Should I start buying coins instead when bullion prices are high?

I am a collector of both coins and precious metals.

Lately the premiums for gold and silver have been outrageous.

I’m wondering if now would be a good time to hold on bullion and focus on coins?

Or should I just keep stacking?

Just curious what others think. I feel really disheartened with these insane premiums since my original goal was to buy $200-$500 of gold &/or silver every month but on the other hand I am hoping that prices will go down once COVID is no longer a big issue worldwide and that hopefully people like myself will be able to buy 1 oz of silver for under $25 or 1 oz of gold for under $1700.

I think the uncertainties and fear caused by COVID caused a lot of newcomers to flock to gold & silver and that all those new buyers are the reason premiums are so crazy.

From what I’ve read precious metals prices tend to go up during times of instability, fear and uncertainty and tend to go down during times of peace and prosperity.

 

Log in or Sign up to hide this ad.

You are correct. Silver and gold have been the safe haven in times of uncertainty so premiums on top of inflated values make it a poor time to stack. I been a coin collector since the 1970’s and a PM stacker since the late 1990’s and I haven’t added to my stack for a year now. I’ll wait it out. Time has a funny way of evening things out with PM’s. Buy coins.

 

I’ll probably stick with coins then.

I just pray that prices go down eventually and don’t skyrocket to like $35/oz and never fall below $20 ever again.

At least there is a benefit both ways.

If it goes up the value of the PMs I own rises.

If it goes down I can buy more PMs and lower the average cost spent per ounce.

I like to average out how much I’ve spent per ounce on PMs so I have a baseline and it’s fun to try to lower the average cost by looking for good deal or waiting for spot price decreases. ^_^

 

PMs are PMs. Coins are coins.

It's not similar markets at all. You buy and hold PMs waiting for the price to increase to generate a profit and sell. There's a buyer waiting always. In a sense more like selling a stock.

With coins its a different game. In a sense it's more like selling a used car.

With coins there's a lot more wiggle room with subjectivity and a discerning buyer.
I don't recommend coins as an investment or for savings for this reason. I recommend them for personal collecting and enjoyment, not a value or profit.

If you trust your ability to detect fakes you can still find deals on constitutional silver and gold at pawn shops and stuff without the markups to add to your stack. Not numismatically valuable coins but bullion valued coins. You'd need to do the footwork and steer clear of the "bullion dealers" but there's stuff in shops all over, shops that aren't playing the bullion market game, sitting on stale inventory they'd be willing to let go for spot or melt. You just have to do the grind to find it, you won't get it from JM bullion or APMEX or your local "we buy gold and silver" shops. They all will have the premium on it.

I hope I gave you an idea of a plan of attack.

I don't really recommend ebay as you have to trust a lot more and won't have the coins in hand to check out before purchasing but deals exist there also without the heavy overhead on them. It's just more sketchy and more chance of picking up a fake. Vs. Being able to check it yourself before buying it.

About the only numismatic coins that really hold their value are the expensive "king" coins. Those coins that people are waiting for to appear on the market for their own collections.The key dates or condition rarities that trade easily, and even then there some play in the prices that can have you taking a loss when you go to sell.

 

I also spend between $500-$1,000 a month on coins and bullion. I consider myself a collector first and a stacker second. Even when I buy bullion I buy it with an eye towards collecting, such as date sets of world silver bullion coins or interesting subjects. All that being said I have backed off bullion at todays premiums and concentrate more on collectable coins.
In seeing your posts over the last 6 months it seems we are attracted to the same things. I have seen your purchases from Apmex and JM bullion among others for world bullion as well as coin dealers for more collectable coins. I would recommend that you establish a relationship with a select few dealers who will then cater more to your interests. The big online dealers are fine for the new products but a friendly dealer will do more for your bottom line in coin dealings.
Lastly I collect for my enjoyment. I don't worry about what others will think about my collecting style. After 40 years I know that bullion prices will rise and fall and that most of my collectable coins will sell for less than I paid for them, that's the cost of enjoying this great hobby. Very few ever make money at their hobby, they pay for the enjoyment they receive while participating.
Back to your original question I'm buying more coins from my LCS. Even his bullion premiums are more than I'm willing to pay at this time. But he is not having any trouble selling all the bullion that he can get his hands on.

 

I'm with Randy A., now is a good time to focus on better coins, and I've started trying to improve my eye on raw coins and submitting those for grading by ICG, just as part of the learning process (I know PCGS is the one you want them slabbed by for resale, but that's not where I'm at), it's been fascinating, I paid $125 each for really nice raw SLQs that looked MS and FH to me (pictures only, Charter Oak auction) and one graded MS63 FH (Full Head / strong strike) and the other AU53, Details (cleaned). Even with the closeup pictures I couldn't tell it had been cleaned (someone with a more discerning eye might have been able to), I look at the two of those as benchmarks when looking at other SLQs. I also think that it's a good time to focus on world coins, I've started getting interested in 19th century silver Francs, especially 5 franc coins (I only have a half dozen so far) and I've picked up a a few Elizabeth and Charles silver shillings, florins and 6 pence and I've started buying ancients, which are really cool. I think there are even more bargains to be had in English pennies and a whole bunch of other world coins - this site is a great resource for that sort of information for me. (Seller's pic)

 

Coins for now.

 

I wish I had $500-$1,000 to invest in coins or bullion each month. I have stopped buying from the Mint and other online sellers of PM coins.
I have enough stored in my safety deposit box that if things got worse, I would have enough to get buy, even if toilet paper jumps up to $20 a roll or even more.
Thank you for your wisdom during this terrible time of stress. (Not a joke.)

 

Some coins from the Mint can be a good deal.

Like when I bought my V75 ASE for $83 from the Mint last year. It’s worth almost triple that today due to the limited 75,000 mintage.

 

If toilet paper jumps to $20 a roll it would be like 1 ASE per roll of toilet paper lol.

Although I wouldn’t really spend mine on toilet paper in an apocalypse type situation.

Humans have lived for tens of thousands of years without toilet paper.

There are alternatives even if they might not be as comfortable and convenient.

 

Last May when the 2020 ase went from the 20 something to 30 something I stopped. I'm sure in 5 or so years they will probably be 40 something and I'll be like I would have bought more of those 30 somethings now... I was in my lcs one day and a guy came in and bought 4 gold pieces at 1900 something. I noticed days later the price of gold was in the 1800 range. So that guy already lost a little temporarily. But I overheard him say I wasgoing to buy a lot of these when they were 400 a piece... but you know at that time 1900 was unimaginable.

 

Yes the toilet paper craze was those people who wouldn't survive an apocalyptic situation because they are the types who are dependent on the system. They are the first ones to perish...

 

I have also, due to the outrageous premiums, put my stacking on hold. It also seems that collectible coins that contain precious metals have went way up in price.

To satisfy my addiction to precious metals, I have recently bought Canadian silver dollars and half dollars at spot price. I paid no premium. They are nice looking coins, but only 80% silver.

I will wait until when or if prices go down before I buy more silver or gold.

 

Me too, Coin dog. I am stacking Canadian Silver Dollars, commemorative coins and mint proof sets.