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I question I have been pondering.....
Ajjohnson77
Posts: 481
Why not buy generic gold saints and double Eagles instead of bullion gold like gold Eagles and krugerrands? Seems the saints and double eagles have a lot more upside. Heck you can get pcgs graded ms saints and Eagles for around spot price.
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Thing is, there are millions of graded MS64 saints. There are also a million or so proof 1 oz gold AGE's. I think both are pretty good speculative ploys. The proof AGE's carry a similar 20% premium to spot.
Gold is become so hated that the premiums on these saints has shrunk quite a bit. But, it also doesn't mean that they are going back to anywhere near their old levels. That really depends on where gold sentiment and
gold price heads in the coming years. It was a negative divergence in 2009 that the MS64 saint % premiums peaked 2 years before the gold price did. There are some good reasons for that but that's for another day...such as
these coins still coming out of Europe in quantity. While they might be minting them anymore, the fact that they flow from overseas to PCGS and NGC is increasing available supplies.
If you can get unc saints for spot (3.25% premium to melt) then buy them. 10% over their melt value is not much of a premium. When 63's hit a 5% premium to melt just a few years ago I though was nuts, especially if you
could pick the coins.
They will sell you a PCGS MS63 Saint for $1,384
They will buy your PCGS MS63 Saint for $1,302
Spread: $82 or 5.9%
Cost over Spot: $159 or 12.9%
They will sell you a $50 Gold Eagle for $1,292
They will buy your Eagle for $1,257
Spread: $35 or 2.7%
Cost over Spot: $60 or 4.6%
MS63 Saints are no where near the same thing as bullion. If you want to invest in Gold. You buy AGE's. If you want to hold some cool coins with almost an ounce of Gold in them, then you buy the Saints. But make no mistake about it, you are paying for the "cool."
Considering that hand picked nice MS64's can often become CAC 64's with a $50-$100 premium, that's another option to play to reduce your net premium. I'd rather pay $25 more to hand pick a 64 than take a generic coin which could be a 63 on a different day. The fact that CAC only stickers only around 10-20% of these tells you that most are generic quality. And that's fine if you can buy generic coins for generic wholesale prices.
If people wanted to do the $20 DE thing, I'd recommend they build a date set of the commoner dates (ie no premium dates). In doing this you have a verifiable collection of Saints and/or Libs. That difference could mean something down the road.
<< <i>Today APMEX Gold is at $1,232.
They will sell you a PCGS MS63 Saint for $1,384
They will buy your PCGS MS63 Saint for $1,302
Spread: $82 or 5.9%
Cost over Spot: $159 or 12.9%
They will sell you a $50 Gold Eagle for $1,292
They will buy your Eagle for $1,257
Spread: $35 or 2.7%
Cost over Spot: $60 or 4.6%
MS63 Saints are no where near the same thing as bullion. If you want to invest in Gold. You buy AGE's. If you want to hold some cool coins with almost an ounce of Gold in them, then you buy the Saints. But make no mistake about it, you are paying for the "cool." >>
And the Saints don't even contain a full ounce of gold. When comparing the various coins, it's easier for people to compare when they all have the same 1 ounce of gold in them. More gold bang for the buck with the AGEs.
$20 gold coins contain 90% gold and 10% copper, but the actual amount of gold is .9675 Troy oz per coin.
It seems there really isn't a ton of downside to acquiring MS62-4 Saints or Libs right now. The premium above melt can't get much lower. It could possibly go higher again. The premium for AGEs doesn't have much potential to ever go higher. You do pay a little for the "cool" factor, but it's likely that someday another bloke will too. They are a touch short of an ounce. When you've stacked up 31 of them you only have 30 oz of gold (well, 29.99 oz). Perhaps AGE's are more liquid, but compared to virtually everything else in my "cabinet", it isn't all that difficult to find someone willing to take double eagles at a fair price.