I am new to posting on the site but have been following in the forums for the last 6 or 8 months. I have been in silver coins and am contemplating a gold purchase. I am looking at this as an investment. I also do enjoy collecting US Coins, which is what lead me to Silver investing in the first place. So my question is how do many of you feel about investing in bullion solely for investment purposes vs. buying a collectedable US coins such as Quarter/Half Eagles. Does anyone beleive the Numistmatic value of any Quarter/Half Eagles will outpace the potential increase in the coins intrinsic value? It seems with higher gold prices, the numismatic value and intrinsic values have come really close together. I really appreciate your opinions and love reading the great threads on here! Thanks
There are gold bullion coins and gold collector's coins. There of course is crossover on this but there will be little numismatic value on most common AGEs, Krugerrands, etc. This will depend of course which country you live in and may change over time. For example, bullion Pandas in the USA have shot up in value because many are being bought up and sent back to China. The Mint sold the gold UHR as a bullion product, but only ~100K were minted and the numismatic value on this coin is easily 100% over the last couple of years. Legal tender gold bullion coins are self assayed and are easier to sell. You may have to pay to have gold bullion bars assayed when you sell. You will have to decide which is better for your situation. Generally for small amounts, buy the coins. If you are going to buy a large amount, go with the bullion bars from a well known mint.
I would always buy coins over bars. If you plan on buying numismatic coins for investment, the price should be reasonably close to melt value. Otherwise you are better off buying American Gold Eagles. The bid/ask spread on collectible coins is too wide to make them decent investments. Bullion coins make better investments.
So that begs the question. How would you classify something like the First Spouse coins? Bullion or Commemorative? How about the ATB 5 oz Silver Bullion Coins. Bullion or Commemorative or both? I would think these are clearly crossovers.
Great question. The only way to answer is to more clearly define terms. First, may I take the liberty of assuming the term "Commemorative" means these coins behave more like collectible numismatics and less like bullion ? If so, we then discuss the difference 'twixt collectibles and bullion. Bullion is easy; it simply tracks the value of spot. Not in terms of absolute dollars, but in terms of percent change. For instance, consider American Silver Eagles. Yes, they cost more than spot, as do all .9999 fine "coins" around the world - maples, pandas, philharmonics, etc. Each tracks spot... if spot goes up 3%, they go up 3%. That's not true of collectibles. Yes, with low numismatic premium, coins act like bullion (% change = % change). However, when one moves up the collectibles ladder, the numismatic premium gains a life of its own and begins to seperate from (or dominate) the bullion value. Take $20 Saints, for example. If gold spot is $1450, a $20 has about $1375 worth of gold. A low grade, common date Saint is worth melt. But let's say it's a rarer date, or a high grade coin, worth $4100 (triple melt value). In that case, spot price can move significantly and have little effect on value. In the case you quoted, some of those pieces act like bullion. I much prefer them to bars - as Cloudsweeper stated - but MOST will track spot. There are some important exceptions, since some FS coins bring a hefty premium (Jackson's Liberty, for example). The numismatic premium elevates them above spot quite a bit.
Welcome to CoinTalk! Don't get me wrong, I LOVE my numismatic coins. I am fonder of them than I am my bullion - however - I am very weighted toward bullion for one simple reason. Numismatic coins will only retain their value as long as the person you are trading with respects that value. In a worst case scenario, any hard nosed individual will be reluctant to give you more than melt value. Assuming that you always have a plethora of potential buyers, then I think numismatic coins will surely outpace bullion, but only based on rarity, for example as with Morgan dollars. You can get some at practically melt value, and others for thousands, and again, that assumes your buyer has knowledge of this value and agrees. (I was lucky enough to pick up some 40% Kennedy's for under melt value at my last coin show!) So it depends, and bullion is the safer bet for the most scenarios IMO. I do have my share of 1 oz collectible rounds as well, but I'm not banking on getting more than melt for them. I just like to collect
