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Here is another rather long article on gold coins.
Regards
Here is another rather long article on gold coins.
AMERICAN EAGLE
by James DiGeorgia
I love those gold bars you see in the movies. Stacks of
100-ounce bars are commonly the target of thieves and
villains, like Goldfinger or some other greedy scoundrel.
When not being used by Hollywood or lifted by egomaniac
mobsters, 100-ounce bars are primarily traded on the major
world commodity exchanges and used by the world's central
banks when trading gold.
Private investors buying less than 1,000 ounces of gold
should steer clear of these 100-ounce gold bars. And I
strongly recommend NEVER buying smaller gold bars, like 1
ounce or less weighted gold bars produced by private mints
or refiners.
First of all, small investors who buy one or two 100-ounce
bars lose the ability to sell their gold in intelligent
increments. In addition, only exchanges regularly trade
100-ounce bars. Most gold dealers, coin dealers and gold
brokers don't trade these bars and will discount a bar that
large, by 5-7%.
Second, my personal experience with smaller gold bars has
been consistently bad. They sell for a 3%-10% premium over
the spot price, which works out to a spread of as much as
20%, which is way too big.
The marketplace is dominated by bullion coins. The vast
majority of rare coin and bullion dealers do 99% of their
trading in coin form.
It's important here to make a distinction between bullion
coins and numismatic coins. A bullion coin's value is
derived solely from the content of its gold and is normally
sold at a small premium above the market price for gold. A
numismatic coin derives its value from its rarity,
historical and aesthetic qualities and can sell for up to a
million dollars.
Now that I've steered you away from gold bullion bars, let
me also caution you against private mint gold coins. Many
refiners and private mints around the world produce 1-ounce
to 1/10th-ounce gold coins and offer them for sale as
"bullion" alternatives. They tout either the fact that they
cost less than more commonly traded gold bullion coins
produced by the governments of the United States, Canada,
South Africa and Australia or that they are sold based on
the uniqueness of their design.
Private mints coin their gold bullion with images of
everything from sporting events to Elvis Presley.
You should never buy privately minted gold bullion coins.
They sell originally for large premiums above the price of
gold and later sell at a discount to their intrinsic gold
value because they are NOT widely bought and sold by
dealers, and therefore dealers will discount the coins when
(or if) they buy them.
Instead, you should stick with the five most commonly
traded gold bullion coins in the world!
Back in the 1970s, the most famous gold bullion unit was
the Krugerrand from South Africa. The coins contain 1 ounce
of gold and just enough copper to allow the coin to be
struck. So the net weight of the coin is actually more than
an ounce. They dominated trading in the last gold bull
market and are still traded today. The South African
government produces small-weighted coins in addition to the
1-ounce standard.
The popularity of the South African Krugerrand prompted the
Canadian government to mint the Canadian maple leaf in
1979. The coin was an instant success, thanks to a clever
advertising angle that touted the Canadian Maple Leaf as
the first solid 24-karat gold bullion coin. While that is
true, the fact remains that Canadian and South African
coins both contain a full 1 troy ounce of gold. Few people
realize that the Canadian Maple Leaf actually has a face
value of $50 Canadian dollars, far less, of course, than
the value of the gold bullion.
The "Roo," as it's commonly called, is minted by the
Australian Perth Mint and is actually the second bullion
coin produced by Australia. The first was called the
"Nugget Coin," and the Kangaroo replaced it.
The most popular European bullion coin is the Vienna
Philharmonic. It is struck in pure (99..9%) gold by the
Austrian Mint, which has been minting gold coins for more
than 800 years. The obverse depicts the great organ in the
Golden Hall in Vienna's concert hall (Musikverein), home of
the Vienna Philharmonic. A bouquet of musical instruments
represents the world famous orchestra on the reverse of the
coin.
One of the most popular gold bullion coins in the world is
the China Panda, which was first introduced in 1982. The
1/20-ounce coin was introduced in 1983. Throughout the
years, the China Mint has kept the same Panda design, but
has frequently changed the position of the panda on its
coins.
But the American Gold Eagle is now by far the most popular
gold bullion coin in the world. Authorized by Congress in
1985 and first minted in 1986, American Eagles are minted
in 22-karat, which was the standard established for
circulating U.S. gold, dating back to the gold that was
first struck in 1796. In fact, the 22-karat standard has
been the worldwide standard for circulating gold coinage
for more than 350 years!
American Gold Eagles have a substantial patriotic edge, as
they can only be coined from newly mined sources in the
United States. The balance of the coin's composition
consists of silver and copper, which is added to increase
the coin's durability. Gold is a very soft metal.
