Gold Bullion Questions
ARCO
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I have been wanting to buy some gold bullion and will probably buy eagles or canadian maple leafs. Just curious why the difference in price from issue to issue. Is it collector demand or some other factor? What do you gold hoarders suggest? I am looking for maybe up to 10K in Gold over the next six months.
Also, why are 2003 1 ounce eagles more expensive than earlier dates. Collector value again?
Are silver eagles a waste of time? I know tulving has unopened boxes of 500 which seems pretty cool to own.
Just curious.
Tyler
Also, why are 2003 1 ounce eagles more expensive than earlier dates. Collector value again?
Are silver eagles a waste of time? I know tulving has unopened boxes of 500 which seems pretty cool to own.
Just curious.
Tyler
0
Comments
About the difference in the years...
I've been a piddly buyer of bullion over the last few years and my take is that, for your basic bullion, the current year is always a little more and any other year is interchangable. The newest ones probably have a higher premium because of some 'collector' demand, but eventually they revert to the mean so to speak once the next new year comes out.
Exceptions are for those coins that change yearly or so like the IOM Cats (1988 is the hardest to get--the original Manx version). But that appears to be much more of a collector factor rather than as a pure bullion play. The Australian Lunar series is probably a little more collector driven as well.
About the difference in types...
In the past I have seen others such as the Panda, Philharmonic and Kangaroo go for a bit more of premium over the basic Eagle and Maple leaf, but lately that seems to be decreasing (at random I picked a site I've watched before--ajpm.com--and right now all of these have the same sell price except, as expected, the Kruggerand, and surprisingly the Maple Leaf).
Some bullion issues just are a little pricier and harder to find, like the Singapore Lion and the Britannias, so yes it's 'bullion' but also appears to have the collector factor going for it. Some don't even pretend to be for bullion (the Chinese Unicorn comes to mind), they are just pretty modern gold coins.
Anyway...
To buy gold as a pure hoard I would go for whatever you can find that seems to have a bit of a discount (like the Maples at ajpm for example) with the exception of the Kruggerands--not that I have anything against them but they are CONSISTENTLY discounted. Maples and Eagles would be my choice, very basic, standard, with the lower premiums. If you are looking at smaller denominations, the Sovereigns and French Roosters often seem to fill that niche in addition to the fraction bullion issues.
That was how I started, then I started actually LOOKING at the coins, had to get a cute little cat from IOM and boy that Panda would look nice, and the Kangaroo is just cool...oh is there more than one kind? I should look at the others, and what about a Philharmonic, haven't got one of them, and a Kruggerand, and a Britannia but oohhh that one is proof, maybe I should have a matching proof Eagle, but you know that has the same thing as a front of a St. Gaudens, and I like that eagle reverse, but now then the $10 Indian looks great too. Did you see the nice horsey on the Lunar coin? There's one on the suvarena from Bosnia too, and what about the horsey on the Sovereign, that's nice, but it comes on other coins too, and wow here is a nice website talking about all sorts of coins, I like that silver lion, but did you know there is a nice gold one on the Singapore coin?
Oops I was rambling/having a flashback.
As for silver, there seem to be a lot of factors in why the price has been depressed for so long, and I don't pretend to understand it all, but it's hard to believe it will stay there forever, or maybe it will, but if it does you have a mint box of silver Eagles, you could always entertain yourself by looking through it for anything worth slabbing
Also, there was a string not too long ago (I think the title was Gold and Silver Bullion...) where people recommended bullion dealers. You can sometimes get a bit of a deal if you are doing a volume purchase (tulving.com for example). I don't think I ever qualified for a volume buy, but then I'm looking at my little hoard and it has taken a few years to get this way. (I say looking only as a figure of speech because most is in a safe deposit box)
Well anyway, I ramble on a bit, but those are my thoughts on the matter. Probably way more input than you wanted, but hey, I like bullion coins (among others...)
"Just curious why the difference in price from issue to issue. Is it collector demand or some other factor?"
Older and different coins/brands tend to more/differently due to the collector value/demand, supply, and dealer cost.
"What do you gold hoarders suggest? I am looking for maybe up to 10K in Gold over the next six months."
