Premium Over Spot For 1/4 Oz Am. Gold Eagle?

I'll give the stock suggestion that saving up for a one ounce American Gold Eagle is a much better idea. There. I said it. Moving on.

Truth is, everyone's situation is different. If buying fractional gold coins makes sense to you and works for your budget, great. Just realize that the more you pay in commission per ounce, the more the gold price must rise in the future to allow you to recoup your investment, let alone represent any sort of gain.

Talking price on any PM is a moving target. That said, ounce for ounce, the commission on a 1/4 troy ounce American Gold Eagle is roughly double the average commission on a 1 ounce AGE. You might consider purchasing a new 2012 1/4 troy ounce AGE from a very reliable online dealer (APMEX, Provident Metals, Goldmart, etc) and sucking up the outrageous $40 to $45 commission. Once you get that coin, study it, get to know its physical dimensions (diameter, thickness) and KNOW what it should weigh. Now, when you've got a little expertise in your 1/4 ounce coin, start combing your local coin shops and local coin shows for the best possible commission on fractional AGEs. Also, the major online dealers occasionally run specials on fractional American Gold Eagles or Canadian Gold Maples. When you find a deal, buy!

There are lots of PM strategies and if this one works for you, go for it!

check APMEX and ebay, about 450+ each

Current melt value and APMEX data points for 2012 AGE:

Melt = $409.58
Bid = $$429.69
Ask = $458.89

So that's a $49.32 premium to melt and a $29.20 bid/ask spread. You could do a little better or a little worse.

I am in the same position as you and am considering $5 modern gold commemorative coins instead due to their lesser premium to melt and similar bid/ask spread (see Provident). Good luck!

$5 modern gold commemoratives, in my experience, have some of the lowest premiums to melt. I have even been able to find them under melt occassionally on ebay. But of course, when it is time to sell, you probably will get less than you would with an AGE.

Thanks all. I have another question. What is the "bid" and "ask" price as opposed to spot price? (I am assuming that spot is melt, correct?)

argentum is correct, or in other words, bid is what you could sell it for and ask is what you'd need to pay to buy. The difference, plus shipping if you take possession, would represent your transaction costs for one buy/sell cycle. All of the major PM companies make a market in their goods, meaning they both buy and sell continuously. You can see buy and sell prices for most everything on APMEX and Provident. For example, when I posted the 1/4oz AGE data, $5 commemoratives showed the following:

Melt = $396.26 (0.24187 oz of gold)
Bid, or what they would pay you to sell = $381.45
Ask, or what you'd have to pay to buy = $411.44

So you'd be paying about $15 over melt and the bid/ask spread is about $30. You could also view the $30 bid/ask spread as the immediate loss you'd incur.

Yes, many use spot and melt interchangeably, although you're most likely to hear spot referring to the price per troy ounce and melt as the PM content in ounces x spot.

sup, I bought a 2005 american gold eagle 1/4 oz coin back when gold was like 1620 spot price. at the time APMEX was selling it for 454 dollars, but my coin store sold the same one for 444 dollars, so I bought it cheaper locally (no shipping charge and instant service). either way your going to be paying a premium for owning the fractional coin, but come time to sell, the shops pay way above melt for the coin, your your premium is not completely lost. (for example my coin shop at the time may have bought it back for 420 dollars)