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 Replies: 30 / Views: 5,296 |
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Valued Member
United States
461 Posts |
Its very true that there is more common gold coins then there is collectors, so that means the majority is bought and sold by those doing it as a bullion item. This can be good from a collector standpoint as you won't pay much more than melt for nicer grade common gold but at the same time if gold ever drops you will take a bloodbath on these coins with so much of their value tied into their bullion. On the same page if gold continues to rise you could make a nice little profit. When I collected gold coins a common date Saint Gaudens traded for $300 now they go for $1800-2000 and that is just in a decades time. that is a nice little %600-700 increase in just ten years but even if Gold hits say $6000 then your only going to see a %300 increase, your on the higher end of the scale now and the gains are going to be smaller. For you to make the same amount you could just ten years ago a St Gaudens would need to trade for $12,000 and of that happens there will be no collectors and only bullion hoarders and I doubt that it will ever hit that mark eventually when there is no one to purchase something the price just can't continue to rise.
I think you will see smaller gains because the price of gold is getting to the point where it is pricing out too many people so the demand is lowering while the supply remains the same. I just don't see gold going above $5000 because there just isn't enough people to purchase it at that price. You have to have buyers for it to keep increasing. Silver is where the better investment is in all honesty. At $30 an ounce you have a much larger pool of potential buyers plus you have more uses for silver (silver is used in electronics as its a great conductor of electricity odds are that cell phone in your pocket has some silver in it). Ten years ago silver was $4 and has traded upwards of $40-50 that is a %1000-1200 increase almost double gold in the same timeframe. Plus a lot more people can buy it an hoard it keeping the demand there even if the price hits $100 an ounce.
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Pillar of the Community
United States
2335 Posts |
I've been saying the same thing about common date PM(gold & silver) coins for several years. The rise in PM prices over the last several years eliminated the numismatic premium. Common date circulated, & in many cases uncirculated, coins became bullion products. There's nothing wrong with buying coins at these prices but people need to realize that it's a bullion investment & not a numismatic investment.
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Bedrock of the Community
United States
11951 Posts |
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Except for the fact that there is now and will always be many more gold coins than collectors That is quite a statement. Can I ask Who do you think owns the majority of gold coins today? Collectors have far more then dealers. If there are more gold coins than collectors ... where are the extra coins? Also look at the number of modern bullion gold coins, proof bullion, that the mint sell each year. Who do you think is buying them? Maybe in your area dealer do not want to buy gold coins. In the good shops of my area, classic gold coins do not sit very long. Just in the past 18 months I have seen several times where customers sell or buy $20,000 to $500,000 in gold coins in one transaction. I know of several individual collectors that have $100,000 collections .. and a couple that have over a million, with mostly gold coins. I know one dealer here on the gulf coast that deals in many millions each year buying and selling mostly gold coins. I am sure he will disagree about gold coins being a bad investment. I will ask him next time I talk with him. At the coin shops that I help out at. When we get a nice gold coin in, we have several people we call that will come right down and buy it. One lady bought seven in the past 5 weeks. It sounds like some people in your area are not wanting to buy gold coins. I would suggest looking into the people that are making money off gold coins, and the collectors that are buying them, to help you come to a fair conclusion as to weather they are a good investment or not. |
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Bedrock of the Community
13014 Posts |
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I think you will see smaller gains because the price of gold is getting to the point where it is pricing out too many people so the demand is lowering while the supply remains the same. You hit the nail right on the head. I also dont see gold reaching those super high levels because every time it creeps up fewer people either can or will buy Quote:
Who do you think owns the majority of gold coins today? Right now its still spread out with collectors because we arent to far removed from affordable gold prices. The more important question would be who is buying the majority of gold coins today and for that I would be its bullion stackers. Like mentioned most collectors are priced out of the gold market now especially for the 1oz coins, and even more just simply dont want to spend that much on gold. Granted due to the traditional demographics of collectors a good amount of them can still afford to buy gold coins, but the average collector has been removed from the gold market for quite some time. The demand is being provided by a smaller and smaller percentage of collectors every time the price rises. Think of it this way theres lincoln pennies that sell for 100 dollars or more which is over a 10000 percent numismatic increase because of the demand. Yet theres gold coins with far far far lower mintages and they sell for melt because you dont see that demand with more affordable coins. You can count the people you mentioned on 1 hand yet they account for millions in gold sales. Gold is really the haves and have nots of coins. A very small percentage of people account of the overwhelming majority of gold sales |
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Pillar of the Community
United States
2335 Posts |
There is no question that people are buying gold coins & the vast majority of them are buying as an investment. However, the fact that coin stores are able to sell gold coins has absolutely no bearing on whether or not they are a good investment. If you believe that you need to do a little research on market history. There have been many points in time when large amounts of people were buying stocks/commidities/bonds/real estate/etc....that didn't keep prices of those things from crashing.