The obverse is based on world-renowned American sculptor
Augustus Saint-Gauden's design for the prized 1907 $20 gold
coin. The reverse pictures a family of eagles, symbolizing
family tradition and unity.
Which gold bullion coin do I recommend? Hands down, the
best gold bullion coin is the American Gold Eagle! It's the
most liquid coin in the world. The buy/sell spread is
rarely more than 7% on small amounts and as little as 5% on
larger quantities.
Don't buy bullion coins that have any rim nicks, scratches,
abrasions, chips, or dents or those that appear to be
discolored in any way. NEVER! Any knowledgeable buyer will
discount coins that have even the slightest damage.
Steer clear of any coins that have carbon or copper spots.
Some gold bullion coins, even those that are in 100%
absolutely perfect condition, will have tiny spots visible
to the naked eye without magnification. These are natural
and are caused by the inclusion of copper into the gold to
increase the durability of the planchets (the metal disks)
on which the coins are struck. Despite the fact that these
spots are natural to gold coins, they are undesirable, and
dealers will buy and sell them at a slight discount. Make
sure when buying gold bullion coins that you insist on "no
spots." Keep in mind a spot is only a problem if you can
see it with the naked eye. If you have to use a magnifying
glass to see a spot(s), it is not a problem.
Don't buy "rare date" bullion coins. A bullion coin is a
bullion coin. Don't be fooled. The least expensive way to
purchase the 1-ounce coin is to specify "common date."
Common date means the bullion dealer can send you any date
bullion coins of the type you desire in gem condition. If
you order a specific date, for example 1996, it will cost
more then the common date.
Some telemarketing firms are now selling some dates of the
American Eagle a-ounce gold coins in mint state condition
for premiums of 10%, 20%, even 30%! Yuck - what a horrible
deal. It's a complete rip-off. The coins are and will
always be bullion coins. They're NOT rare and don't deserve
a premium.
NEVER buy or sell gold bullion strictly on the basis of the
best price. Saving a few dollars with buying or selling
prices versus dealing with a reputable company or person is
silly. Over the years, I've seen investors decide to do
business with one dealer or another based 100% on price.
The firm could offer the best price because they had no
intention of delivering the gold! When the gold market gets
red hot, the scam artists breed like rats. Here are two
recommendations I always make:
Know your dealer. Do some background checking. How long has
the dealer been in business? Check with the Better Business
Bureau. Are you dealing with a "nameless" clerk or a
principal in the firm on whom you can check? You'd be
amazed how many people are out there waiting to steal your
money.
Always take immediate delivery of your gold coins. NEVER
store your gold coins in a dealer's vault. I've seen people
lose every penny trusting a dealer. Take the time and get a
safety deposit box at your bank and take charge of the
storage. When buying bullion, it's important to get your
gold as quickly as possible. Checks need several days to
clear, money orders need less time and bank wires are
immediate; you can always insist on next-day shipment when
you send a bank wire.
Now I'm going to give it to you straight: When the gold
market gets red hot, and it will, EVERY gold dealer and
precious metals brokerage firm will pay spot (most current
price) for your gold coins and sell at 10% over spot. The
bid/ask spread at which gold coins are traded will widen.
It happened in 1979-1980, and it will happen again. Don't
sweat it. Take your profits, and don't let the wider
premiums bother you.
The best analogies are...
Gasoline: When we experience a "shortage," gas stations
gouge. It happens every time. A frenzied marketplace
creates fear, which widens the spread, and prices rise.
Buyers get the short end of the stick, while dealers get
rich.
Stocks: Forget all the nonsense about reform on Wall
Street. The fact is when a stock becomes red hot, the
spread between the buy and sell widens. The specialists who
run the market make much more money. They argue that the
spread widens because the transaction risk increases. This
isn't always true, but it's true enough that they can get
away with the wider buy/sell spread.
Here's the bottom line: Get into your gold investments now,
before the market gets red hot. Diversify your investment
portfolio, because it's the smart thing to do. Get yourself
into a position to ride gold from $350 to $1,250 or $2,000
an ounce. Buy the best, most liquid gold investments and
cash in on the bull market ahead.
Regards,
James DiGeorgia
for The Daily Reckoning
Editor's Note: Experts as knowledgeable about gold as James
DiGeorgia are as rare as a MS-69 $2.50 Liberty!
James was trading in gold coins before his 15th birthday,
and by 16, he already had his own office in Danbury, Conn.
That was back in 1976, and the gold market was just about
to mushroom. By the time the precious metal markets had
crashed, James had made well over $1 million.
He's never looked back. Since then, James has traveled the
world attending auctions, estate sales and conventions and
establishing a network of dealers and traders in virtually
every major city on earth.
