Looking to invest in Gold

Hey, Drusus. I think the difference between investing in gold and purchasing a gold ancient as an investment is pretty broad. If you are looking to invest in gold, then you are looking to buy your gold at a price that is as close to the spot price as possible. $2000 should be purchasing about 3 ounces of gold for investment purposes. If you spend that money on the coin above... which I highly doubt is 3 ounces, then you are no longer investing in gold, you have decided instead to invest in a rare coin. It may be made of gold, but the price of the coin is not related to its gold content, so its value will not move proportionately to the price of gold... which would be the point of investing in gold.

Still, it's a very cool coin, and if you wish to own it, then I say go ahead, just don't consider it a "gold investment".

Take this one for example....



Salzburg (Independent Bishopric), AV Ducat, 1788, Hieronymus-Graf von Colloredo-Walsee ruler

Salzburg (Independent Bishopric), AV Ducat, 1788, Hieronymus-Graf von Colloredo-Walsee ruler
HIERONYMVS D:G:A.&.P.S.A.S.L.N.G.PRIM.
Bust of Hieronymus right, wearing cloak, cross and hat
Crowned, mantled arms
3.5000g, .9860 Gold, .1109oz AGW, 22mm
Mintage: Unlisted
KM 463

PRICE $800
**********************************************************************************

.1109oz AGW for $800. Multiply by 9 for approximate price for 1oz and you're paying about $7200 per ounce.... a far cry from the current spot price for gold.

 

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Howdy,

You mention buying 'as close to bullion value as possible'.

This more or less precludes Proofs directly from the mint and also rules out gold coins with a numismatic premium. Fine. Buying gold can still be very interesting from a coin collecting perpective - [read: it doesn't have to be a stack of BU Gold Eagles in a tube in your safe.].

Others have posted sites like apmex where they show you the various bullion type coins from around the world. You could collect one of the different types from the different countries sort of like collecting silver crowns.

There are also many 'bullion' type gold coins from this country that have been minted over the years and you could create a type set and still stay within shouting distance of bullion prices. For example, you could get all the current fractional gold eagles, the buffalos (supposedly coming out with fractionals this year), and then go back and get the fractionals in the liberty series (those without any numismatic premium) and the st. gaudens series. Granted these will not be without some sort of premium over spot price, but by buying common dates, you can minimize the mark up to a point where it should be recoverable. Indeed, with the older gold types, you could buy them slabbed and still stay with common dates in reasonable MS grades and minimize the numismatic premium while helping to insure their later sale.

just some thoughts,

peace,

rono

 

You are absolutely right, rono. It doesn't have to be a stack of eagles or maple leafs. There are many types of coins that can be had at a good price relative to gold price. Many of these do have a collector premium attached to them that will remain attached to the value of the coin. A common date St. Gaudens double eagle will cost a decent premium over spot, let's say for the sake of argument that you can find one for $750, roughly $100 over spot. If gold moves up to $800, that double eagle will move up relative to its gold value and will likely keep its collector premium as well. However, I doubt that a coin selling at 9 times spot price will move with the gold market in the same way... which is why it becomes a big difference from being thought of as a gold investment.

 

yes, this is the coin I was wanting to buy...Although I know its over the gold content price wise...it is interesting and very valueable and I assume the value of the coin will not drop in a drastic way...would that be right? I would think a nice old historic coin like this would mostly rise in value over the years....or at least not drop in a big way.

 

thats nice...very cool coin , tho i have no knowledge of world coinage. buy what makes you happy and weigh the gold content/numismatic value formula vs current price/ historical price /numismatic premium. also remember if it is a numismatic investment, will you be forced to liquidate at any time or is it something you can take your time to sell? best wishes on your decision.

 

I cant predict the future but this is long term...I am hoping not to sell for a long time...if ever in my lifetime...maybe hand it down....I am looking to buy quite a few....so I might go with a few like this (historic) to hold onto and hand down and a few krugerands..purely investment that can be sold when needed...

 

Okay...I think what I am going to do is buy a few Krugerands first....THEN look into buying a nice historic coin like the one above....then I have straight investment covered first...can you tell I am wishy washy? I just dont want to do anything stupid.

 

there is always a market risk. you just have to decide what this means to you if gold were to drop to $250-$300 an ounce. when it comes to investing i try to think...how am i going to sleep at night??? if i am going to lose sleep over market fluctuations, then it may not be worth it and i would be better off w/ conventional investments.. this is only my own opinion. only you and your family can decide whats right for you.

 

I think you have to consider the liquidity of the coins you buy down the road, you never know if you have to sell at some point. Ancient roman coins have less liquidity than modern US gold. Also there are modern us gold coins that are close to bullion value that also have collector value attatched to them. It is the collector value that will bring you many times the return that the price of gold can, and you might reconsider your approach.

As far as modern coins that are able to appreciate, many have doubled or tripled their money over the last year on modern us gold coins. The reverse proof coins is worth up to six times what people payed. The 2006 unc w have already doubled in value [except for the ounce coin]. Go for low mintage and graded coins 69 70. You may be best waiting and buying new releases from the mint so as to get the price price down the road.