The answer to this question really depends upon a few things you didn't mention. Like, how much reselling is in your future, or are your hoarding until you retire, or are you passing it down, or are you worried about survivalist issues, and so forth. My generic answer to you would be to stick with the most recognized and high quality material -- and get the most oz for your dollar. To me, that means don't pay a premium for collector value or dates, and don't buy expensive foreign coins. Until I hear more info about your situation and feelings, I will advise that you buy bulk, like from Tulving.com or Northwest Territorial Mint, and focus on gold Eagles (for maximum recognization and liquidity) and Maples (for the purest gold). To maximize profit/value, I would buy them in mint tubes, sealed, or keeping them sealed where they will automatically take on some additional collector value over time. Bars, as far as I can tell, cost about the same so I'd vote for getting the Eagles/Maples instead, for their added benefits. The exception being larger bars which, if you discover, offer enough of a discount per oz to be worth forfeiting the benefits of gold Eagles/Maples. Being legal tender, so widely accepted around the world, coins being more readily acceptable as emergency money, and getting additional collector value over time makes new mint Eagles a package that is hard to resist. I'd mix in some Maples due to their extraordinary purity and just for some diversity in your gold portfolio -- and maybe even a few bars you dig for the same reason. This way, you are diversified by region as well, and not so directly tied into the unknown future economy/minting/reputation of one country (bars offer this diversification advantage with Maples as well). I mean, it's not going to kill you to get some other foreign coins because you like them, I'm just giving you my investment view where larger numismatic premiums/considerations are out of the picture.
"Also, why are 2003 1 ounce eagles more expensive than earlier dates. Collector value again?"
I've discovered that the most recent year is cheaper than older years, so I'm not sure if you right about that. Until I hear more about your desires, I would recommend always buying the newest/cheapest year to get the most gold for your money.
"Are silver eagles a waste of time? I know tulving has unopened boxes of 500 which seems pretty cool to own."
Your question leads me to be that you haven't examined the history or viability of the various metals, but just want to get in on precious metals (which is fine). Silver has a longer history than gold as money, can go up and down in value differently than gold, but nothing compares to gold -- so to me, both are smart to own. I don't ever consider precious metals (silver, gold, platinum) a "waste of time" so I was a little confused by your comment -- do you mean a waste of time to try and sell next month, or a waste of time in an economic crisis? Both are great for many reasons. A reasonable case can be made that silver is very undervalued right now due to its historically extreme ratio to gold, as well as supply situation -- but it doesn't really matter, partly because you haven't explained your goals. I will go on basic investment goals. What matters is the long-term principle here, again, assuming you feel long-term until I hear otherwise. The long-term principle I go by is stick to quality and diversify -- with metals, there is an additional one, which is, pay as close to spot price as you can, eliminate the premium as much as you can by eliminating collector value and small lots of small denominations. So, if I were you, starting to build a metals portfolio (as I am in the process of doing) I would build one that is diversified, like any good long-term investment portfolio. Typically, in metals that would mean a mix of gold, silver, and platinum (i.e. something like 50% gold, 25% silver, 25% platinum is what I like). Or if you don't like platinum but want some diversity, you can do a mix of silver and gold -- like 75% gold, 25% silver, or even split them down the middle -- it really depends upon your personal views at that stage. Silver Eagles, bought in bulk, are hard to beat -- especially if you get them in that sealed mint box of 500. Keep it sealed, don't mess with it. If you buy bulk like that you will eliminate a great deal of the premium they carry, as well as maximize your future collector value each year that passes. With silver, I would recommend mixing in some bars because there is a big savings with bulk bars. Eagles, even discounted in bulk boxes, are still around $1.50 over spot -- but you can get bars near .50 over spot. Again, stick with quality -- known bars/rounds from known mints -- not decorative art bars or lower end rounds. I would examine Northwest (nwtmintbullion.com or nwtmint.com) and Tulving.com if I were you. Bars/rounds from either of them are great, and NWTM has great deals on silver, gold, plat Eagles/Maples too.
Summary: stick with mint tubes/boxes Eagles/Maples as your core, add some quality bars/rounds if the numbers/benefits make sense to you, and diversify with the type of metal and its form, and its region if any, buying in large chunks to keep the cost per oz. as low as you can. If you are into the survivalist thing, then study the pros/cons to those $1000 face value bags of 90% silver U.S. coins a bit.
