Numismatic Investment?

Leham

I just bought my first gold coin worth much more than its metal content (2x as much). It is a slabbed $2.5 1910 Indian PCGS58. I got a fair grey sheet price but I'm worried its value wont track with regular gold. That is to say when gold goes up 20% this coin wont change or worse, the value of the coin will drop to the price of melt. Then again, it is possible the coin could gain value faster than bullion. What do people think about collectable PMs and investments?

Also, the coin was a bit of a birthday present, so I can justify the splurge.

RedTiger

Numismatic gold won't track bullion 1-for-1. I wouldn't worry about it. Premiums on gold coins go up and down. A few years ago the telemarketing firms promoted the heck out of numismatic gold and premiums over melt value went very high. The promotions eventually ended and the premiums went back down.

roadrunner

This is not the kind of classic gold coin you should be buying if you expect your purchases to somewhat track the price of gold. Generally I would say forget all $1's, $2-1/2's, and $3's.
Gold could literally double in price from here and those might only go up 10-20%, if at all. They will more closely follow the fortunes of the general numismatic coin market. Gold coin
marketeers probably have a tough enough time convincing coin collectors to buy them never mind newbie gold coin investors.

The denomination and grades of the gold coins both play a factor. For instance at times I like MS63/64 $5 Libs, $10 Libs, and $10 Indians as a leveraged play on the gold price. But those same coins in AU grade will also closely follow bullion with maybe only a 3-10% premium to spot. MS63 $10 Indians fell to around $1000 a few months back but have rebounded to >$1600. Those were a great play. During that same period MS64 Type 3 $1's fell from $1350 to $1000. A terrible play as everyone got smallcoinitus at the same time.

Most circ XF-AU Liberty and Indian gold ($5's, 10's, 20's) is priced within 5% or so of bullion. So from here on they will track the gold price. It's not like dealers will start paying 20%
back of spot for these coins, though I'm sure many try....lol.

roadrunner

jmski52

The good news is that you bought a PCGS-certified gold coin. There is no bad news.

As others have pointed out, the premium will fluctuate, and it's not unusual to see the premium increase when gold prices decline. Thus, there is somewhat of a buffer built in. And it also buffers the price when gold goes up. As Red Tiger advises - I wouldn't worry about it.

Roadrunner's suggestions on classic gold should be considered, if you are leaning toward classic gold as a gold investment. Some people - myself included - like the modern Mint gold issues. In both cases, you have to become somewhat familiar with the specific issues and the market in general to optimize your purchases.

Now about that coin. Where are the pics?

savoyspecial

>>but I'm worried its value wont track with regular gold. That is to say when gold goes up 20% this coin wont change or worse, the value of the coin will drop to the price of melt.>>


ooops! it seems you have messed around and....and.....started (gasp!)collecting coins!!!


relax, it is not that awful

mkman123

Numismatic gold is.something you get because you enjoy the history of it and cam pass it down. That's how I see it and don't feel disappointed, etc if it doesn't go up in value or loses value.

Leham

ooops! it seems you have messed around and....and.....started (gasp!)collecting coins!!!

I couldn't have said it better my self, Thanks for the advise all