In 2017 and 2018, I recall that you could purchase pre-33 gold coins in decent condition either below the spot price or slightly above it. Does anyone have insight into why the prices have experienced such a dramatic increase, resulting in premiums of 20% to 40%? Additionally, what could be considered a reasonable premium for pre-33 gold coins at the present moment? Thank you for reading.
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I’m uncertain about acquiring them below the spot price, but I used to regularly buy ungraded pre-33 common date gold coins at or near the spot price when paying in cash. I’m not sure what has caused the recent price surge, but it does seem excessive. I also remember my dealer offering me a great deal on an Indian half eagle, mentioning that no one was paying above spot for them at the time. This was in 2016. He even said that I could take the coin out of its bag and hammer on it, and it would still hold its value for us. This is an important consideration if you plan to sell in the short term, as you might only receive the spot price for pre-33 gold unless you find a private buyer.
Do you believe a 20% premium is high for circulated pre-33 gold coins?
What would you consider a reasonable premium for these coins?
It seems that larger denominations, such as $20 Liberty and Saint-Gaudens, are currently available with relatively low premiums, almost at a decade low. Smaller coins, on the other hand, tend to cost less but come with higher premiums. In my experience with pre-33 gold, the premiums for smaller denominations like $1 and $2.50 are exceptionally high, while $5 coins also command a significant premium. However, when selling them back, they tend to fetch close to their melt value. Additionally, there are concerns about the grades and condition of pre-33 US gold coins, particularly regarding cleaning and handling over the years. In contrast, foreign gold coins like French or Swiss 20 Francs and British Sovereigns typically have lower premiums (around 3-4% or less) and are widely recognized for their purity and weight.
Consider old foreign gold coins to help manage and maintain reasonable premiums.
If you’re limited in terms of purchase size, you might want to consider these foreign gold coins to keep premiums reasonable. Netherlands 10 guilders are another option with a relatively low premium, slightly more gold content than Swiss 20 Francs. However, if you prefer the $5 Liberty Head pre-33 gold coins, you may still find reasonable premiums, especially for cleaned examples.
Indian Liberty coins in $5 and $10 denominations, as well as the $20 Saint-Gaudens, can also be appealing choices. Unslabbed pre-33 gold coins are primarily suitable for stacking, and you can often find them at local shows with relatively low premiums (3-4% or less). However, slabbed coins by NGC or PCGS provide authenticity guarantees, which can be important for gold coins. To potentially enjoy some numismatic upside potential, focus on finding MS64 or higher graded coins with exceptional luster and the characteristic orange color. These coins may offer better long-term prospects, unless your primary goal is to invest in the metal itself.
Are you interested in collecting for numismatic value or for the bullion value?
For collectors, getting a Napoleon franc, whether graded or not, from a reputable online seller like APMEX, JM Bullion, or Provident can be a cool addition to your collection. And for bullion purposes, Europeans gold coins offer several great options, including the 20 Mark coins from the Kaiser Reich era, as well as Roosters, Helvetias, and Sovereigns. There are numerous varieties available, often with only a small premium, if you’re looking for variety in your collection.
Some of the major players occasionally have pre-1933 coins for sale on eBay. However, be cautious, as some of these deals may involve “cleaned” coins. If you prefer to buy graded coins, aim for PCGS-64 or higher to ensure you receive a well-preserved coin with authentication. If you’re looking strictly for gold content, buying raw coins on eBay can be risky, as some buyers have received coins in poor condition. PCGS-64 coins are a safer bet for obtaining a quality coin that hasn’t been significantly damaged and is authenticated.
Big premiums on 1/10oz on fractional eagles and buffalo.
Premiums on fractional gold are significantly higher compared to their one-ounce counterparts. A quick comparison between 1-ounce American Gold Eagles on platforms like APMEX and their 1/10 ounce counterparts reveals a substantial difference. This trend holds across various government mints, where premiums for 1/10 and 1/4 coins often add up to $150 or more per ounce, while 1-ounce coins typically have premiums ranging from $40 to $70, depending on the specific coin.
