Posted: 4/3/2008 10:05:43 PM EDT
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You go buy a minted gold coin for $100-200 over what the base gold value is, but then when you sell they only pay the base value, nothing added for the coin? Is this what is to be expected when selling gold? The current base market value? In my head you would get more for the fact that it was a minted official coin? Or is that just on the 100 year old ones? Not 10 or so years old? Thanks. CC are BAD! |
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That would depend on if you could find a buyer. The 100 year old coins are rarer, so they command more money (all other things being equal). That $100 extra you pay is called "profit" for the coin maker/distributor. Obviously they couldn't sell it for base price, otherwise they wouldn't be able to eat!  If you want your profit, then wait until gold gets another $200 increase, then sell yours.That's why you should "buy low, sell high." 
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If all you want is for the coin's value to track the underlying gold, buy recently minted coins or even bars....shop around and you should be able to get them at $20 over spot (the bars). The older coins may have collector value but are less liquid when trying to get the $$ out of them. If you must have a coin, ~$50 over spot /oz. would be reasonable. |
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I've heard that coins are valued over ingots because it's easier to remove material from an ingot than from a coin. Don't know whether that's true, or how that affects 'rounds' the things that look like coins but aren't currency. Wish I had a big stack of gold coins. |
That's partially true though you can get bars that are sealed up in a package of sorts....those generally are accepted the same as a coin. BTW, in the case of US minted coins, they are currency!! Recent case law ruled that they are legal currency of their stated face value!!! A neat little scam (legal) is to get paid in those coins and only have to claim the face value ($50 for 1 oz. Gold Eagle or Buffalo) for income tax purposes. 
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If you're buying gold currency ($20 gold pieces for example) you are paying for A) the value of the gold in the coin. It is not 100% pure gold, B) the value of the coin based upon its condition and rarity. They ain't making no more of the coins, so the rarity factor is locked in. Maybe even enhanced as the gold value goes up. The lesser quality coins get turned in and melted, since there is not so much "condition" value. Fewer coins equals a higher rarity component to the price. The "condition" or "grade" of the coin can be subjective if has not been certified by one of the 3(?) accepted grading services. If it has been, it will be in a sealed holder with all that info attached. Expect to get hosed if you buy a gold coin who's value is in part determined by it's grade. Stay away from this part of the market unless you know a lot about grading and collectible demand. If you're playing the gold market for price only, try the exchange traded funds that deal in gold. If you gotta have gold in your hands, go with one of the bullion coins (Krugerrand, panda, maple leaf, etc). Their prices will vary a bit since not all of them are the same gold purity, nor the same size. There are some bullion coins produced in less than one ounce increments, but they usually carry a premium over what you would pay for the same weight in a single coin. |
+1 Taking delivery of ingots is costly. First, the sale is generally commissionable (or otherwise over spot) and then when you sell, the buyer will generally expect you to pay for it to be assayed. Coins such as those listed are much easier to trade. |