Also you might want to consider the proof platinum and w unc platinum coins that will be released. These are type coins that have shown good appreciation with the recent releases.

 

I saw this on Ebay today, this price is insane cheap-

http://cgi.ebay.com/2006-W-PCGS-MS6...ryZ39483QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

1/2 ounce of a pcgs ms 69 coin with a mintage of 14,000 for $500./ This coin will be worth a few thousand in ten years easy, probably worth a thousand today. If I only had more money.

 

The sky is falling ...said Chicken Little

 

Krugerrand coins.

Drusus,would you buy full Krugerrands,or would you just buy fractional Krugerrands? I reckon that buying the fractional Krugerrands,especially the 1/10 Krugerrand is better,as you will pay far less tax on them.Here in New Zealand,we have to pay 12-1/2% G.S.T. on them.Only pure gold coins don't attract tax on them.

Despite popular belief,the Krugerrand & the fractionals are NOT pure gold.They are 22 carat fine gold,just like the 1/2 Sovereign,Sovereign,Double Sovereign,5 Pounds,& the 1 & 2 Rand (1961-83).

Aidan.

 

Do you think that is legit? I would go for it right now if I werent a bit scared of ebay...

aidan, I was planning to do a 1 oz. krugerand at 647.50 USD...mght rethink that now...might go for a sovereign, or do as you say and do fractional.

 

Drusus,US$647.50 for a full Krugerrand? I didn't think that they were commanding that sort of price.You're better off buying a 1/10 Krugerrand,as it is cheaper than a Sovereign.

Aidan.

 

Thats the price for a 1 oz krugerand at apmex

10 or more are 5 dollars over spot (651.30) but I couldnt do that...they only have the 1 oz available there.

at kitco the same coin is going foe 672.98...not sure why there is such a difference in the price.

neither of those places have fractional krugerands...

 

Okay...you are right...I have always enjoyed collecting for just the sake of 'buy what I like' and I have always been happy doing that. I DO want to step up to coins that are of 'investment' value...but I do not want to stress over this hobby I love so much.

I sat down with my wife...We agreed to buy a 1 oz. Krugerrand because one bug focus of mine is portraits and it has a nice portrait...plus all the other benefits of this coin as an investment.

My wife likes the Gold Buffalo / Indian so we will get one of those. After that, I will just buy what I like. Our thought on the matter is that a gold coin with historical and aesthetic value will also be a great investment (if not as easily liquidated) and we are buying for the long term so we are willing...if forced to do so...to take the time if we have to sell, and we can mix it up...get other coins here and there that are more investment like a corona...We decided to keep to our tastes and build a fantastic collection with some special gold pieces that we truly love enjoy and that just happen to be gold. Since we DO have a bit more money to invest in coins...we figure we can just open the door a bit more to some of the coins I have always loved but passed over because of cost...I have always wanted a Krugerrand so thats a good start

GD...thanks...you kinda put me back into perspective

 

You gotta do what's going to make you happiest overall. I stressed about it when I first started buying coins... a whole half a year ago. Then I learned to view it in two different ways. Investing in a metal is like buying stocks. It's not something that you do necessarily to look at and appreciate for its history. You do it to hold that particular security. Now I have two categories. If I feel like I want to add a coin to my collection, well, then I look for a coin with numismatic value and add it as part of my hobby. If I feel like I want to add to my investment holding, then I search for something coin, bar, round or otherwise at the best price I can get. I keep them separated just as I wouldn't add stock certificates, CDs, or savings account statements to my coin collection. They're two very different worlds and I think should be viewed as such.

Don't do anything that you're not comfortable or happy with. There's no reason to lose sleep.

Whatever you buy, I hope that its value increases many times over for you.

 

Buying 3-5 ounces of gold every year is not really investing. If you took that same $3,250.00 and put it in a simple Index fund, that keeps pace with the S&P 500.... that is investing...and your return will be much greater over the next ten years.

What if gold spikes and you don't get out at the right time..what if gold dives and never recovers?

Gold is only one basket, you need to be diversified and not keep all of your eggs in one basket. Instead of asking a coin website what to buy, get some real investment advice. Precious metal funds are great for diversification. You can own gold, silver, platinum without ever having to take possession and worry about security issues associated with keeping gold in your home.

You may feel better holding a coin in your hand but that one Kuggerand is not going to go up much when compared to other investment opportunity. Just make sure that you are getting sound advice and not just "buy this coin or that coin."

 

I have other investments...I in no way am putting my eggs in one basket...I do not need advice here on investments of other kinds as I have a father who is an accountant and REAL good with money and investments and he guides me in that area...this is an investment in gold coin...I certainly thought people here could help in that...this is a different subject matter apart from my other investments. My father was, in fact, the one who questioned why I dont buy gold if I am going to collect coins and shell out money, why not buy ones that have real worth?

If I am going to invest in gold or any precious metal...I want to be in possession of it... I have just bought a very large safe and it is about to be bolted to a concrete slab...if someone wants to steal my coins, they will have to do a lot of work.