Collecting Silver: More Valuable Than Gold

I'd stay far from his "advice". That's the kind of comment you'd expect on a forum board, where people just don't know any better.

PM prices are guided by investors buying 100 oz to one ton lots of gold, not those saving up for a month to buy a 0.1 oz AGE or five ASE.

Is that really true, though? I haven't purchased much gold (just some numismatic coins for my 7070 album), but my impressions is that the fractional ounce gold bullion coins carry a much higher premium (percentage-wise) than the one ounce coins. Over at Goldmart, for example, I can buy a one ounce Gold Eagle for $60 per coin over spot. A 1/4 ounce gold eagle, on the other hand, is $40 per coin over spot. A 10-ounce silver bar, in comparison, is only $0.79 per oz (or $7.90 per bar) over spot!

I think you get the biggest bang for your buck either buying silver or buying once ounce (or higher) gold coin/bullion. In a world without premiums, gold and silver would both be equally attractive. In reality, though. you just lose too much in premiums buying fractional ounces of gold. Buying full ounces of gold may be beyond the budget of many people, however, which is why silver is so attractive.

poboxw is absolutely right. When the dealers buy fractional gold from the US Mint, they themselves pay a progressively higher premium for the smaller bullion coins. These premiums tend to stay with the coins as they are bought and sold to other investors and dealers. From my limited experience, only physical neglect and damage from improper storage and handling tends to eliminate this premium on fractional coins (then they sell for melt).

For me, it all comes down to the dealer's spread. Your better PM dealer's buy price will typically reflect the fractional premium. If your dealer doesn't offer a reasonable buy back price, it's time to find a new dealer.

Barry, you may be confusing which is a better buy, as in bang for the buck, with the actual cost per item. I never said that fractional gold coins were a better buy, only that they can be purchased for amounts that are similar to the mid-sized silver bars. Yes, the premium percentage is quite a bit higher as the gold weight drops. Check out those tiny 1 gram gold bars sometime! My point was that if a person has $250 to spend, they can buy either a nice 5-oz. silver bar or a 1/10th oz. gold coin. For this amount of money, a person's cash on hand will work for either gold or silver. If they only have $40-50, then silver it is.