Gold bullion vs. Generic Numismatic Gold

[Citroen2CV]

Hi all.

 

From an investing point of view, which is a better long-term investment: gold bullion (AGE, Maple Leaf, etc.) or common date MS63/MS64 Saints, Indian Head Eagles, half-eagles, etc.? This question may have been asked before, but I couldn't find it if it has. Thanks.

[comicdonna]

I would guess the coins would be a better long term investment. Also, they may hold a more stable value, through the ups and downs in gold prices. I have no idea but, thought I would share my opinion.

[Brol]

Yeah, if I would be the one who is buying, I would always choose common date Liberty's or Saint Gaudens over freshly minted .999 Bison or American eagle coin. But that is only me..

[jpcienkus]

I agree with the two above. The numismatic gold would fair better than the bullion.

[wdrob]

In my limited experience thus far I have learned quite a bit by using the Coin Explorer and the Price Guide where you can click on a price of a given grade of any particular type and year of a gold coin and then view the trending and price history change and charts.

 

Take for example a 1908-D 'No Motto' $10 Indian in both AU58 and MS62. If you were to compare the two over the past 8 years you would find that the AU58 has averaged nearly 14.5% gain per year where the MS62 averaged a 11.2% gain per year.

 

If I have $3,000.00 or so to spend on an addition to my short set, I am going to search and find the most appealing and high end AU58 that I can in the $900.00 to $1,100.00 range rather than spend the entire 3 grand on a MS62 that has, over the past 8 years, not performed as well and, many times will not look as good as the AU58.

 

As far as moderns such as the AGE - I have watched them closely during the recent ups and downs of the gold spot price and I found that the MS70 or PF70 coins values did not waiver yet those of the 69 and below seemed to always follow the spot price. So in my opinion, the nominal premium of a 70 over a 69 is worth the added stability if you were to choose to purchase the modern bullion coin.

 

As for strictly bullion versus coins; bullion has no secondary value (in most situations) and must rely solely on spot price for its value at any given time. Coins, on the other hand, have the added layer of numismatic demand to help stabilize the value despite small fluctuations in spot metal prices. To me they are two entirely different animals. I think you were referring only to bullion coins though so that was irrelevant.

 

Nothing I have stated is intended to be absolutes. The bottom could fall on anything in a moments notice no matter how many charts and graphs one looks at but if you enjoy what you are collecting then any losses are much easier to swallow.

 

Didn't mean to write all that .... It just kind of happened.

 

 

 

 

[DaveG]

As wdrob said, with AGEs and other bullion coins (except for MS-70s and proof coins), you should only have fluctuations in the price of gold to focus on.

 

With Numismatic gold coins (even common dates), you not only have fluctuations in the price of gold, but fluctuations in the numismatic premium to focus on.

[MarkFeld]

Hi all.

 

From an investing point of view, which is a better long-term investment: gold bullion (AGE, Maple Leaf, etc.) or common date MS63/MS64 Saints, Indian Head Eagles, half-eagles, etc.? This question may have been asked before, but I couldn't find it if it has. Thanks.

 

None of us know the answer to that. I am curious as to why you think someone would know.

[FishyOne]

I prefer classic gold coins and when found in true MS condition for near melt value? That's the way to go.

[BillJones]

I am a coin collector so I much prefer collector gold coins to the bullion pieces.

 

If you are talking about speculating in gold bullion or "investing" as some buyers and sellers like to call it, my preference would be to buy certified, common date $20 gold coins. Obviously the higher the grade, the greater the numismatic premium over the melt value, but with real collectors' items, your feet in both worlds.

 

You are buying almost an ounce of gold bullion, and you have a stake in the numismatic market as well. Both factors can result in gains or losses, but at least certified collector coins are quite liquid. Many dealers buy and sell them, and at least in the lower grades some dealer support bids on a sight unseen basis. That means you don't have to be a grading expert to trade in them.

 

If you want to buy bullion gold, I'd go with the U.S. Gold Eagle or the Canadian Maple Leaf. I don't care for the Chinese products because of their lack of interest in controlling the counterfeiting of U.S. collector coins. That is my push-back.

 

Believe it or not I had hard time selling South African K-rands years ago. This was years after the country's racial policies had changed. It seemed illogical to me that the bias against that country's products was still in force, but it was.

 

[jom]

Based on my life experience my suggestion here is NEITHER. For a Long-Term investment you should probably stick to something that generates cash flow while you own it. If you want a hedge against inflation I'd probably go with the numismatic coins...although I'm not all that certain it's a good hedge either.

 

But as Mark pointed out none of us really know this answer so you should take all of this with a grain of salt. Myself I collect coins for fun so what do I know?

 

jom

[Citroen2CV]

Thanks for all of the feedback.

 

wdrob: Thanks for the analysis on $10 Indian Eagles. Good food for thought. It's my 2nd/3rd favorite (depending on the day) gold US coin. St. Gaudens $20 gold is #1!

 

jom:all money being spent is "discretionary"(i.e. my allowance!) so cash flow is not necessary as such. My hobby is shiny silver and gold discs and if they gain value over time, all the better. Problem is gold discs are expensive, so I am still looking for the "best bang for the buck".

 

Billjones: Agree about Chinese bullion, don't want any for same reasons. I had heard about the negative of Krugerrands. Apartheid's long shadow from the grave still surprises me.

 

Again thanks for your thoughts.

 

One last thing on a totally unrelated topic: How can you change your password on the chat boards login? I forgot mine and the only way I can log in is by getting the temporary password. Is there a way to get your original password without creating a whole new file?

 

 

[jom]

Go under "My Stuff" then "My Profile"

 

Since you are using "discretionary" income I'm not certain your question is really about investing. My suggestion then is to put together a nice set of coins (type set maybe?) by learning as much as you can about the series. That will do far better than some ugly beat up bullion coins.

 

jom

[Citroen2CV]

jom: Thank you for the password info! I am working on a type set, and will simply buy the old gold because they are simple more beautiful than the modern bullion coins.

 

Happy new year to all.

[Houston Investor]

If I were to go back to 1990 shortly after the market crash I would buy Modern World Gold and Bullion Gold, basically anything I could get close to melt. My goal would be to accumulate x number of ounces while at the same time have some nice gold coins to retail from my case at shows along with my other material. I would also buy quality large size currency AU - Gem CU and attractive national bank notes. Really nice $10 Brown Backs would be especially desired. According to the blue sheet, the mint state gold CMI index compared to 1990 (1000) is 725.16 - you can draw your own conclusions. This does not mean there are not US Gold issues which have advanced considerably like the 1911-D $2.50 Indian and the 1909-O $5 Indian.

 

As far as the future, well who knows.

[ComicConnoisseur]

I am going with physical gold bullion just for one simple fact in that more young people collect or purchase it. You said long-term, and in 20 years these young people will get nostalgic for their 2014 Gold bullion American Eagles much more then their grandparents 1914 Saint Gaudens.

 

[Free Timer]

Either one ebbs and flows on the price of gold. I do both and don't worry so much. Bullion, as with coins also have a premium depending on grade. Another advantage is you can put certain bullion into an IRA. Coins, Not.

[Free Timer]

Gold and silver are down now, may be a good time to invest, in either one. Or watch it go lower.