The point is that common date coins have changed from being a numismatic investment to being a pure bullion investment. If you believe the PM market will remain strong there isn't any problem. Anyone that believes gold coins will retain their current valuation if the price of gold drops dramatically is fooling themselves.
Edited by trdhrdr007
11/02/2012 6:54 pm
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Pillar of the Community
United States
2212 Posts |
Barry, that's exactly what cc9999 said: "I'm not shy about my opinion about common date classic gold...As a numismatic item- it's worthless." Basebal21 feels the same way.
Numismatics is defined as "the study or collection of currency and coins." Sure, it has an additional function as an investment vehicle. But first and foremost it embodies many subtle and not-so-subtle qualities that make us want to look at a coin: the art, the age, the condition, the mintage, and all the possible related stories those attributes can suggest.
Seems we have two definitions of "numismatic value": collector numismatic value and investor numismatic value. For investor value, yes, I see how the common date gold would be worthless. But give me good old collector numismatic value any time!
Edited by jpsned
11/02/2012 7:02 pm
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Pillar of the Community
United States
5862 Posts |
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But give me good old collector numismatic value any time! True. Again, though, is that an argument to start buying them in quantity, or just to own one or two? |
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Pillar of the Community
United States
2272 Posts |
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Seems we have two definitions of "numismatic value": collector numismatic value and investor numismatic value. For investor value, yes, I see how the common date gold would be worthless. But give me good old collector numismatic value any time! No one is disputing that old classic gold is of extreme numismatic interest. The problem is there are too few collectors to support much of a premium for most of the coins. The problem is that going forward this demand is likely to shrink even further. Nothing is given but the number of individuals wealthy enough to own extensive gold collections with gold at $10,000 is few. Time don't fly, it bounds and leaps.
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Pillar of the Community
United States
2212 Posts |
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But give me good old collector numismatic value any time!
True. Again, though, is that an argument to start buying them in quantity, or just to own one or two?
Depends on how much one can afford, I guess. I'd enjoy having one of several different types. But I would soon find it hard to justify more than that just because my budget wouldn't allow it. And I consider gold coins to be more curiosities than anything else.
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Pillar of the Community
United States
1660 Posts |
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common date common grade gold has a silver analog- common date common grade morgans. Do you know anyone selling $2 1/2 gold Indians at spot? Please let me know who they are. |
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Pillar of the Community
 United States
1302 Posts |
I went to a coin show over the weekend and offered an MS-63 $5 Gold Liberty in a PCGS holder for a PR-67+CAM 1950 dime. The dealer said he'd only do it if I threw in a $100. Think about that.
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Pillar of the Community
United States
2272 Posts |
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I went to a coin show over the weekend and offered an MS-63 $5 Gold Liberty in a PCGS holder for a PR-67+CAM 1950 dime. The dealer said he'd only do it if I threw in a $100. Think about that. Collector "value" is very ephemeral. A quarter century ago no 1950 dime was considered to be of much import at all much less worth $100. A nice $5 lib was considered a very collectible coin and commanded a significant premium to gold. The former was considered barely collectible my most and the latter a solid investment. Who's to say what things will be like in another quarter century but one thing's for sure; they willbe very much different. Most of the current collector base will be retired from the hobby and all the coins will belong to a new generation. I believe relative values of things will look very odd by today's standards. This effect will be exascerbated by much more widely available information about coins made possible by the computer and internet. Time don't fly, it bounds and leaps.
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Bedrock of the Community
13014 Posts |
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Most of the current collector base will be retired from the hobby and all the coins will belong to a new generation. Thats a very good point and one that to me supports the articles claim. The next generation (which I consider myself part of due to my age) is conditioned to view gold as bullion at these prices. The simple fact of knowing that if gold rises the numismatic premium goes away will more than likely prevent large premiums on the coin even if gold goes back to 300. I also agree about the internet. I wasnt around in the old days of collecting, but my guess would be the internet significantly altered the values and perceptions of some coins whether they were thought to be rare and arent or vice versa |
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Pillar of the Community
 United States
5191 Posts |
After ten years of strong price gains in bullion and numismatics, are people still of the opinion that gold in whatever form is a bad investment? I am asking because of the recent, dire geopolitical events that might collapse the current financial system (Bretton Woods II) and herald a new era of commodity-backed currencies (Bretton Woods III). https://www.nasdaq.com/articles/cre...efit-bitcoin |
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Pillar of the Community
United States
1279 Posts |
The us dollar is a bad investment
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Replies: 30 / Views: 5,296 |
First Page
Posted 11/02/2012 4:03 pm
