OT: Where do you go to buy gold bullion on SD

[OwnerOfCalifornia]

[quote=flu]Hey, quick question… Why do people prefer coins versus bars?

It seems like the markup over spot price for gold bars is tiny compared to coins. For example, this one is only $8 over spot prices…

http://www.ebay.com/itm/121826620158

Are bars generally less popular?[/quote]

I’ll try…

First, and at the risk of dabbling in gold-bug nuttery (I am not one), the paper spot price of any PM and the retail prices of physical bullion products shouldn’t affect your purchase decisions. Yes, you’ll pay a higher premium for an American Eagle, but you’ll sell it for a higher price. Generally, I think the only way to narrow your spread is with quantity, not product.

As to your question, I think it’s part psychological & cultural. We know and understand that coins are “money”, but bars are something more mundane and inanimate.

I further think that for whatever reason, as far a bullion goes, coins are just more popular, hence more expensive. So many infomercials shill mint-proof coins, coins used to be (maybe making a comeback?) a popular graduation, retirement, wedding, etc. present. You can buy fractional 1/2, 1/4, 1/10 coins of at least Eagles and Maples.

Also, insurance for home storage? Pretty much no homeowners/renters policy covers bullion (or cash for that matter) over a few hundred $$$. But (I can only speak for my insurance) I can purchase a VPP (valuable personal property) rider for about 1% / year of the value of the *coins*, but bars are apparently not insurable under any circumstances with my policy.

[Coronita]

[quote=OwnerOfCalifornia][quote=flu]Hey, quick question… Why do people prefer coins versus bars?

It seems like the markup over spot price for gold bars is tiny compared to coins. For example, this one is only $8 over spot prices…

http://www.ebay.com/itm/121826620158

Are bars generally less popular?[/quote]

I’ll try…

First, and at the risk of dabbling in gold-bug nuttery (I am not one), the paper spot price of any PM and the retail prices of physical bullion products shouldn’t affect your purchase decisions. Yes, you’ll pay a higher premium for an American Eagle, but you’ll sell it for a higher price. Generally, I think the only way to narrow your spread is with quantity, not product.

As to your question, I think it’s part psychological & cultural. We know and understand that coins are “money”, but bars are something more mundane and inanimate.

I further think that for whatever reason, as far a bullion goes, coins are just more popular, hence more expensive. So many infomercials shill mint-proof coins, coins used to be (maybe making a comeback?) a popular graduation, retirement, wedding, etc. present. You can buy fractional 1/2, 1/4, 1/10 coins of at least Eagles and Maples.

Also, insurance for home storage? Pretty much no homeowners/renters policy covers bullion (or cash for that matter) over a few hundred $$$. But (I can only speak for my insurance) I can purchase a VPP (valuable personal property) rider for about 1% / year of the value of the *coins*, but bars are apparently not insurable under any circumstances with my policy.[/quote]

Interesting. I did not know that.

[OwnerOfCalifornia]

[quote=flu]Interesting. I did not know that.[/quote]

Yeah, I am talking only about USAA. The same goes for jewelry, firearms, high-end camera equipment, and a few other things for which you’ll need a VPP rider. I suspect other companies are basically the same but I could be wrong.

When I was on the phone with USAA, they barely even knew what bullion was and had to put me on hold while they looked up coverage for such things. They thought I was a “coin-collector”.

[Coronita]

[quote=OwnerOfCalifornia][quote=flu]Interesting. I did not know that.[/quote]

Yeah, I am talking only about USAA. The same goes for jewelry, firearms, high-end camera equipment, and a few other things for which you’ll need a VPP rider. I suspect other companies are basically the same but I could be wrong.

When I was on the phone with USAA, they barely even knew what bullion was and had to put me on hold while they looked up coverage for such things. They thought I was a “coin-collector”.[/quote]

Don’t people use bank safety deposit boxes. Or is that a no no?

[milkspot]

I prefer coins because coins have reached collectible status just like stamps, sports trading cards, lego sets, etc. Bars have not. So the price of a coin is it’s melt value + collector’s premium. This premium can grow over time and also fluctuates.

For example, you can purchase the 2016 gold panda for about $50 premium. However, per Ampex.com, you can purchase the 2015 gold panda for about $350 over spot and the 2014 gold panda for $500 over spot. If I were to buy a bar for $20 over spot today, it will most likely be just $20 over spot years from now. I am willing to pay the extra premium for coins if I feel that premium will increase over time. One reason for this that there are limited mintages of some bullions and rarity factor generally increases with time.

But I find that this is also true with bullions which I think are not meant to be collectible. They become collectible anyways like the gold American eagle. I am talking about the “regular” gold eagle not the proof or burnished versions. I believe they are generally minted to demand (not so sure this but it looks like it) but still their premium tends to increase gradually. I think this true as long as there isn’t an abnormal spike in sales.

In times when gold is out of favor, not much gold eagles were sold. In 2007, 140,016 1 oz regular gold eagles were minted. In 2009 and 2010, 1,493,000 and 1,125,000 were minted, respectively. I think this was time when gold was on the rise and reached a peak in 2011. If you are discipline about your buying and buy whether gold is in favor or not you may get lucky and end up with a “key” date. It may be that 2007 becomes a “key” date that a collector has got to have if he’s to complete his collection.

If you can find the right buyer you can realized much of this collector’s premium.

[OwnerOfCalifornia]

[quote=flu]Don’t people use bank safety deposit boxes. Or is that a no no?[/quote]

Yeah that’s fine, and I have a bank box. The bank does not necessarily insure the contents! Check about your options with that

[quote=flu]How are you guys storing your coins[/quote]

I buy generic vinyl coin sleeves, fits any gold & silver bullion that I have. And the coins I’ve purchased locally are protected as such. Search on Amazon, etc.

