Can buying older gold get you closer to spot?

Ive been contemplating buying some gold but I am trying to find something close to spot (obviously) and preferably something with some sort of extrinsic value as well if possible. In the past I have seen some $20 gold pieces sell for right at or close to spot and im wondering if anyone else has ever pursued this route. Maybe sometimes these coins are overlooked because people are trying to buy straight bullion? Any thoughts?

 

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You are not alone, as I've been contacted by many who are searching for "Classic" Gold at spot pricing.

I personally wouldn't buy anything offered that wasn't certified at least "authentic", but constantly watch the markets, and haven't seen any sales of legitimate material at the pricing you desire.

JMHO

 

Most of the world's circulated gold is available from dealers as 'bullion coins' with no special numismatic value. It may be that in the future they will command more of a premium but there are a lot around and most are the usual lightly worn examples from circulation.

http://www.goldline.co.uk/bullionCoins.page

Here is a typical list of what is available with the older coins mixed in with the common modern bullion coins. Prices are in sterling but it will give you an idea.

Buying from a dealer will always involve a mark-up, the canny buyer will buy where the dealers buy but it may be more complicated to find such sources than the saving is worth.

 

Don't you wish gold depreciated like cars?

Chris

 

Near-spot and numismatic-value, you can't have it both ways. If the price of gold goes up, the premium gets smaller and smaller. This is why during silver's last big run-up, common proof sets disappeared from the marketplace, as both dealers and collectors cheerfully broke them up for their (pre-1965) 85 cents face value in 90% silver, and thus you could buy proof Lincolns and Jeffersons by the roll.

If you pay any meaningful premium for old U.S. gold now, you will be defeating your purpose, as when bullion coins increase, at some point your U.S. gold will bring only bullion price. That's not to say you might not find a MS-66 double eagle out in the marketplace, but it would need to be slabbed, and if the seller paid to have it graded, he wants to recover his costs, and you're right back to a bigger premium again. The bullion I've bought consists of 98% silver dimes and 2% gold, absolutely no platinum or palladium, thanks. Yes, they are a pain to store, and they're very boring...

On the other hand, buying only dimes has let me assemble a nice set of Mercuries, now missing only 3 coins, and with 20+ AU-BU sliders after 1936.

 

There have been a lot of specials lately from the bullion dealers where you could buy gold for spot or extremely close to spot, even the fractional gold bullion coins.

 

Apmex sells some foreign gold for prices reasonably close to spot. I have purchased a handful of gold coins from them and are very happy with what I bought.

 

True enough about Apmex, but the problem comes when you need to sell it, and try to convince a buyer (even an unsophisticated LCS) that it's 0.900 instead of 0.800 or 0.521, etc. It's the gold nobody wants except a hoarder, that's why it's cheap.

 

my gold/silver people tell me there are Three schools of thought on this:

One Approach: Buy Gold or Silver Eagles or another Gov't-issued coin (Canadian Maples, OZ-Koukaburras & Koalas, Austrian Philharmonics, etc); pay the premium and you'll supposedly get your premium back at resale? This approach is supposedly the "most main stream" as everybody knows these coins... ?

Other Approach: Buy Gold or Silver Rounds from private mints in which the premium is way less & pay as close to spot half as possible ... ?

Yet Another Approach: Buy privately minted ingots (from NTR or OPM or instance) which apparently have the same premium as the Rounds... ?

I'm guessing that the Rounds would be as recognizable as Gov't Issued among the Gold Community, right? So why pay extra?
John in Garrett Hill PA Radnor Twp FedDistrict#3: Philly

 

That's been the case in recent years AND decades -- but that's because the premiums to bullion were astronomical for high-grade coins after the experience of the 1970's (gold up 20-fold) and 1980's (numsimatic premiums went from 100% to 1,000% for some coins).

Confused here....why break up the sets, why not sell them as-is with the silver coins valued more highly ?

Premiums for many DEs -- let's say MS-65, the Gem Dividing Line -- are actually LOW by historical standards. Premiums take many years to dissipate as sellers are 'sticky to the downside' to accept the New Reality. Prices for actual commodities adjusts more rapidly, whether it is gold, silver, or oil, as you have seen recently.

Here's some charts for Saint-Gaudens premiums through the years:

 

I think they do that to get new customers on their mailing/call lists.

 

Liquidity....most people are more comfortable with the most familiar...that means COINS.

They like them better plus if they are more willing to buy that than pure silver/gold, they feel if they ever want to sell it that someone will feel the same way.

While the premium on ASEs is getting up there, the coins are still affordable such that if you are buying them regularly or dollar-cost averaging, you will do OK and the premium will not impede your being up on your total investment during the next multi-year rise (whenever that is).

 

Why would ANYBODY buy rounds or ingots when 90% is cheaper??? In a crunch, when you're trying to buy small items like gas or bread or milk, do you want a silver dime (0.072 ounce Ag) or an ingot/round (1.00 ounce Ag) in your pocket??

Who is going to make change for you? Who, out of a totally stressed-out and desperate and skeptical population, is going to believe your privately-minted round's real silver and not just silver-plated crud? Think about it.

By the way, which rounds are "Gov't Issued"?

 

If we ever get to the point that silver is actually used in common daily transactions people will figure out how to test if its real. (imo of course)

Still a good idea to buy some 90% in my opinion, although its actually more expensive than .999 right now on the retail level. The cheapest I see 90% silver on any retail site is $1.99 over spot per oz, where as there are many options for .999 generic rounds for less than a $1 over spot.

 

Isn't the whole point that it doesn't?

 

For the person who can't afford it, no!

Chris

 

Pretty much anyone can afford gold, they sell 1 gram bars for around $45-$50. You can even get smaller bars (half gram, 1/10th gram) but I wouldn't recommend it since the premiums are too high.

 

No liquidity compared to the same $$$ amount in ASEs, IMO.

Silver coins from yesteryear will always have some demand, but among newer buyers of silver products it might not be as popular as today's modern coins.

 

What do you mean no liquidity? I and many others will buy up all your grams of gold if the price is right.

 

You guys will...active buyers...players.....message board posters.

The average person who checks the price of silver every few days or less frequently will want ASEs.