I was comparing different methods and denominations for stacking gold in small quantities that are affordable. When I look at a 1 gram .999 bar (PAMP), cost is about $83 but the melt value is $61.81 meaning a premium of $21 over melt.
Then I compared a two peso gold at a cost of $125 and a melt of $85.03 for a premium of $40 over melt.
A 1/10 gold eagle costs $244 and the melt value is $191.81 for a premium of $53 over melt.
I then searched what a certain dealer is actually paying per gram for various gold jewelry depending on fineness. The average buy price for the jewelry was about $3 per gram below melt. I have come to the conclusion that it is more prudent to try to buy the jewelry at or below melt.
My dealer sells AGE at spot plus a premium, so 1/10 is spot +$36, 1/4+ $70, 1/2+ $100 and 1 ounce at spot plus + $170.
Maples, philharmonic and others have a cheaper premium, but I don't know what it is.
Selling jewelry is going to be the issue as no one will pay spot or melt as they have to refine it (our you going to send it to a metal refiner?) Look up Spagtecular on Utube and look for the video of what metals to stack. He interviews a dealer. My dealer confirmed that if you want closest to melt/spot you can buy foreign gold coins as that is the lowest profit, closest to the spot price he has. AGE have a higher premium as they are easy sell, he buys AGE over spot (that's today, could change tomorrow)
You also need to understand your state laws, some states for gold coins you just have to show your ID, other things like Jewelry may need more information and then you might only get a check as they have to hold the gold for a few days.
With jewelry you are going to have to be pretty skillful at determining authenticity and the actual karat weight. Not something you can easily do at like an estate sale. I suppose if you are adept at buying jewelry at spot you always have the potential to resell at spot+ because it is a nice piece of jewelry.
If you are looking to stack gold, paying a low premium over spot is a must. If you cannot afford, or do not wish to buy 1 oz bullion coins, the next best option IMO is to buy 20 Franc gold coins from the Latin Monetary Union. These 19th century gold coins typically trade at about 3-9% over spot.
In numismatic coin form, as close to melt as possible, and as rare as possible. After doing this for years, I have cc coins that were purchased for well below current melt.
Given the current price of gold, and low availability of the scarcer dates I like, it's time to leave it alone for a while.
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
One reason that Jewelry sells at a low premium is because there is always a risk of the purity being too low or simply of the item not being gold. Every piece is different. Even dealers with the gold test kits can make mistakes. As one person said, it is very cheap to have a 18k stamp made.
Coins are uniform so it is much easier to compare them with a known original.
My LCS sells gold maples at 6.5% over spot. he can't buy from his supplier for melt. The smaller the item, the larger the % over melt.
Quote: If you are looking to stack gold, paying a low premium over spot is a must.
You will find the lowest premium is not on coins but bars. At my local bullion shop, I can buy a 1 oz gold bar for $2512CAD whereas a 1oz GML is $2534. Saving $22 per ounce. Selling same back to the bullion shop, they buy bars at $2430 and GML at $2436. The spread for bars is $82 and for GML is $98 so a same day transaction buy then sell will cost you less on bars vs coins.
As the value of gold (or Silver) floats over time, the same cost deltas are retained.
Since the goal is not aesthetic but simply stacking and retention of value, bars win 7 days per week
You need to shop around. $244 is too high. Even right now with gold at $1973, I see 1/10 oz AGE at $229 (Momument). Flash sale going on right now at SilverGoldBull for Australia Battle of the Coral Sea for $213. I only looked at 2 places. Usually there are 17 places I check. I would stay away from anything less than 1/10 oz unless they are on supersale. Stay away from Goldbacks too.
You need to shop around when you sell too. I have never sold anything but I know prices can vary wildly. I saw a 1/10 oz AGE at my LCS for $323 when gold was at $1900. I asked him how much he'd pay if I bought some in. He said, $180!
Quote: The smaller the item, the larger the % over melt.
I find that interesting and coupled with @von's response, it sounds like the same is true when selling: larger sized pieces will get you closer to spot. Thx for helping me learn something today.
"If you climb a good tree, you get a push." -----Ghanaian proverb
"The danger we all now face is distinguishing between what is authentic and what is performed." -----King Adz
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Posted 03/01/2022 08:27 am