In the United States, both eagles and buffaloes carry premiums, even at the wholesale level where they sell above spot prices. The wholesale price for a 1/10th eagle, for instance, tends to be more than 5% above spot. Notably, dealer buyback prices for eagles or buffaloes consistently exceed those for other gold coins. The key lies in acquiring these coins at the most economical prices, and several gold dealers like Liberty Coin, Silver Gold Bull, Bullion Exchanges, Monument Metals, and SD Bullion are noted for their competitiveness in the gold market.
When it comes to selling, it’s worth noting that different vendors may offer varying rates for fractional coins. Additionally, considering smaller foreign historical gold coins, such as French or Swiss 20 Francs (containing 0.1867 ozt of gold) and British Sovereigns (containing 0.2354 ozt), can be a strategic move. These foreign coins often come with lower premiums, ranging from 3-4% over spot, compared to the 12-15% premiums for US, Canadian, or Australian fractionals. This explains the preference for coins like Ducats, Sovereigns, and other European options, where recent acquisitions, such as a 10 Guilder for 2.8% over spot, showcase their appeal.
When considering the manufacturing costs, one can observe that fractional coins, like the tenth-ounce ones, tend to incur roughly ten times more expenses than their one-ounce counterparts. This is attributed to the intricacies of stamping and processing ten items per ounce instead of just one. Moreover, the allure of smaller and cheaper coins attracts a larger pool of potential buyers, contributing to an increased premium. The appeal of these tiny golden coins also plays a role in their popularity. The significance of the larger buyer pool becomes evident, especially with coins like 20 Francs, ducats, and sovs, which can often be acquired near spot prices despite their fractional nature.
Interestingly, even though one can purchase 1-ounce bars and some 1-ounce coins at or near spot, fractional American Gold Eagles (AGEs) consistently command a premium due to their broad appeal. The pool of buyers appears to be a crucial factor, surpassing the impact of coin size. For instance, a 1-ounce AGE may have a higher premium than a Napoleon III 20 Franc. Despite the higher premiums associated with fractional gold, there’s a prevalent trend of people adding 1/4s and 1/2 gold eagles to their stacks.
With the upcoming release of the 2024 coins, the excitement continues, and some recommend considering fractional gold as a valuable addition to one’s stack. Although premiums are generally higher, finding the right price is key. It’s advisable to explore alternative vendors, steering clear of sources like Apmex and JM Bullion. Instead, Hero Bullion and Monument Metals are suggested for fractional purchases. For example, comparing prices for a 1/10 American Eagle, Apmex lists it at around $284.51, while Hero Bullion has it at approximately $232.79, albeit currently.
selling to a trustworthy coin shop can be an ideal combination for both value and convenience.
In the U.S., a one-ounce American Gold Eagle (AGE) tends to hold the best premium and is relatively easier to sell. The demand hierarchy typically favors AGEs and buffalos, followed by Maple Leafs, Krugerrands, Philharmonics, and others. Bars may face resistance due to concerns about counterfeits, leading to lower buyback prices. For savvy buyers, taking advantage of eBay bucks and waiting for deals can be a strategic approach.
Purchasing coins like AGEs, Philharmonics, and Maple Leafs with a slight premium and earning eBay bucks for future use can offer added value. A diverse collection of fractional and one-ounce gold coins, including AGEs, Buffalos, Brittanias, Maples, Krugerrands, Pandas, Sovereigns, and 20 Francs, caters to various preferences. For new collectors, AGEs are often recommended for their ease of valuation and resale, despite carrying a slightly higher premium. Graded coins may be more challenging to resell at the premium one paid to acquire them. When making purchases, keeping an eye on eBay for special deals from companies like Pinehurst Coin Exchange, APMEX, and Modern Coin Mart can yield great discounts. While fractionals may have a premium over spot when buying, selling them quickly may result in receiving only the spot price. Despite owning fractionals for future bartering, one-ounce coins generally provide the most gold value for the dollar.
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