[Coronita]

I see. So buying bullion is a lot like getting a random year coin in that it really is only melt value.

OK…. For coins or bullions I prefer to buy only freshly minted ones. I figure it is unlikely buying a 2016 minted one will be fake since they will first hand from mint to reputable seller like apmex. The random year coins are probably.second hand, and although a reputable dealer.should have screened them.for fakes, you never know if one slipped through the cracks

How are you guys storing your coins? Do you actually get plastic cases for them? Its kind of annoying each coin is a different size. I bought a box of cases for the American eagle, and its too big for the maples and too small for the Austria coins. I cheated for the Austria coins and just trimmed the foam for the eagles.

[Coronita]

[quote=OwnerOfCalifornia][quote=flu]Don’t people use bank safety deposit boxes. Or is that a no no?[/quote]

Yeah that’s fine, and I have a bank box. The bank does not necessarily insure the contents! Check about your options with that

[quote=flu]How are you guys storing your coins[/quote]

I buy generic vinyl coin sleeves, fits any gold & silver bullion that I have. And the coins I’ve purchased locally are protected as such. Search on Amazon, etc.[/quote]

Is there any issue with coins tarnishing if they aren’t kept sealed in a box? Will that affect resale value significantly?

[OwnerOfCalifornia]

[quote=flu]Is there any issue with coins tarnishing if they aren’t kept sealed in a box? Will that affect resale value significantly?[/quote]

I have some krugerrands I bought 12-13 years ago, dated from the 1970’s. They look really good, not perfect mint-state, and the were sent to me in the vinyl sleeves I speak of. I don’t think they’ve changed at all (but that’s just me eyeballing vs my 13 year old memories) and the sleeves aren’t sealed. That’s the thing about gold that the ‘bugs’ harp about: chemically, it’s almost indestructible. My eagles and maples in unsealed sleeves are similarly fine after years.

I’d be more worried about silver, but the silver I have looks great after many years,no change that I can see.

Yeah, anecdotally I think the resale value will be affected if your bullion gets damaged or tarnished, but buy prices shouldn’t sink much lower than spot.

[Coronita]

[quote=OwnerOfCalifornia][quote=flu]Is there any issue with coins tarnishing if they aren’t kept sealed in a box? Will that affect resale value significantly?[/quote]

I have some krugerrands I bought 12-13 years ago, dated from the 1970’s. They look really good, not perfect mint-state, and the were sent to me in the vinyl sleeves I speak of. I don’t think they’ve changed at all (but that’s just me eyeballing vs my 13 year old memories) and the sleeves aren’t sealed. That’s the thing about gold that the ‘bugs’ harp about: chemically, it’s almost indestructible. My eagles and maples in unsealed sleeves are similarly fine after years.

I’d be more worried about silver, but the silver I have looks great after many years,no change that I can see.

Yeah, anecdotally I think the resale value will be affected if your bullion gets damaged or tarnished, but buy prices shouldn’t sink much lower than spot.[/quote]

What if I took all my coins one day and decide to melt them all down into one big slab? Just kidding….Though it would be more convenient to transport I think.

[Coronita]

I have another dumb question. Why is the spread between spot price and ask price so large for metals like pallidium and platinum? Spot prices of both is lower than gold but ask price is much higher from spot. Is it just because the metal is not traded as much? How do those two compare to gold?

[OwnerOfCalifornia]

[quote=flu]I have another dumb question. Why is the spread between spot price and ask price so large for metals like pallidium and platinum? Spot prices of both is lower than gold but ask price is much higher from spot. Is it just because the metal is not traded as much? How do those two compare to gold?[/quote]

Don’t know about this one, your guess is as good as mine–those metals just aren’t traded as much and don’t have the ‘investor’ appeal of gold & silver I guess.

Platinum & palladium are industrial metals (like silver, sort of) and are used in catalytic converters. I wonder if their under-performance relative to gold over the last few years is due to the thinking that we really are in the twilight of the ICE era.

[Coronita]

So last week, I’ve made the decision to start purchasing platinum too. Unfortunately, I have never been able to find platinum deals that were at spot prices or below…

So if any of you have any suggestions, I’m all ears.

I’ve been reading that throughout the gold and platinum’s history, there has only been two periods of time when the price of platinum is less than gold, particularly since platinum os much rarer than gold (gold isn’t actually that rare).

So…Either gold is currently overspeculated or platinum prices just haven’t caught up yet…or both…

[milkspot]

I have the same question so I can’t help here.

I’ve been taking advantage of the Ebay’s Ebucks for a few years. I’ve seen plenty of chances to buy gold coins near/below spot but I have not seen the same with platinum.

The lowest cost for platinum I know is the occasional Platypus through Bay Precious Metals’ Ebay store front. It runs about $50 – $60 over spot.

[Coronita]

[quote=milkspot]I have the same question so I can’t help here.

I’ve been taking advantage of the Ebay’s Ebucks for a few years. I’ve seen plenty of chances to buy gold coins near/below spot but I have not seen the same with platinum.

The lowest cost for platinum I know is the occasional Platypus through Bay Precious Metals’ Ebay store front. It runs about $50 – $60 over spot.[/quote]

I got your tip about eBay bucks and its worked out well for me on gold. I’ve been able to get gold coins some as low as 50-60 below gold spot when eBay has the special 8% or $100 bonus bucks. With platinum I haven’t seen anything lower than 50 above spot, even with eBay the bonus bucks.

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