Anybody notice the spread....

thatboyaintright

on common gold coins getting wider ??? I just came from a smaller show in middle Georgia and was shocked at the prices being asked for common gold coins. I'm used to paying $100 - 150 over melt for common saints in high AU or Low MS grades. Today the closest to melt that I could find was an ms 61 for $340 over melt. What does that portend for the coin market ? Or for the gold market ?

All I know is that I went home empty handed today ...

daOnlyBG

Good question. I sold a few Gold Eagles (commons, late 1800s) the other day for about $150 over spot. They had good luster on them, but nothing special- probably in the AU range. I also purchased a couple around the same rate. Perhaps having an MS61 holder commands a higher premium? Not for commons, though...

s4ny

I have noticed the same trend that you mention, the spread has increased. I think the best explanation is
that as gold made its huge move from 2001 to 2011 sellers wanted to cash in and premiums compressed.

Now that gold has been in a range for 18 months, the premiums are starting to return.

DoubleEagle59

When gold prices drop, dealers don't want to sell their generic gold coins at the lower price, so they raise the spread.

If no one buys, they don't panic because they feel confident the price of gold will go back up.

ColonelJessup

In a wobbly gold market the spread in the real bulk market for generics declines. Small dealers who stock a few items like this often get trapped when they are buying on the come. And, even when the market is static, they like a healthy mark-up when they can get it. Show them your own generic $20 and offer it to them at 3% under their quote. The response should be interesting

RYK

IMO, the spread has been unusually low for a period of time such that any increase to a more typical spread seems unusual (if that made any sense!).

roadrunner

I noticed the spread on common MS 63-65 $20 Saints moved up a lot back in November to December. I can only attribute it to some people thinking or knowing
that shortages were beginning to appear in the physical market. There's never a shortage of paper gold however where for now, the spot price seems to be set. It won't
remain that way indefinitely though. Down the road the daily spot/paper price will become less meaningful. Even with gold's recent $50 drop, those physical premiums
have not dropped off that much. When gold supplies tighten up the premiums rise. And when gold is getting hammered like in April-July of 2012, the premiums on US
classic gold coins shrink.

thatboyaintright

My local coin dealer says that when gold drops $50, she'll drop her price $10 on generic gold. So the spread takes $40 of the sting out of the sale. When gold rises by $50 she'll increase the price by $40, thus taking more profit but dropping the spread until its back to a "normal margin".

So I guess my lesson is to buy generic gold coins when gold is high and sell when its low ? Wait... that doesn't seem right ???

LindeDad

Do you really think that what happened at one small show anywhere is the trend setter for all generic gold?

DoubleEagle59

<< <i>Do you really think that what happened at one small show anywhere is the trend setter for all generic gold? >>



I think you should turn that around.

The 'trend' is what controls the dealer.

By that I mean, why is any dealer in a rush to sell his gold at a lower price when in all probability and not too long of a wait, the price of gold is going higher?

Tdec1000

Generic gold is always more popular in the South from what I have seen.