What to buy for gold? Bullion or Coin?

[axl911]

Been thinking about buying some gold as a hedge. What is better to buy? American Eagle coins or bullion/bar? I am thinking of in term what would be easier to re-sell and will hold their value better?

[HardDrive]

Its gold. Its a commodity. Its value can go up or down, but it doesn't depreciate because of wear.

I've occasionally bought gold as gifts for my Indian wife's relatives. Canadian Maple Leafs work for me.

[id10t]

Problems with buying coins is that you end up paying for coin value as well as gold value. Flip side, when you sell, the same happens, but that extra coin value may fluctuate more than the raw gold value.

[axl911]

Would coins (American Eagles) be easier to sell than bars?

I also hate the 22K on the coins vs. the nearly pure gold content on the bars. But I am concerned with how easy to re-sell when I need to.

[VincentVega]

Why not just buy gls instead? I get the hedge part but the transaction costs, storage, insurance dont seem to add up to me. I'm not that well informed, what's the benefit to owning the real thing?

[Hugh R]

on2wheels52 (Jim) could probably give you more insight into liquidity than anyone here.

I had some dental gold melted and cast into a ring once. The jeweler used some kind of micro ohm meter to establish its purity. IIRC he said bullion is easier to fake than true circulated coins.

Vince the same jeweler also said with gold always take possession. A lot of the other guys will sell you the certificate and also to ten other people.

[futurefun]

Coins either Maple Leafs or American Eagles from local dealer for cash. There have been bogus bars. Ask about their pricing & look for referrals. Junk silver, circulated coins, is worth considering as is a well stocked pantry.

[red-beard]

I like junk silver, since it is far easier to divide into small units. And people know dimes, quarters, halves, etc.

Most of the junk silver I purchased ended up being dimes. Cheaper if you don't choose. Be careful, some places will sell you stuff so worn out you can barely tell it is a coin.

James

[imcarthur]

Buy from a legitimate bullion dealer. Bars are fine - they are all serial numbered & this should be noted on the invoice. When you sell them, just take the receipts in. There is just something cool about a 10 oz lump of 99.99 gold.



Note: Counterfeiters - I have altered the SNs on these photos.

Ian

[craigster59]

One of the guys I work with, besides the fact he is not the sharpest tool in the shed (dad got him the job), is also a "doomsday prepper" type. He orders silver coins from some company that advertises on survivalist forums, militia sites, etc.

About a year ago he gets a package with $22,000 in gold eagle gold coins sent to him instead of his $500 order of silver. He calls the company and straightens it out, seems the coins were supposed to go to James Hetfield (guitarist) and he is going to ship them back. He goes around blabbing to everyone about how honest he is, and proceeds to place them in a small box and leaves them on the shipping dock for UPS to pick up. Now everyone knows what is in this little box and it's just sitting out there in plain sight. I gotta give a lot of my co-workers credit for being honest, they all knew there was $22k in untraceable gold coins just sitting on the dock that anyone could have snagged.

[MRM]

Gold is up a little for this year, but the overall trend is down and will be for a long time, barring unforeseen events (which I suppose is the point). But with QE2 or 3 or whatever within sight of being sunset, inflation still strangely absent, and interest rates set to rise again, there is a lot more downside risk than upside. There are number of formulas economists use to figure out the long term historical "value' of gold, given world uncertainty, inflation, interest rates, monetary supply, etc. By most measures gold is still over valued because of perceptions formed during the great recession and it should be in the $800 range, given today's environment.

Just something to consider. Otherwise, just call around to brokers and use the one that has the best reputation and lowest commission.

[on2wheels52]

Originally Posted by axl911

Been thinking about buying some gold as a hedge. What is better to buy? American Eagle coins or bullion/bar? I am thinking of in term what would be easier to re-sell and will hold their value better?

Ideally I would like to buy pre-1933 US gold coins in fine-xf condition for close to their gold weight (a $20 Liberty or St. Gaudens for near the same price as a $50 Eagle or Maple Leaf). But of course in the real world there is a premium to be paid for either one. I am unable to conjure up an equation or formula to determine whether coin A or bar/round B is the better buy. When people bring in their gold I use my scale and calculator and make my offer. But for you as a buyer I think you need to know what the piece is worth to you and say what you are willing to pay.

re "I like junk silver........."

But silver is so bulky compared to the equivalent dollar amount of gold. I think axl is considering a significant position.

"Most of the junk silver I purchased ended up being dimes. Cheaper if you don't choose. Be careful, some places will sell you stuff so worn out you can barely tell it is a coin."

The shoe's on the other foot, if you don't choose they're going to give you the dimes because they're less desirable (harder to count, if nothing else). And it doesn't matter if they're worn out, you need to be buying them by weight rather than x times face value. So I'd rather buy worn out Mercury dimes and standing liberty quarters than even xf/au Roosevelts and Washingtons because I don't have to sort through looking for the clads (post 64's).

And hats off Ian for your 10 oz AU bars. No one has brought me any of those. But getting back to the op's question, how easy will it be to re-sell them and how close will you get to spot?
Jim

[imcarthur]

Originally Posted by on2wheels52

And hats off Ian for your 10 oz AU bars. No one has brought me any of those.

I can take no credit for their acquisition, I am merely the last one standing so I ended up it. Significantly, it is $800-$900 gold. I missed the peak so I buried it in a big bank vault for the long term or the zombie Apocalypse - whichever comes first.

Ian