How much of a premium over spot would you pay for a UNC or proof coin?

Over the last 15months I sold off all of my silver coins that had $20 plus premiums plus over spot prices to invest in all types of silver bullion coins from the most popular mints from the U.S., China, Canada, Australia and Mexico.I have also bought several proof 1 oz .999 silver coins at auction on ebay for approximately $5-8 dollars over spot. I am using these coins as investments but mostly for my enjoyment of collecting coins and finding that one auction that seems to slip by other buyers and make a good buy. How much would you spend over spot for coins in your portfolio?

 

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Honestly that depends on the coin that you are buying. If they are silver Eagles, then I have seen anywhere from $2 over spot silver to as high as $7 over spot silver at a local dealer and online. The Chinese Pandas typically will have very high premiums on them but be careful with those because Pandas have a bad reputation of being one of the most faked coins.

APMEX will probably have some of the same coins that you are looking for at a decent premium over spot. Generally speaking, gold and silver coins that are sold on Ebay will be sold at the highest premium over spot. There are some deals to be had on ebay but not that many IMO. If you can buy locally from a local dealer, then that might help save on premiums depending on the gold or silver coin that you are looking for. Coin shows are the best in terms of finding gold and silver coins at a low premium.

 

I think $5 over spot is a bit on the high side. A good average price including postage if you buy remotely is $2.50. I've found it more useful to pay less attention to the spot price and buy when I can get ASEs for as far below $20 as possible regardless of spot. So I'd rather pay $17 when spot is $15 than to pay $18 when spot is $19.

 

I don't consider buying generic modern silver coins an investment. The numismatic premium that one would pay for these "proclaimed investments" will likely never be recovered over the long haul. If you think I'm kidding, just take a look at the current values of the SAE's or even the Silver Proof coins. There has been no upward movement in value for years, some have even dropped in value, and all the while, inflation keeps eating away at the dollar.

Chris

 

Except for the price spike in 2008, silver has been in an uptrend for many years and has been a very good investment. If you were one of the people who bought in 2008, you are correct. For many people here who have been buying steadily for the past decade or more, or more recent investors who purchased from 2009 to the present, your observation is irrelevant.

 

When someone is paying a 28-44% premium over spot, it is hardly irrelevant.

Chris

 

You are correct that the bid/ask spread on silver is higher than most investments; but very few people here are paying that sort of premium for investment silver. As I write this, mintproducts.com, a reliable and mid-priced dealer, is selling ASEs for a 20% premium. Others may be cheaper. Also, the coin shops around me are currently paying $2 over spot for ASEs, so much of the premium is recovered on resale. So any purchase for less than about $19.50 is currently profitable.

If you don't expect the future price of silver to be substantially more than $20, then you should not buy it for investment.

 

I agree with you 100%. Honestly, I think it will be quite a while before silver gets to the $25 mark and stays there.

Chris

 

Time will tell.

 

It really depends, I try to buy close to spot prices, sometimes I have gone under, but some coins sort of hit my gotsta have it nerve, and then I rationalize that since I do not have one, paying a bit more is alright.

When I first started collecting last year, I thought the new Mexican Silver Libertads were a real nice looking coin, the first ones I saw were selling for about 2x spot, I figured that if I kept my eyes open I would eventually find one for close to spot. My first coin show a dealer had lots of them but was selling them for 28 I think spot at the time was about 15 or 16, so I did not buy any.

In my travels to dealers I saw none, a bunch of the older style, and I picked up a few, usually at spot or with a small premium. MY second coin show, I decided I would bite the bullet and buy one, heck at the time spot was about 17 and I wanted one so I was prepared to pay 28, but no dealers at the show had any.

Then a while ago one of the local dealers had some, I picked up one for 25, I dipped it, because it was pretty cloudy, and it made it look pretty good, it was a 6 second dip. then a few days later another dealer had them for 21 (spot was close to 19) I picked up another, then last week I saw two more for 19 each.

The lesson I learned is wait, the better deals will come eventually.

 

time will tell on premiums..

 

I'd probably pay about $50 over spot for a good somewhat rare commemorative silver dollar. I have bought the Franklin dual pair for $60 each in Unc. A bit pricey, but these were in excellent condition, I'd estimate MS69.

I expect to get more than just melt value when I go to sells these commemoratives in the future.