Why I think old gold coins are a decent investment.

This is only an opinion..

Silver coins exist in too high of numbers.

Gold, the price of it goes up and down, as do most investments.

BUT, when gold prices hit extremes, many gold coins got melted, because their bullion value exceeded their numismatic value.

But..looking at the charts, when gold and silver went down, so did the coin prices, but precious metal prices kept falling when it seems gold and silver coins hit a "bottom".

Look at the price of Morgan dollars, even "junk ones", they always have a premium higher than their silver value, EXCEPT when silver skyrockets in price, as many morgan and peace dollars got melted during the spike in the 80's.

So I think gold coins are safer than just gold, because if gold prices fall, the coin itself will be worth more than the gold price, protecting your investment somewhat better had you just bought simple private mint bullion.

 

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That's quite possibly the worst advice you could give, Detecto.

While gold coins currently have numismatic value, the only ones with a significant premium over spot prices are extreme rarities. The premiums for these coins are several multiples of the spot price, which means they're generally low liquidity. The price gets floated, since they rarely go up for sale.

Someone could say the same about an original painting by Marc Chagall. The price is unlikely to fall, since the people who own them are unlikely to be in a situation where they're selling the piece at a loss. If they're expecting to take a loss, they'd sooner donate it or pass it to the next generation. The only time these sell at a loss are when people who know nothing about art history end up in an auction and overpay, then realize they don't like it that much.

If you're talking about more recent issues (post 1934), the actual sales of gold coins typically mirrors the gold value of the coins themselves. In fact, in the case of commemorative coins, they sometimes sell at a discount to the gold value.

Saying that gold coins are a good investment due to their numismatic premiums doesn't really consider how the numismatic premiums are derived. The same logic you apply to coins could be applied to jewelry. If you're able to get high end jewelry for melt prices, that would be a great investment. However, if you have to pay the artisan premiums, then they're likely to be a horrible investment, relative to simply buying gold. I think the same holds true for gold coins v gold bullion: The premium you pay for the rarity of the coin isn't likely increase over time, since information is widely available on the internet today. It's far less likely for a pawnbroker, goldsmith or even a refiner to melt a "rare" coin (which is what you're talking about), since the media constantly talks about how people found a gold coin worth tens of thousands of dollars. Yes, a thief might sell the coin for melt, but the coin itself is highly unlikely to get melted.

 

I always thought numismatic value = bullion value + numismatic premium (if any).

Never thought that numismatic value was ever less than bullion value.

 

I just wanted to say I like how you used Chagall out of all the artist you could have used. He is my favorite.

 

First, if "silver coins exist in too high of numbers", why do you go on to make more of a case for Morgans/Peace than you do gold? Honestly, Tim... did you bother proofreading?

I get the point you're hoping to make in that disaster of a post, but as with every single time we get one of your coins as investments threads, there are rather obvious factors that you're ignoring. It's not worth getting into again, but I will ask how many times have you bought a coin, claimed it was this or that, and when you lost interest and decided to sell, "lost [your] shirt"?

 

Hey Books, want to enter into a pact to not respond to Tim's posts, regardless of how inane and pointless they are?

 

Where would be the fun in that?

 

I think your best bet is to walk around and start digging in hopes of finding ancient golden treasure. That way you could sell said treasure way over spot price and you didn't pay a dime for it!

It is the perfect plan!

 

Nah, the Feds would catch onto it soon enough. Then they'd want their share. Better to pan gold in the wilderness.

 

I think the feds would want their "fair share" of your hard panned gold too.

 

Heck.....I just won't tell them where I've been.

 

Wouldn't there also be the issue of ownership rights? I don't think you can randomly dig holes on property owned by others, nor even on public lands. You'd end up having to surrender whatever you found until a court determined ownership.

 

Oh, I'd always ask permission first.

 

Gold coins are a miserable investment. Seriously. That said, I believe every person that can should own some - as a asset protection plan - not an investment. I think of gold coins as a form of wealth insurance. I do not believe in owning them in the vain hope of them increasing in value but as a means of protecting the assets I have accumulated.

 

This is precisely what Gold bullion is for as it will always protect your wealth. If I had the extra money I'd buy all the Canadian gold that I possibly can. Any spare change should go to silver and gold bullion IMO.

 

I just don't think any coins are a good investment unless you are buying 7 digit uber coins. The coins us common folk buy just don't produce the returns that other sectors can, especially when you calculate in the loss from transaction.

 

Why would you do that?

 

Detecto, I think that silver and gold are incapable of being compared to as better or worse. They're different, and your arguments are invalid.

 

In the time that I've been here, Detecto has listened to the advice of others exactly zero times. You will notice, after being here for half a year, that he generally rehashes previous posts and never really considers the opinion of those who respond in his threads.

 

You mean walk away from the train wreck? Not sure if I want to miss it when Timmy finally "propels us 1000 years into the future".

What about the graveyard? Oh, that's right.. someone's already picked it clean.