Fractional vs Ounce Premium vs Buy Back

Planchet

I am in the learning phase. I am looking at the buy sell spreads.

Once of my local B&M sells the 1 oz AGE for $75 over spot (buy back at $40 over right now) and the 1/4 oz AGE for 5% over spot which right now is about $90 per ounce over spot with a buy back at spot. He says that most of his customers who purchase AGEs by the 1 Oz. AGE rather than the fractionals. He said that the K-Rand is vey popular because it costs $25 less than the AGE with a buy back at 98% spot. The Maple is about $10 less than the AGE with buy back at spot and seems like the worst deal.

For the $15 per ounce difference between 1/4 oz AGEs and 1 Oz AGEs which would you buy and why? As between the AGE, K-Rand and Maple, which do you tend to buy and why.

Lastly he says the best bargian he has is the Sovereign which sells for $10 per coin over spot. However the buy back is 98% of spot.

Ideas for me to consider?

Thanks, Planchet

DrBuster

I say the cheaper the better. If you're in it for the bullion/gold play, then get whatever he'll throw you at spot/melt. ....it's only going up.

My guy has sold me everything at melt basically. Don't care what he paid, but he sells it to me at melt with the 'off brand' stuff - commems, krugerands, pesos, sovereigns, and 1/10th eagles. Trying to get him to sell me an indian at melt, we'll see...!

Planchet

Dr Buster

You seem to favor fractional coins rather than full 1 oz coins. Is there a reason that might help me make a decision-Planchet

DrBuster

<< <i>Dr Buster

You seem to favor fractional coins rather than full 1 oz coins. Is there a reason that might help me make a decision-Planchet >>



Personal preference to add to my supply the cheapest, and to be able to sell in small quantity if needed.

rodzm

I buy gold with the least premium but also look at resale price. It doesnt matter if youre buying off the wall gold so long as you get the best spread wehn it comes time to sell. Yes you may get more upon resale for a AGE but you will more likely pay more. The spread mayu not be good when buying and selling them

derryb

Look at prices for all four sizes of gold eagles at apmex.com. Gives you a good idea of premiums per coin. smaller the coin, higher the premium over spot. just the way it is.

Wingsrule

Keep in mind that the sliding scale used (smaller coin, higher premium) is exactly the way the US Mint sells them to the authorized distributors.

Now that I think about it, pretty much everything is priced in that fashion. You buy in bulk, or a larger size, and your cost per unit drops.

jmski52

Check prices for Tulving.com to get a realistic view of the spreads, and then factor into the equation that local spreads will be a bit more aggressive since the quantities will likely be smaller.

Investigating the spreads before you buy is the absolute, 100% correct thing to do. But keep in mind that spreads are always changing and that they reflect local conditions as well as the anticipated market volatility.

You are asking the right questions.