What are fair bullion coin premiums

Discussion in 'Bullion Investing' started by bkm, Oct 27, 2008.

  1. zekeguzz

    zekeguzz lmc freak

    RONO, are you saying that the premium percentage goes up or down as price(POG) of gold goes up and down? I don't think so but had to ask.
    There are sites that the premiums are approx. 8.6% for bullion. Is that about average or what? THANKS. zg:D
     
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  3. Otter

    Otter Likes shiny objects

    Goldline

    The CEO of Goldline as on CNBC today. During the interview he said that historically 1oz American Eagles used to be sold at a 4% premium over spot with his firm taking 1% and the supplier/govt getting 3%. He said today, its more like 12% with the average premium ~$90 over spot.

    I was in a local coin shop yesterday...they said that their supplier could not provide product (gold) but was willingly buying....supply/demand is out of sync right now and its probably WAY OVER DONE...so that buying bullion right now for investment purposes is probably less than desirable. However, if its going to be used as a hedge against future inflation or a major global economic meltdown, then sooner rather than later might make sense.

    While holding hard commodities at some level is wise, if things truly go 'to heck in a handbasket', I would rather be holding something to eat....but I doubt we are that bad.
     
  4. zekeguzz

    zekeguzz lmc freak

    OTTER, what price did he say he would buy the at? Spot, above or whatever the seller could fanagle out of him. Common sense says it would take a lot of talking to get more than spot. zg:hammer::goofer::goofer:
     
  5. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    Normally, when demand is so great suppliers become buyers instead of sellers, it is a signal that a shortage may exist in the normal distribution channels. Since gold and silver are far below their highs, I would interpret this as a buy signal since the physical shortage hasn't shown up in the price yet. If you wait, it seems there is a high probability you will pay more.

    Of course that is only my opinion. We interpret the same data in opposite ways.
     
  6. umtrr-author

    umtrr-author Thalia and Kieran's Dad

    Granted, this is only going to be a sample size of one show, but it's going to be interesting to see what kind of premium bullion coins and common gold and silver will have over the "spot" price at the show I'm going to this weekend.

    I'm guessing that prices for gold coins that have no significant numismatic premium are going to be selling at the equivalent of $1000 to $1200/ounce when today's spot price is ~$770 [Wed 29th Oct 08]. Considering that I checked the US Mint site today and they're looking for $1119.50 for a one ounce AGE (uncirculated) I should hardly be surprised at this. American Silver Eagles are $25.95 at the Mint at the moment... give me a break, that's about a 160% premium over $10 spot!

    My sense is that there are too many coin dealers who "bought high" and won't "sell low" regardless of what COMEX et al think the price is today.

    Yes, a local coin show is probably NOT the place to buy such items. However, I am way too risk averse to drop a lot of cash into gold via a Kitco or otherwise. So the show will be, for me anyway, an indication of what the market is "really like." And as much as Thalia Elizabeth will want to add to her quantity of gold coins this weekend, I'll probably be actively discouraging that if the premium over "spot" is as high as I think it will be.

    I would have no problem being wrong about all of this... in fact, I hope I am! :D
     
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