, lets say you have 1/4 and 1/2 oz gold eagles, maples, krugs, etc. A dealer has $5 libs and indians that are slabbed by PCGS or NGC and they are in vf-au in grades. He also has $10 libs and indians that are also slabbed in lower grades.

The dealer is willing to trade you the numismatic gold for your bullion straight up..........would you do it and what are the pros or cons for doing a trade such as this?

The pros I see would be:

1. If gold tanked, the numismatic would hold its value a bit better

The cons I see is:

1. There are a lot of people that just want bullion and if you offer them numismatic gold, they are skeptical if its real and because its something they are unfamiliar with, they reject it.




Thanks!

57loaded

1) yes (if you think gold is going down)

2) yes (if you think gold is going up)

DrBuster

I probably would, especially if it's just generic gov bullion of those 3 flavors. Aussie or Chinese gold, probably not so much.

to add: since I don't have a lib or an indian

gecko109

Sure...do it. But just keep in mind that a 1/4 AGE has a tad more gold than a $5 lib.

jmski52

Long before slabs, numismatic gold in the grades you describe used to be considered bullion. Even so, it was sold at fairly healthy premiums.

When gold bullion ownership once again became legal in the early '70s, the numismatic classic gold lost some of its premium and Modern Bullion pieces took up most of the slack because it was more gold for the money.

Once the AGEs came out, I lost any interest in classic gold simply because of its history of having higher premiums for what was essentially bullion. For purposes of overall liquidity and utility, I plan to stay with Modern Bullion in the form of AGEs.

gsa1fan

If they are good dates & mint marks =good trade.

Common dreck, I'd keep the AGE's.

mkman123

thanks for your opinions everyone!

TheBigB

<< <i>If they are good dates & mint marks =good trade.

Common dreck, I'd keep the AGE's. >>



You will likely loose liquidity in this trade.

morgantype

I would do it if I was building a 7070 or other type set.

I would rather opt for au/BU coins and pay the slight premium.

Even more so, I would keep the bullion and focus future purchases on numismatic bullion.

derryb

Strait up would have to mean gold for gold. Keep in mind the AGEs are a higher gold content. Either way I'd stick with the AGEs, always easier to sell when it's time to sell.

johnny54321

I would do it all day long for the $5 and $10 indians! They are more popular with collectors even in worn condition, and I think the small loss of gold content in the trade will more than be made up with the numismatic and historical presence of the indian eagle coins. I am putting together a roll of half eagles(18 into it so far), and I've been motoring the ebay market for even raw/damaged indian half eagles and they usually bring a significant premium over melt. As a result, most of my roll is made up of libs since I'm trying to purchase to as close to melt as possible. A PCGS or NGC slabbed $5 indian is a no-brainer trade for a quarter ounce eagle in my mind.

mkman123

thanks again everyone for your opinion, its helping me decide what to do.

Johnny54321, thanks for your reply but let me ask. After paying ebay fees, isn't the price much lower?

When speaking of liquidity, I want something that can be sold anywhere besides ebay. From coin shows to craigslist, seems like bullion gold would sell much faster.

The only reason I am considering a trade is because I can own a piece of old US coinage thats never being made anymore. Something fun to show the children.

TheBigB

Indians might be a play depending on the specifics, but I would avoid low grade libs.

There is a reason he wants to dump these.

gsa1fan

<< <i>Indians might be a play depending on the specifics, but I would avoid low grade libs.

There is a reason he wants to dump these. >>



Exactly! PCGS or NGC slabbed "S or D" mint $10 Indians in Au for 1/2oz AGE's I'd do all day!

I'm 99.99% sure he will not offer that trade.

streeter

I'd be very careful and by that I mean that as Derry mentioned...straight up --you're talking diff. gold content.

Here's a couple of examples

Bring a 10lib in BU to a store(to sell)...say it's an attractive 62. You'll prolly get offered gold content +/- a couple %.

Bring a 10lib in vf-xf into a store and you'll prolly get hammered by the offer most of the time.

But bring a 1/2 OZ of 3 9's and you'll know almost exactly what it will bring before you try to sell it.

offer vf-xf 5's and 10's on BST and see how you start losing your gold value a little at a time.

Now these examples need to be tempered with how hot gold is.

I would always try to get BU 10's for your AGE's(if you wanted to do what is best for you) at close to a straight trade but it isn't easy. In fact I doubt you could pull many of these trades off.

