Gold bullion vs. gold coins

I am a little curious about some historical information (if someone has it handy) and perhaps some advice. I am wondering if the price of AU55-MS60 gold coins (liberty and indian types) have held value or increased as dramatically as the price of gold over the last few years.

My question is that I have a 2006 and 2007 gold buffalo, and I am planning on buying a 2008 very soon (my thought is to continue a "set" of them in the 1 oz version). Since everyone has to buy them currently at a traditonally higher price, is it likely that they will every be available at a traditional bullion price is gold drops to a lower price (say $600-700/ounce)? It is a bullion coin after all. My dilemma is whether to buy a St. Gaudens double eagle for my type set instead, and see if the price goes down on the gold buffalo....Any thoughts? Thanks in advance; I rely on the advice of those who have been collecting much longer than I have to help out with these types of questions. I really only collect rather than invest, but I sure would like to spend my money smartly! Glad to finally register and be part of the discussion.

 

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The price of bullion coins follows the spot price of the metals. If gold drops to $600 next year the price of gold bullion coins will drop accordingly. That is unless sales (and mintages) of 2008 gold bullion coins are very low due to the high price of gold this year, in which case the bullion coins may carry some numismatic premium for collectors.

It is really hard to say exactly what will happen but remember bullion coins are bullion. Not all coin collectors collect bullion. If you buy bullion coins you are really investing in the metal content (for the most part).

 

If oil and gas prices drop 50% then gold might follow to the $600-700 range. Think that will ever happen? Only way gold will drop to those prices again is if our country no longer remains foreign oil dependent. And the chance of that happening in our life time? Not a chance. Compare the barrel of oil price to gold price when gold was at $600 and let us know what you find.

 

For value and collectable purposes, I would prefer the Lib or the Saint over the Buffalo any day. Honestly if you go for low MS coins, say a 60 for the Lib, and 62-63 for the Saint, you can find them at 5% over melt sometimes.

I would much rather have a 80+ year old coin that something new.

 

My rule of thumb is that a common date MS60-61 $20 Liberty is "worth" about $125 more than the spot price of gold. When you can find one for, say, $50-$75 more than spot and you are confident of the grade, then it is a good buy. A VF $20 Liberty is essentially bullion. Are these better than the new bullion coins? Nobody knows. $20Liberty and St. Gaudens coins started out in life as the bullion coins of their time. The bullion coins of today may have some numismatic value in the future; but probably not too much.

You can make a pretty nice type set out of the various $20 gold coins and modern one ounce gold coins. To me, this is preferable than trying to put together date sets of Buffalos.

 

People actually spent $20 Saints and Libs as my grandmother remembers my great grandfather giving my great grandmother a $20 Saint or Lib at the start of each month for household expenses. She even saved $2.5, $5 and $10 gold coins that my uncle now has. My point being the older gold coins really were monetized and used, nobody today is going to spend an American Eagle for face value. I like the older gold too.

 

They were legal tender of course and used in commerce, but played a large role as a form of bank reserves and for settlement of international trade balances. Your family was apparently far richer than mine. When everyone was requested to turn in their gold coins in 1933, my family didn't have any to turn in.

 

If you are buying Libs or Saints, never buy below EF. VF's if you can find them, are marked down because of the grade - not a good selling point later.

Heritage goes to shows with lots of EF-AU coins dated from the late 1870's on up that sell for something like 5% over bullion value.

 

I realy liked the design on the gold buffalos, but I don't think I really want a date set (although that was my original intention from a few years ago). I would rather have a nice looking ms62/63 double eagle instead.

And there is no way the price of oil drops dramatically any time soon, or ever. Although I sure could use a little of those record quarterly profits from ExxonMobil; I could really put together a nice type set.

Thanks for the advise and your time

 

bullion vs coin

i loved both.

 

I agree. They are only worth bullion value.

 

Cloud hit the nail on the head.

"Common" DEs (usually Libertys, but not always) can be had in low MS and high AU grades for a relatively small premium over melt. They possess a Numismatic quality that I believe few bullion coins will ever have. Furthermore, there is something truly special about owning a 100 plus year old gold coin- this history, the art, etc. Lightly circulated ones can be handled carefully too without lowering their Numismatic draw/value. This is something few folks will ever get with an AGE or a Buffalo. They are beautiful no question, but those coins will likely remain in a holders or capsules for decades to come, and their Numismatic upside is generally much more restricted.

As has already been written, the value of bullion coins is more closely tied to the price of gold than are Libertys or Indians. Even with a decrease in the value of gold it is likely that true coins, one actually minted for circulation, will not "suffer" as much as will a round. Bottom line? It depends on your personal preference and what you hope to gain.

 

all very good points but remember you are judging the road ahead based on the ground covered

 

I tend to agree, but for close to equal money I'd rather have the $20 Liberty just because, well, it's a $20 Liberty!:hail:

 

Me too. I go for beauty and experience over busy and youth anyday. I admit I like the Liberty's a bit better than the Saints, especially in circulated grades.

 

obverse and reverse designs

i like obverse and reverse design with a beautiful female wearing gown. like british soverign and st gaudens. chinese panda and american eagle.

 

I always liked the liberty design over the saints too. I'm sure that is a minority view.

 

If you can collect Liberty's or any gold coin and purchase them at bullion rate, go for it. This is what I try and do. Now if you have to pay because it's a MS 69 or MS 70, then you might have to pay collectors premium but other than that, you have to work the marketplace.

 

I don't care for the Morgans either, I think they are buggly. I do like the Peace and SL and Bust varieties though. You will see NO Morgans on my USA page. They are simply bullion to me.