Are fractional AGE's a "fool's errand" of sorts?

RB1026

Does it make sense for a PM purchase to be in fractionals? The premiums are much higher on a net per oz of gold basis. Is there any value to buying fractionals or is an investor better served saving funds and buying gold in full 1 ounce eagles?

derryb

Yes. ya gotta sell someday. fractionals will have the same if not higher premium then and are more affordable to most. Not many people gonna be able to pay $3k for a $50 gold eagle.

RB1026

I've never been a gold investor. Do the fractionals have the same liquidity in the market as 1 oz eagles? Based on the above comment on premiums, do the fractionals wholesale at the same % of their retail as the 1 oz eagles?

I guess what I am really asking is, for example, is a person who wants to buy $500 in gold making a good decision to purchase a couple 1/10 oz coins (currently around $200 ea) and having cash left over or better served to save up the $1700+ for an ounce? (in this example, let's presume the price of gold is steady, not dramatically rising or falling)

Sorry, for my reply here.....looks like you just answered my question before I posted this....THANKS!

CaptHenway

It all depends on the price per ounce that ya gotta pay. If you are paying full-bore retail for fractionals, then you are paying a lot for the convenience of divisibility.

However, if you shop around and find somebody who is long in fractionals and will sell you an ounce or more total weight at his regular premium for a one-ounce eagle, go for it!!!!!!

Just expect to pay immediately by cash or check.

TD

DorkGirl

It's easy and cheap way to buy gold. Don't have $1800 for an ounce? Maybe $190 for a 10th is possible and something you can do. Or maybe a quarter ounce.....

Spooly

If you ever have to use gold as money.... it will be easier to use 1/10oz or grams. But 1oz are the best way to save.

guitarwes

<< <i>Does it make sense for a PM purchase to be in fractionals? >>



Yes it does make sense: 1. If it's all you can afford at the time, it adds to the stack as it does. 2. If/when gold gets to $2400/oz, the quarter ounce and 1/10 oz. AGE's will be the only fractionals that will be under $600, which if the 1099 reporting crud goes through, you will be over the limit with the other sizes.




<< <i>The premiums are much higher on a net per oz of gold basis. >>



yes, you are correct. but chances are if it carries a 12-14% premium now when you buy it, it will do the same when you sell it if you can find the right buyer.



<< <i>Is there any value to buying fractionals or is an investor better served saving funds and buying gold in full 1 ounce eagles? >>



The less expensive way to go is buying the full 1 oz. in one fell swoop. But consider this (as it's already been brought up), when you go to sell when spot gold is $3k/oz, are you gonna find as many buyers for that 1 oz as you would for 10- 1/10 oz AGE's?

vann

<< <i>It's easy and cheap way to buy gold. Don't have $1800 for an ounce? Maybe $190 for a 10th is possible and something you can do. Or maybe a quarter ounce..... >>


1/10 ounce AGE are far more available than the 1/4 AGE or $5 eagles. The best deal on fractionals at the moment are the Uncirculated 2011 United States Army $5 Eagles, lower mintage than 1/4 AGE's, $445 from the mint and contain 0.2418 ounces of gold which works out to paying $1840/oz and over 50% grading MS70 at PCGS, which the added numismatic value, will lower your overall cost per coin when sold.

vann

<< <i>

<< <i>Does it make sense for a PM purchase to be in fractionals? >>



Yes it does make sense: 1. If it's all you can afford at the time, it adds to the stack as it does. 2. If/when gold gets to $2400/oz, the quarter ounce and 1/10 oz. AGE's will be the only fractionals that will be under $600, which if the 1099 reporting crud goes through, you will be over the limit with the other sizes. >>


The 1099 for all purchases over $600 was repealed last April. Link

BigE

Watch out, many bullion dealers dont pay a premium for 10th age's when you go to sell, I recommend buying ounces-----------------BigE

Overdate

<< The best deal on fractionals at the moment are the Uncirculated 2011 United States Army $5 Eagles, lower mintage than 1/4 AGE's, $445 from the mint and contain 0.2418 ounces of gold >>

Some of the earlier commem $5 golds (0.2418 oz.) are selling on eBay for around the same price.

57loaded

not at all. (fool's errand)

good point above with BigE.

sometimes big dealers like govmint run an advertisement in newspapers and magazines claiming they are emptying their warehouses and quote a pretty much close to spot on 1/10 ounce with a max limit of ten. i got some once thumbing a magazine waiting in the oral surgeon's office before getting my wisdom teeth out.

storm888

Buy whatever size you can afford, each week.

If it all "works out" as it likely will, the premiums won't mean anything.

jmski52

If you are buying or selling gold, it always pays to get a few quotes from different sources. Always. While it may be true that the premium on fractional AGEs is higher when you buy, it should also be true that an informed seller will pursue getting most of his premium back when he sells. The premium does vary with the market, so sometimes you might get more and sometimes less.

While BigE may be right about dealers not paying a premium for single coins, most gold transactions are done via negotiation on the spot. It can go either way depending on whether the dealer sees you as a strong seller or a weak one.

The premium is essentially a liquidity premium and right now gold is pretty liquid so most people will pay it. In building a gold position, I'd simply try to keep some proportion between the size of the gold units you have in your portfolio. I wouldn't buy all 1 ozers if I were just starting out, but that's just me. Just start slow and keep stackin' - that's probably the best advice I could give you right now.

DrBuster

Man, if I were wanting $500 on a purchase, there's all kinds of old numis gold you can get a 1/4oz for closer to spot that will be as liquid% as buying it today.