BU 20's have a low premium right now but you still are losing gold content and you need to be careful as there are counterfeits out there that may or may not be true weight.

To me, by me trading(my) 3 9's for (your) generic 5/10 circ gold is a loser all the way around (for me).

I think ....right now....the smartest thing to do might be to trade out some 999 gold for BU holdered 20's with the lowest premium and then trading back if and when the premium goes up significantly.

best of luck.

roadrunner

I like Streeters idea about trying to get BU Liberty gold whenever the premiums are relatively small vs. spot. That won't ever happen with the $1, $2-1/2 and $5 Indian gold.

Right now the best buys are in the BU $10 Libs and BU $20 Libs/Saints which are both about 8% above spot. The $10 Indians were a deal a year ago but it seems everyone woke
up and realized they are much scarcer in MS60/61 than the $10 Libs. A $10 Lib in MS62 is only $10 more than a 61, obviously a better buy. The MS63 $10 Libs in 63 are now down
to a pitiful $1025, a level they achieved at $850-$900/oz gold back in January/Feb. 2009. They just get no love as additional supply comes in from overseas while demand is steady or
shrinking. I still like the "value" in MS63 $10 Indians but we all have been saying the thing about commoner MS65/66 classic commems for the past 15 yrs...lol. It's apparently going to
take a world-wide shortage of AGE, Maples, and other popular gold coins and bars to shift some attention to these old circ and BU classic gold coins. Gold at $1300, then $1400, and
then $1500 did nothing but depress the prices on these things. Will $2,000 gold only make then worth spot? We may just see MS63 $10 Libs and Indians at spot by $2,000 gold.

The few experiences I had when trading circ classic gold was that it seemed it was always getting beat on them. When I was buying them in XF/AU they were essentially "problem"
free coins. When I went to sell them, many of them somehow became full of problems. What was AU before, now became an XF. So my advice is if you're going to play with them
ensure you tighten the screws as hard as you can as a buyer, or walk. There will always be other deals. My local dealer has several double row boxes of circ gold that doesn't seem to
move. He doesn't mind as he figures it's a "gold" investment that is only going up in value over the years. And in that respect it makes a portion of his core position. Last time I was
in there he said he had about 500 ounces worth. If they really wanted to sell it they could just ship all off to a national dealer and be done with it....but probably triggering a lot more
taxes based on their original cost.

Still, if the dealer was willing to give me an even swap for modern gold to slabbed gold (factoring in that each classic gold ounce is only .9675 ounces of .999), I might be tempted to do
that based on coins that catch my eye. They have to be eye appealing, original, and problem-free. But something tells me that most dealers would want to make a few percent on that
transaction. In that case I probably wouldn't bother unless I really saw something in those circs, like an orig 1910-s $10 in VF/EF for example.

roadrunner

OnlyGoldIsMoney

I might trade if the classic US gold were nice original, undipped or otherwise unmessed with pieces. If not I'd pass.

mkman123

thanks for everyones opinion, really appreciate it! I've got lots of thinking to do now!

fivecents

I would only trade if the numismatic gold was mint state. I would not trade for common circulated numismatic gold.

RedHerring

My concern would be the liquidity of the vf/ef Libs if they are common-dates and butt-ugly. You could easily take a 10% hit from melt if you had to move them quickly.

As noted above, the Indians (especially in PCGS/NGC AU) would be VERY attractive to me. I would go for a couple nice looking $5 or $10 AU Indians at melt pretty quick.

I like classic gold myself and would go for a partial trade toward AU Indians and keep some of the AGE.

secondrepublic

Let me give you a personal example, in the late 1980s I bought a $5 Indian in AU, a common date 1913, from a local dealer and paid about $200 at that time. That was the market price. I remember the purchase because I was young at the time and had to save up all my money from various odd jobs and gifts to afford it.

I don't remember price of gold bullion at the time, but it was probably in the $400-something range. So clearly the Indian (which is under 1/4 oz.) carried a significant premium over melt. At that time it was about 100% over melt.

Fast forward to today, APMEX buys uncertified AU $5 Indians for $411 and sells them for $462 according to their website. Gold value of a $5 Indian according to Coinflation is $372. So the premiums are smaller today than 20+ years ago.

InYHWHWeTrust

Before jumping into that arena I would do a search on every post RR has done with generic gold market or PM the heck out of him. The complexity, twists and turns and the ebbs and flows of premiums, within and between the different series, and at different grades, seems like it would be best, as always, to 'buy the book' first. Take your time!