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 Replies: 24 / Views: 2,646 |
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Pillar of the Community
United States
5855 Posts |
As some of you may recall, I finally decided to dip my toes into the gold market back in late September when prices plummeted down to $1600/oz. Rather than buy straight bullion, I decided to buy a $20 St. Gaudens Gold Double Eagle in AU or better condition from APMEX. I ended up paying around $1820 for the coin, but I didn't mind since my thought was that the coin had a significant amount of numismatic value that would remain even if the price of gold kept plummeting. Well, I just checked current prices at APMEX and, with gold currently at around $1680/oz. the price of the same coin I bought is now down to around $1736. That's a drop of $84 in price while gold rose $80. All I can think of right now is that APMEX jacked up the prices of the coins when the gold price fell because they knew people would be in a buying mood, and that makes me a little mad... Edited by barryg
10/15/2011 08:15 am
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Pillar of the Community
United States
3540 Posts |
Yep...that is the way APMEX operates. The price on what may happen on the future and it is ALWAYS higher. |
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Pillar of the Community
 United States
5855 Posts |
Well, it would have been bad enough had the price of the coin remained stable while gold prices rose, but for it to actually drop $84 is really just beyond the pale. I can't believe I would have been better off waiting for the price of gold to rise significantly before buying.
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Pillar of the Community
United States
3294 Posts |
It's really only an issue if you want to sell it now. And believe me, it is better then what I did in the last couple of months when I got 500 shares at 10.30 of a company and today they are running at 7.75. Since I don't need to sell, I am not worried, but I would have rather gotten those extra 150 shares...
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Pillar of the Community
United States
2049 Posts |
It's all about supply and demand. Maybe the supply was lower and demand higher when you bought it, and that trend could have changed. Also, why be mad at APMEX? They didn't force you to buy the coin. You made a purchase knowing that the value could change right? So how is that the fault of APMEX? Edited by CoinHunter53562
10/14/2011 2:00 pm
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Pillar of the Community
United States
5855 Posts |
Yes, I bought the coin knowing the value could change. But I assumed (and we all know what that means) that the value of the coin would rise and fall along with the value of gold. As I said, I was willing to pay the $120 premium for the coin because I felt that buying numismatic gold would hedge against a loss in value if the price of gold fell dramatically. It never occurred to me that it would go the other direction, and now I'm wondering whether it was such a good idea in the first place.
As I said in the title of the thread, I'm more frustrated at anything else. Yes, my own ignorance is at fault (this was my first gold purchase after all), but that doesn't make it any less frustrating.
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Pillar of the Community
United States
2049 Posts |
Just so it's clear, what did you pay for the coin? You said you paid a $120 premium, so did you pay $1720 since you bought it when gold was $1600?
What's throwing me off is that you mention $1736 today, a drop of $84, so adding those two together gives $1820. Maybe my caffeine hasn't fully kicked in yet lol. Maybe I am overthinking this but just want some confirmation. Thanks
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Valued Member
United States
425 Posts |
The title of this thread is "A Little Bit Frustrated", not "this is all the fault of APMEX!". I have felt that "Frustration" also. I am pretty new to this forum and was "WOW"'ed by the advise and comments ref. PM's that many put out here. I had to learn not to get too excited by the opinions of others, and really made my own choices based on what I feel is correct. For example: I saw a post that suggested that "The Experts" are thinking that silver could drop into the $7 to $15 per oz. range and that would be the best time to buy! I also noticed that statements like this are commonly put out by folks w/less than 100 posts! You have to remember that what you are getting here is opinions, some come from experts that have been dealing in coins and PM's for decades, others.............. well, who knows who is out there in cyber-land! |
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Pillar of the Community
United States
931 Posts |
Prices are a temporary thing. They may have bought a bunch and want to control their inventory. I called them a while back just to see what their buy price was and they are not generous in what they offer for premium gold coins. I guess you just have to keep the big picture in focus and not worry about day to day prices. I would watch ebay to see what people are actually paying for that coin. You may find that you did all right. There are no guarantees, but in the long run you will probably do just fine. There is a lot of false confidence in the world economy right now and APMEX may just be trying to get some cash flow while business is slow. |
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Pillar of the Community
United States
5855 Posts |
Quote:
Just so it's clear, what did you pay for the coin? You said you paid a $120 premium, so did you pay $1720 since you bought it when gold was $1600?
What's throwing me off is that you mention $1736 today, a drop of $84, so adding those two together gives $1820. Maybe my caffeine hasn't fully kicked in yet lol. Maybe I am overthinking this but just want some confirmation. Thanks It's not you, it's me. I paid $1820 for the coin when gold hit $1600. So I guess that's a premium of $220 and not $120. I guess as gold prices dropped throughout the day the premium got higher and higher to compensate and I probably just didn't pay close enough attention. Ah well, at least I have my shiny gold coin and, in the grand scheme of things, it's not like overpaying is going to take food off my family's table... |
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Pillar of the Community
United States
3592 Posts |
Just remember when you gamble, there is a chance you will lose. And that's all the PM game is...gambling.
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Pillar of the Community
United States
2335 Posts |
Here's a few things about buying PM's that many people overlook.
In general, you pay a premium over spot when you buy & get slightly less than spot when selling. That puts you behind right from the start.
Prices for a dealer's stock don't always follow spot prices. If there is a large drop the dealer can/will increase the premium over spot to avoid a loss. When things smooth out premiums drop.
In most cases the "numismatic premium" is not a real hedge against a price drop in the PM price. The vast majority of the price for common date coins is the underlying value of the PM, a premium of $100 over spot is just 6% when the PM is $1600. If the PM dropped 50% to $800 you would still have a loss of 47%.
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Pillar of the Community
United States
667 Posts |
The first problem that you have is checking the price everyday. The second problem is that if you are going to buy numismatic coins then buy then high grade and slabbed. I may get hammered but so be it, numismatic does not necessarily mean a better investment in gold or silver. My advice buy the gold with money you do not need today, let it sit and watch the price. When you are ready to sell then shop the buyer, that means going to who will give you the best price. Most times these will be individual buyers who will be willing to pay closer to the spot price and possible factor in some gain for a non graded numismatic coin. APMEX does a great job, however there are others that may do as good or better. Personally I would not consider this - $20 St. Gaudens Gold Double Eagle in AU or better condition - a good numismatic coin. There are just too many of then available. |
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Pillar of the Community
United States
5855 Posts |
You guys are making me cry...  |
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Pillar of the Community
1028 Posts |
You didn't do that badly. First off, gold can still rise back up much higher and you could sell your coin for a profit from the original purchase price. Secondly, Although I agree your particular coin is not a great numismatic piece, it should do better than bullion if gold drops way down.
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Pillar of the Community
Canada
3692 Posts |
Gambling? I've never had a lottery ticket that was still worth something after it lost. The price drops but you still have the metal. Where's the loss?
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Replies: 24 / Views: 2,646 |
Posted 10/14/2011 12:52 pm
