Gold coin questions

[jkrk]

I will admit that I am a novice when looking at the gold coin market.

 

Paper Gold? I've traded often.

 

Gold/silver futures? I fully understand and actively trade them.

 

Generic gold versus numismatic gold coins?.. Two different businesses. Numismatic interests me less although I will probably buy CC $20 gold piece soon. Sunken treasure? Maybe I'll buy a piece or two? Very high grade / rare date double eagles? again ... maybe flyer or two?

 

Here is where I'm less certain....

 

Pre 1933 versus modern bullion coins? I guess the price differential (premiums) are a major factor regarding which has more value? Generic gold seems to be relatively cheap at the moment? Which currently is better value?

 

Where do most collectors store coins / bullion?

 

Is Brinks safer than a bank vault?

 

Does anyone have their bullion insured?

 

What percentage silver should one have versus gold?

 

Is it better to have some overseas?

 

I guess some of the answers depends on the reason one owns the coins?

 

I've read quite bit from paranoids to survivalists to some who just want paper hedge. I guess, Their answers to some of the questions is dictated by their outlook.

 

I was wondering how / why many on this site collect coins?

[RWB]

What's the annual dividend on gold or silver?

[physics-fan3.14]

Pre 1933 versus modern bullion coins? I guess the price differential (premiums) are a major factor regarding which has more value? Generic gold seems to be relatively cheap at the moment? Which currently is better value?

 

Where do most collectors store coins / bullion?

 

Is Brinks safer than a bank vault?

 

Does anyone have their bullion insured?

 

What percentage silver should one have versus gold?

 

Is it better to have some overseas?

 

I guess some of the answers depends on the reason one owns the coins?

 

I've read quite bit from paranoids to survivalists to some who just want paper hedge. I guess, Their answers to some of the questions is dictated by their outlook.

 

I was wondering how / why many on this site collect coins?

 

A lot of questions here.

 

Buy classic gold over modern gold any day. The coins are far more beautiful, far more interesting, and far more significant. Modern stuff is merely bullion, produced by the millions. You own it to own gold. Classic gold is a treasure, you hold history in your hand. The premiums are fairly insignificant as well.

 

Most collectors store their gold/collections in safety deposit boxes, or a robust home safe.

 

Brinks has armored cars, I wasn't aware they offered long term storage. Store your coins in a safety deposit box.

 

Any valuables should be insured. If you are an ANA member, they offer insuarnce policies through an affiliate that is specifically geared to collectors.

 

The percentage of silver vs. gold question makes no sense. Buy what you like, or what you see the most upside in (you seem to be approaching this from an investor standpoint - analyze based on the numbers and buy what you think is best. You've probably heard the "16:1" ratio number, but that is nonsense)

 

Why on earth would you send anything overseas?

 

What reason are you wanting to own the "coins?" (I don't consider "bullion" to be coins - they are disks of metal stamped by the mint to facilitate owning precious metals. Coins are intended for commerce)

 

 

[Raisethis2]

I agree with everything Physicsfan stated above however, the question of ratio, gold to silver is strictly a matter of tolerance and nerve by you. If you're holding metals as a percentage of a portfolio the ratio of gold to silver depends on your reading of the metals markets. You can buy rolls of uncirculated quarters and hold them to see if they appreciate or you can buy a single gold coin. The markets don't necessarily move in lockstep but, one sure weighs more than the other.

[Mr. Smith Guesser]

Something to consider on the percentage of silver vs. gold question.....

 

People often think of gold and silver to be brother and sister metals. However, when you consider each metal's end use, they are actually quite different.

 

According to the World Gold Council, roughly 90% of the annual gold demand currently comes from the jewelry and investment markets, with the rest (10%) coming from industries. Source: http://www.gold.org/supply-and-demand/gold-demand-trends

 

Meanwhile, the World Silver Institute reports that about 45% of annual silver demand comes from industries. Source: https://www.silverinstitute.org/site/wp-content/uploads/2013/06/WSS2013Summary.pdf

 

 

Point is, gold is seemingly more of an 'investment' metal while silver is more of an 'industrial' metal. It's almost like the two metals are opposites....almost. So to answer the original question I would strongly consider these numbers when figuring out a ratio of your gold-to-silver holdings because they are really not equivalents.

 

That old 1:16 gold/silver ratio was used in the past to price the metals because it was believed that was the ratio of gold to silver present on Earth. It's pretty much irrelevant today.

 

(need to note that the WGC's 2013 are preliminary and the WSI won't publish their 2013 findings for a few months)

[BillJones]

I generally agree with what Physicsfan wrote, except that I am not quite as enthusiastic about non collectors owning older, numismatic gold coins as he is.

 

There are a lot of pit falls for non-collectors when it comes to numismatic coins.

 

First, you have choose the RIGHT numismatic coins. That means that you have to have an eye for what collectors really admire in a coin. The technical grade on the slab, even if it is correct, is one thing; eye appeal, which gets you better prices, is another.

 

Second, the investment holding period for numismatic gold is often longer than it is for bullion gold. If you buy bullion you might wait until the price goes up, and then you sell. With numismatic gold, you have to wait for the collector market, which might not move at the same time as the bullion market. You have pay a higher premium relative to melt for the numismatic gold, which might push the holding period to a longer time.

 

Third, you need more negotiating skills when you sell numismatic gold than with bullion gold. For bullion gold the buying prices are melt plus for most coins a minor premium. (For some items like South African K-rands at one time, you might get less than melt That sucks.) With numismatic gold you have a collector premium, and some dealers are willing to more, if they have immediate customers, than others who be buying for stock. Also some dealers just pay better than others.

 

Physicsfan is right about the interest level. To me American Gold Eagles and Buffalo gold coins are mostly just lumps of gold. That is why I only have a limited number of them in my collection mostly for type (examples of a design) coin purposes. The older coins are FAR more interesting. But if you are not a collector, all of that will simply go over your head.

 

Collectors tend to buy well because they study the market and their coins. For them research is not "work;" it's fun. This collector interest makes it possible for collectors to hold their coins long enough so the their "investments" can mature. Of course collector interest can also keep you from selling when you should have sold. It can work both ways.

 

I hope this puts the bullion versus collector coin into perspective for you.

 

[Nutmeg Coin]

Asset preservation should be the #1 concern when it comes to investing or speculating.

 

I agree that the high end for grade coins with eye appeal near GS minimizes risk; but good luck finding those. When I seek to sell low risk nice coins they go very quickly.

[mkman123]

Collect what you like and enjoy it

 

When I first started, I was on the bandwagon and if people like MS64 pcgs/ngc morgans, then I better get some too! I didn't have much fun following what the market or what others collected

 

Now I just get what I like and have found a certain part of numis that is interesting to me vs being scattered all over the place (I'm really liking CC mintmark coins). If I make money in the long run great, if not I had fun.