In your opinion, what's the most efficient way of investing in PCGS graded gold coins?
53BKid
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In the past I focused on collecting gold commems, both modern and classic, but that has turned out quite poorly the past few years, with buy prices now at negligible premiums to melt , regardless of the grade or relative rarity.
There's the AGE/ABE route, though premiums appear quite steep on what tend to be large mintages.
I collected just a few pre-'33s over the years, and really love the various Indians, though wondering how efficient the market is apt to be for more affordable common MS64, MS63, and MS62 grades. It also seems that more common double eagles can be bought in these grades at moderate premiums.
When considering potential resale value with a long time horizon, what are your opinions, please.
HAPPY COLLECTING!!!
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Coins are a hobby, not an investment. If you want to speculate in gold stay as close to melt value as possible when buying items that are readily traded.
Long time horizon you say?
It's pretty darn difficult to beat traditional investments such as mutual funds and real estate.
The only people really doing well in the business side of numismatics are those who treat it like a business. Like all businesses, those having success are those with superior skills, connections, and knowledge. They also make it their life's passion. Most hobbyists don't have or access to enough coins to pounce on frequent opportunities.
99% of hobbyists loose money, especially over the long term when compared the the opportunity cost relative to other investments.
It’s hard to buy slabbed gold and expect a good resale unless the price of gold goes up enough. If your goal is quantity then buying as close to melt as you can and probably common GAEs is the way to go. If you are thinking more in terms of investment/return then I would not consider bullion and start researching rarity and condition and find items where the numismatic value far exceeds the bullion value.
Good input. Thanks.
Coins have been a hobby of mine for 50years now, and a satisfying one despite what occurs with pricing.
I'm clearly in that 99% as a hobbyist, and you are spot on about the opportunity costs relative to most other investments.
But I'm looking to add to gold coins primarily as a legacy for my kids and grandkids.
Nice input, thanks!
Build them each a type set
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The Pre-33 gold market is hot right now. Premiums have moved up a lot in the last year or two. I was buying MS62/63 Liberty's for about 5%-8% over melt on a regular basis 2 years ago (mainly $5's and $10's). I am no longer able to win those auctions. Last weekend MS61/62 Liberty Double Eagles were ending at almost $300 over melt (just commons). Tough to buy those as an investor and make money.
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Don't leave coins as an inheritance unless the intended recipients have shown a strong interest in coins. Consider buying a college tuition plan from your state if they have one.
My grandfather left me a Liberty type set in a Capital acrylic holder, which is precious to me.
I'd want to do the same with raw coins, though I'm concerned that at my price points, most I come across appear to be cleaned, or are just unattractive, and I don't want to make a mistake so have been focusing in on PCGS grades.
Well, the gesture is incredibly sweet, but as has been said, I wouldn't recommend leaving your family coins unless they're active in the hobby. Leaving a legacy is tremendously important to many of us and I strongly share the sentiment. The best legacy you'll leave them is your values, ethics, and character. Beyond that, they might be able to use financial support too, but that's better done with assets that are liquid and fungible.
If you go out of your way to buy top-quality coins, it might be wasted effort. Getting the value back out of coins requires some expertise. If you're gone, these coins will end up at a pawn shop at worst, with a gold buyer who will offer some percentage up or down from spot value, or at best, a dealer who will (rightly) take a cut to consign them or otherwise dispose of them.
Too harsh? Maybe, but there's lots of horror stories out there.
I pretty much agree with everything that has been said regarding numismatic coins as an investment. Buy the coins you like at reasonable prices, enjoy them while you can and have a plan for selling them unless someone in the family has shown a real interest in the hobby. There are too many other things that are better investments or stores of wealth versus numismatic coins.
My grandfather passed 32 years ago, leaving each of his six grandchildren the gold he'd collected, and none of us have sold a single coin.
We paid a B&M dealer my grandfather trusted a fee he considered fair to catalogue and price the collection, with the understanding that it was purely for the purpose of distributing it equally.
