Gold, Is One Mintage As Good As Another, Or.

An ounce of gold actually is an ounce of gold and is worth the price of an ounce of gold.

What it is made into changes the price that people are willing to pay, but does not change the value of the gold content.

The price of any particular coin can be influenced by factors other than the gold content.

Design
Country of origin
Mintage
Date
Trust (that it is genuine)
Purity of coin (.999, .900, etc.)
Demand (driven by the above factors). This demand can vary based on the buyer's situation. Are they in the U.S., Canada, China, Europe? Taxes on various coins may also be a factor.

Can one predict demand? If you could, you could be mega rich.

For the price of gold to go down to US$50 or less, one of two things have to happen:

1) The supply of gold increases so drastically that the price declines (it is no longer as rare as it is today).
2) The value of the dollar increases so drastically that it only takes US$50 to buy an ounce of gold.

When I think of things "going south", I think more along the lines of the US dollar declining in value. When the value declines it takes more dollars to buy an ounce of gold (conversely, you can receive more dollars when selling an ounce of gold). Anticipated future currency devaluation is one reason people buy gold.

Specifically, what is your purpose or purposes for owning gold?

Diversification, primarily. I can't control how the funds in my pension are invested (primarily stocks), so I want a hedge against another stock market decline and/or downturn. I moved my 401 and 457k to capital preservation funds--I realize I'm missing out on the fun right now, but since I'm already retired I can't rebuild if we have another recession, so I'm happier playing it safe. I also have a decent amount of equity in my house, though I do have some years left on my mortgage. Anyway, I decided to designate part of my savings for coins and precious metals. The coin part is for fun, though I do try to make sure I'm picking coins that ought to hold their value. My grandpa's coin collection is mostly well circulated silver, so I don't see much point in getting ASE's. What I don't have is gold, so I thought I'd try to pick some up.

ETA, the idea seems particularly attractive with gold prices being where they are. No guarantee they won't go lower, but given historical values, in the long run it seems like a sound idea.

IMHO, the 1oz of gold size whether it be in bar or coin offers the best combination of price, liquidity, and flexibility. A 10oz bar, for example, does offer a better price but at the cost of liquidity and flexibility. 10oz is a lot of money and many dealers may not have enough funds at that moment to purchase or would purchase at a large discount. The large wholesalers will be able to purchase at a fair price but if you are the person who doesn't want to mail it, then this may not be an option. For you, it may just be too much money and you won't be able to sell in amounts less than 10oz. With less than 1oz products, flexibility is not a problem. Liquidity usually not too much of an issue but bid/ask spreads may be wider. For example, the published buy prices on APMEX on generic British sovereigns are are about 92.3% of their sell prices. The other popular 1oz products like AGE, CML, and bars have buy prices between 95-97% of sell prices. Provident metals it is a similar story. The same 3 have buy prices around 96-97% whereas fractional AGE have buy prices around 95% and lower. Premiums are usually higher as a percent of melt. Premiums as a percent of melt do tend to go down as bullion prices go up and vice versa. The one non 1oz product that I can think of at this moment that has comparable spreads is the Mexican 50 pesos. In the end, buy what you like and is best for your situation whether that be AGE, CML, pre-1933 U.S, old European, bars, rounds, etc.



I am not sure if it is the other way around in Canada but my guess is that people in the U.S. prefer something made by the U.S. government over something made by another government. The AGE and Buffalos are priced the same and if we compare coins of the same purity, the only differences between the Buffalos and CML are design and country of manufacture.

Im still resigned to the fact that I'll be paying a bit more premium for smaller rounds or coins. On my budget, if I want to still have a little money for, like life (and coins), it would take most of a year to save up enough to buy an ounce (let alone TEN)!

I considered rolling part of my 401k, but I think I'll leave it as is for now. Any buying of coins and PMs will come out of disposable income, such as it is.

I agree with Moxking overall. My only disagreement is that he is putting too much faith in the slab. Don't ever just believe the slab. There are forgeries of that as well, especially when it comes to gold. I just think you should buy from reputable dealers only who have been around for quite some time. That will be your way of making the safest investment.

Premiums on American Gold Eagles are near the highest because we've had it drilled into our heads to buy American made products, and everyone charges more for them right on down the line, starting with the Mint. They know a certain amount of people will pay whatever the price is, because its American made, simple as that.