I would recommend some heavy duty research and reading this next month before you spend a penny.
I do remember the portfolio theory that a small amount of assets in precious metals acts to decrease the overall volatility of your holdings. FoundingFather has stated the view toward long term investing immeasurably better than I ever could, and there is not room for a collector's attitude when assembling an investment portfolio.
I pretend I am investing, but I am really collecting...if I was truly an investor I would be acting out a plan similar to FoundingFather's description. It would also mean No Playing With The Silver Eagles!! (or buying proofs or any other of the traps I have fallen into, but I sure have some pretty coins
Please don't confuse an investment that is tied to other things besides the actual price of gold -- like mining costs, management, stock market sentiment, capital gains taxes, and so forth ... with owning an extremely private form of wealth protection that you have physical ownership of should you ever need it. The safety in owning paper/electronic accounts filled with the shares of a mining company is another planet from owning bullion in your safe. The mining stock doesn't even guarantee the historical and typical reason people buy gold, so I don't get your premise that it "makes more sense." Even if what you said was 100% true, investing and owning gold is different than caring about the volatility of a stock. Owning the actual gold is better if it is gold that you want -- it is not less "sensible" or worse to own actual gold like you implied.
Bullion gold and silver is OK to collect in very small quantities... and, you will pay a premium. Rare silver and gold coins will give you the same hedge, with more upside potential. I've followed the gold and silver market for years and numismatics have always been a much better economic hedge. You really can't beat buying high grade, rare graded coins as an alternative and adjunct to your investment portfolio.
While bullion in very large quantities may give you a feeling of security, the fact remains that generally you will pay a premium to spot market when you buy and a discount to spot market when you sell. Gold and silver will spike upwards occaisionally, but one would have to have 1,000's of ounces to really benefit.
Collect Key date rare silver and gold as an investment hedge!
Also, your argument about paying spot and premiums and so forth is silly -- people pay a premium or a commission for investments, that doesn't make it a bad choice. As if you don't pay a premium for slabs, high collector demand, or risk a loss when you resell? Your comment about needing to own thousands of ounces to benefit is also silly -- if you have a long-term portfolio and what to allocate, let's say, 10% to metals, then whatever amount of ounces that is, it is fine. It's about balance. Your comment implying fake security is also silly, as you imply that one is assured of more security owning collectibles over precious metals. It's not a FEELING of security, it's an ACTUAL security unrivaled in history.
When you say "you really can't beat buying high grade, rare graded coins as an alternative and adjunct to your investment portfolio" you surely aren't attempting to accomplish the same goals as owning precious metals. Buying those coins can definitely be an excellent, smart, addition -- but so can lots of other investments. To recommend one over the other as if they are interchangeable and serve the same goals is wrong. It would be like me recommending convertible bonds or baseball cards over your coins as something you "can't beat as an alternative to your portfolio" when they don't and can't offer a portfolio what coins can and do.
You would be better of saying "don't accomplish those goals or get those particular benefits, get these" instead of asserting that collectible coins are a replacement for another investment vehicle, precious metals or not. Coins are great for diversification and investment, I know - but they are just another diversifier, not a replacement for gold, and no one who understands gold or who seriously owns it in a portfolio thinks they should compare/interchange its benefits to a collectible.
Don't believe all the garbage you hear here.
Look at the gold charts and then calculate what bullion costs and what you have to pay. The math simply doesn't work! Buy gold if you want but it is a terrible INVESTMENT as bulllion.
Edited
I believe in having it all...gold bullion, gold stocks (via a mutual fund), and rare gold coins. Each serves a different role, but together they act to diversify my assets, which are otherwise heavily weighted toward stocks. Rare gold coins are a lot of fun, too!
There's a reason long-term investors, wealthy people, countries, banks, and Governments have owned, and will continue to own, precious metals in their safes and vaults -- instead of a big box of slabbed collectibles. Sorry.
Use your own judgement...do your homework and you decide what is acceptable!