My cousins, siblings and I agreed that if anyone of us wanted to ever sell any of the coins, that they would approach the others first before letting them go, and handle the pricing the same way.
Sitting with my grandson, he's already got the bug! He talks about coins to his parents and they look at him stunned.
I'm just looking to add to the collection.
Collecting & investing are 2 separate things.
I'm a collector but I'll throw an idea out and see what the group thinks.
When I started collecting gold coins, my price point was about twice the price of gold.
Now that would mean buying saints for around 2 x $1,800 or $3,600
1/2 the value was collector value & 1/2 was intrinsic value.
I have done very well in the last 10 years but it was luck because the numismatic & gold value both went up.
My Saint Set
Low MS common date $20 gold or MS69 Am. Gold Eagles and Gold Buffalos
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
If you are young and don't care about buying the same thing over and over again, I'd buy certified common date $20 gold pieces on a regular basis. Most of your gains will come from increases in the price of gold. Over time, through cost averaging, you will have a nest egg that has generally increased over time.
When I started buy gold in the mid 1960's the official government price was $35 an ounce. Then it went to something like $42. Twenty dollar gold coins were selling for $49.95, but they were usually chopped up. As it is now, there were counterfeits to worry about although they were usually made of gold. I paid $75 each because I was afraid of getting stuck with counterfeits, and I like nice coins. Today those pieces are graded MS-64 and carry a numismatic premium.
I have made a lot of "paper profits" on some rarer numismatic gold items, but lost my shirt on some others. Some of the "blue chips," like early U.S. gold coins, have done poorly for me. Overall I have made "paper profits" and had a lot of fun in the process.
As others have said, coins are not an investment vehicle. Gold is a hedge against the worst things happening, so you should own some gold. The advise from most is that it should be less than what most collectors hold.
The gold commemorative coins are mostly losers. I have made money on the modern ones because I bought them in the secondary market, sometimes for close to melt. As gold increased, their value increased, but their collector value in zilch.
All of the classic gold commemorative coins have been losers unless your timing was perfect. The only possible exceptions have been the $50 Pan-Pac gold pieces, which are pushed up by "trophy coin" demand.
The fact that used the word investing means you have a long way to go.
gold is insurance against a weakening currency. It should only be considered an investment hedge against the dollar.
Modern gold commemoratives can be a good way to stack gold if they can be bought near melt. They will always hold that melt value as gold prices climb and dollar value decreases.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
It's very interesting that the premiums on AGE/ABEs are high enough to discourage investing as bullion.
Somehow I feel you have answered your question yourself. If buy premiums on commem gold is pretty much zero, keep buying that at melt- especially the rarer ones which carry no premium. Someday it will go up, or in the worst case it will track gold melt. No point buying anything with currently rising or high premiums that are relatively common since you want to buy those only when the premium is down.
Gold coins that trade for (let's say) no more than 30% over melt will probably be worth no more than melt when gold goes high enough that you'll want to sell, so you're generally better off with coins that trade closer to melt. But there are exceptions to the rule. The scarcest modern gold commems are probably a good example, because they are legitimately scarce and collectable. On the other hand, a dirt common MS64 Saint is going to be scrap metal at some point.
As for buying legitimately rare coins for much bigger premiums, only buy the best of the best if you're focused on ROI. Rare coins usually aren't a great investment, but you have a decent chance to do well if you buy something special enough to get the top collectors excited when the time comes to sell.
Doggedly collecting coins of the Central American Republic.
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Forget the investment angle! Love the idea mentioned to build a type set for the kids. Carries on the tradition in your family and meanwhile it will bring you enjoyment in assembling. You can also think about hoe the set would be presented or displayed.
"Got a flaming heart, can't get my fill"
Gold is a hedge against inflation/disaster. The time to buy is when melt is low.....I did this years ago, when gold was around $300-400/toz. Then, when around $2K/toz, I sold some, so my stacks are pure profit.... I did not buy any for numismatic value, except for a couple of gold error coins. Gold is high now, and I do not see it dropping significantly in the foreseeable future.... It may, at any time, rise - how much, is speculation. Cheers, RickO
If you were to graph the paper spot price of gold and overlay it over the price of gem double eagles, I think you'll find the value of ms65 Saints since TPG took hold in the mid 80's is screaming...buy me.
It's always hard to evaluate what is the best play in real time but why fool with ms60-62 pre 33 gold when for a few dollars more you can get ms65 quality.
Here's where people get confused. They see their coin they bought for $1000 ten years ago and it's now worth $2000 and think they've done pretty good. But in the meantime $1000 in an S&P 500 index fund would be worth $4500 now.
Which is fine if you get enjoyment from the coin, but you just don't need to think of it as investing, because as an investment it is a pretty poor one.
For gold coin RCI:
I like Pcgs $20 DE close / fairly close to melt plus Pcgs Slabbed Modern Gold close to melt. I just pick out nice slabbed pieces I like say AU - MS64 if can get to close BV. Mods MS69-70.
Yes many players don’t understand coins a serious investment nor really track them vs other investment venues or say analysis of performance: cost vs MV. To me a collector is someone who pulls coins from change at FV. Otherwise an investor if not dealer in the business.
Not a believer in the long term hold myth: you have to churn your investment. Otherwise too long a hold some coins may go bad in the holder (reaction to atmosphere).
Historically, gold's performance no doubt has been sub-par relative to many other investments. But with all the monetary stimulus applied by central banks, I believe the monetary regime is broken. They've backed themselves into a corner where they cannot stop adding ever greater amounts of stimulus with ever weaker results. We haven't stopped QE here since 2008. Europe and Japan's economies are gripped in a deflationary spiral for a quarter of century and counting.
The question I have is what happens when the markets fully take stock of what's occurred, when the mountain of debt forces taxes to skyrocket, forestalling growth? Gold should do great in periods of severe dislocation such as this scenario.
But that aside, I'm interested in pursuing this because I love collecting coins, especially the allure of gold, and I hope this one day stimulates an interest in their collecting themselves.
These have the lowest premiums. So I'll second this based on the OPs original ask.
But, to the OP, you mention the problem with gold commems being the miniscule premium to spot. Isn't that what you should be buying? Old commems, not new, that have dropped to bullion value?
Or are you trying to find something that will increase in numismatic value not bullion value? That is an entirely different animal.
If you want future numismatic value, you need rare coins in rare grades. But there are no bargains in this arena.
his question is about PCGS graded gold as an investment.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
Yes, but it's not clear that he's referring to a bullion investment. He's complaining about the low premiums on commems. And he complained about the high mintages on gold Eagles.
Graded modern gold comms as well as generic $20 gold can serve as an investment/gold play.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
As already noted, don't invest, collect, and wait 30 years to sell.............
Best, SH
But I might not have 30 years...
If you're thinking about PCGS ms60-63 pre33 gold for $1,950-$2,200 then you really might pay attention to ms65 Saints for $2,400-$2,500. Lowest premiums over spot percentage wise on ms65 that I can remember.
Modern slabbed gold PCGS69 / 70 close to melt. No sticker game on these. Really nice coins.
The most efficient way I've found out is put the purchase on the Wife's credit card then when the statement arrives convince her she orders things online when she's sleepwalking!
"When they can't find anything wrong with you, they create it!"
then pass...........
Realistically, every one of us are in the same position! LOL.
I'm with Ricko as I bought most all my gold from 1986-2005 when just under $300 or around $400 an ounce I cashed out on most about 9 years ago. If gold should drop below $700 an ounce again I'm a buyer, until then there's far better places to park my funds.
I'd simply buy generic AGEs as close to melt as possible and be prepared to hold a long time.
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NLI
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