Be careful people, FoundingFather claims that GOLD IS UNIQUE, A DISTINCT DIVERSIFIER, AND HAS FEATURES AND BENEFITS NOTHING CAN REPLACE! He's evil, but worse, he's WRONG.
First, I did not say you shouldn't own gold. In fact, I am a proponent of owning gold. I prefer, and I think statistics will confirm my statements, that owning gold in the form of numismatics gives one an edge if they decide to invest in gold. In all cases, one must be prudent in buying the asset.
I really don't care which they buy.... I just expressed my opinion.
Are you going to stop making believe I'm accusing you of claiming I should not own gold, or are you ready to discuss the point about collectibles being statistically "better" in only certain scenarios when compared to actual gold? I am talking about the other scenarios and goals -- you know, the ones you are supposed to CARE DEEPLY about as you respond to someone's investment probe -- instead of ignoring them and focusing on the select examples and trends you can point to.
Good grief! One thing 9/11/2001 made painfully clear is the logic of holding stores of value.
I admit, before that day, I didn't know why anyone bought gold bullion.
In the days after, I didn't know why anyone would hold electronic assets!
I love when people point to the relatively short historical graph of stocks, especially just during these last few decades when they had such good returns -- but then scoff when you point to the longer-term data about economic problems, gold and silver's track records, inflation, and wars. Part of the problem is most people think short-term, they think profits, they think things will basically stay the way they are -- they truly can't appreciate someone taking emotion and timing out of the investment equation and building for an unknown future -- one that encompasses the next half century, especially with the growing ease of weapons of mass destruction, cyberhacking, and terrorism.
This is why I almost always recommend to people (I have set up many a married couple and friend) to please include some hard assets -- like real estate (a home) -- to balance out all the assets they typically have tied up in electronic land and the dollar-based financial markets. Collectibles, like rare coins, are a great addition too. God forbid something happens to the records of these companies, God forbid some economic crisis takes place, God forbid something real bad happens. Precious metals is a legitimate part of one's hard asset mix. Saying or implying that this component should or can be replaced with something else is missing the point. Which is: nothing can replace the unique characteristics of precious metals in the myriad of circumstances they have proven to excel in.
I've asked that a seperate Precious Metals Forum be opened, but never got a response. I think because of the obvious connection to coins and collectibles, it is warranted and would be used or value more than some of the other Forums for sure.
This could change at any time, but if you sell over 24 Maples or Rands within a 24 hour period, the dealer is required by law to report the sale to the IRS.
Stiff fines assure that only the stupidest dealer on the planet would fail to do so.
In my opinion, gold should be held as insurance. At times, it should be your ONLY asset.....but those times are rare and the 22-23 year bear market in gold has shown that it is not at ALL times.
Paradoxically, gold is just about at its lowest level ever even as the reasons for owning it are multiplying daily. Dollar dropping. An endless war in Iraq. Stock market ludicrously overvalued, etc.
For bullion, I would ONLY buy the 3 top coins as they are very liquid and there is a ready market when it goes UP. Other coins (including silver eagles) trade for spot during bull markets as there is really no public demand and the metals are being melted for Comex delivery bars for the major speculators.
Gold stocks are another venue but require more study and can offer more reward. However a gold mine is a place that "might" have gold in it and gold bullion is gold
I am of the school of thought that while particulars are important, what's more important is the asset mix and how appropriate it is for your time horizon and concerns. For example, whether you buy a Savings Bond, an Intermediate-term Bond Mutual Fund, or some Municipal Bonds is less important than being out of stocks and into bonds if that is what is called for. Same for precious metals -- if you think it is appropriate/wise to have that in your mix -- it is more important that you have it, have a hard asset with its features in your hard asset allocation, then exactly how much you paid for it or whether or not you have Eagles or Maples.
Believe me, I get off on the particulars. I'm a coin collector of colonial coins -- it's endless from every angle, and deep. However, from an investment point of view, like this thread was created to deal with, how much I put into collectible coins is different than how much I should put into bullion -- even though they can both be in the mix.
Comparison charts, what's even better for ensuring profit, and feelings, are clearly secondary at best.
Anyone still think the stock and bond markets are not manipulated?
But the gold market is tiny compared to stocks and it takes much less money to drive it in a given direction.