Now James DiGeorgia is one of the most familiar rare coin
dealers in the world.
For more information on James DiGeorgia, gold coins and the
bull market in gold, keep reading...
$1,000 Gold and the Many Ways to Profit From It
http://www.goldandenergyadvisor.com/...25/?x=weba0093
by James DiGeorgia
I love those gold bars you see in the movies. Stacks of
100-ounce bars are commonly the target of thieves and
villains, like Goldfinger or some other greedy scoundrel.
When not being used by Hollywood or lifted by egomaniac
mobsters, 100-ounce bars are primarily traded on the major
world commodity exchanges and used by the world's central
banks when trading gold.
Private investors buying less than 1,000 ounces of gold
should steer clear of these 100-ounce gold bars. And I
strongly recommend NEVER buying smaller gold bars, like 1
ounce or less weighted gold bars produced by private mints
or refiners.
First of all, small investors who buy one or two 100-ounce
bars lose the ability to sell their gold in intelligent
increments. In addition, only exchanges regularly trade
100-ounce bars. Most gold dealers, coin dealers and gold
brokers don't trade these bars and will discount a bar that
large, by 5-7%.
Second, my personal experience with smaller gold bars has
been consistently bad. They sell for a 3%-10% premium over
the spot price, which works out to a spread of as much as
20%, which is way too big.
The marketplace is dominated by bullion coins. The vast
majority of rare coin and bullion dealers do 99% of their
trading in coin form.
It's important here to make a distinction between bullion
coins and numismatic coins. A bullion coin's value is
derived solely from the content of its gold and is normally
sold at a small premium above the market price for gold. A
numismatic coin derives its value from its rarity,
historical and aesthetic qualities and can sell for up to a
million dollars.
Now that I've steered you away from gold bullion bars, let
me also caution you against private mint gold coins. Many
refiners and private mints around the world produce 1-ounce
to 1/10th-ounce gold coins and offer them for sale as
"bullion" alternatives. They tout either the fact that they
cost less than more commonly traded gold bullion coins
produced by the governments of the United States, Canada,
South Africa and Australia or that they are sold based on
the uniqueness of their design.
Private mints coin their gold bullion with images of
everything from sporting events to Elvis Presley.
You should never buy privately minted gold bullion coins.
They sell originally for large premiums above the price of
gold and later sell at a discount to their intrinsic gold
value because they are NOT widely bought and sold by
dealers, and therefore dealers will discount the coins when
(or if) they buy them.
Instead, you should stick with the five most commonly
traded gold bullion coins in the world!
Back in the 1970s, the most famous gold bullion unit was
the Krugerrand from South Africa. The coins contain 1 ounce
of gold and just enough copper to allow the coin to be
struck. So the net weight of the coin is actually more than
an ounce. They dominated trading in the last gold bull
market and are still traded today. The South African
government produces small-weighted coins in addition to the
1-ounce standard.
The popularity of the South African Krugerrand prompted the
Canadian government to mint the Canadian maple leaf in
1979. The coin was an instant success, thanks to a clever
advertising angle that touted the Canadian Maple Leaf as
the first solid 24-karat gold bullion coin. While that is
true, the fact remains that Canadian and South African
coins both contain a full 1 troy ounce of gold. Few people
realize that the Canadian Maple Leaf actually has a face
value of $50 Canadian dollars, far less, of course, than
the value of the gold bullion.
The "Roo," as it's commonly called, is minted by the
Australian Perth Mint and is actually the second bullion
coin produced by Australia. The first was called the
"Nugget Coin," and the Kangaroo replaced it.
The most popular European bullion coin is the Vienna
Philharmonic. It is struck in pure (99..9%) gold by the
Austrian Mint, which has been minting gold coins for more
than 800 years. The obverse depicts the great organ in the
Golden Hall in Vienna's concert hall (Musikverein), home of
the Vienna Philharmonic. A bouquet of musical instruments
represents the world famous orchestra on the reverse of the
coin.
One of the most popular gold bullion coins in the world is
the China Panda, which was first introduced in 1982. The
1/20-ounce coin was introduced in 1983. Throughout the
years, the China Mint has kept the same Panda design, but
has frequently changed the position of the panda on its
coins.
But the American Gold Eagle is now by far the most popular
gold bullion coin in the world. Authorized by Congress in
1985 and first minted in 1986, American Eagles are minted
in 22-karat, which was the standard established for
circulating U.S. gold, dating back to the gold that was
first struck in 1796. In fact, the 22-karat standard has
been the worldwide standard for circulating gold coinage
for more than 350 years!
American Gold Eagles have a substantial patriotic edge, as
they can only be coined from newly mined sources in the
United States. The balance of the coin's composition
consists of silver and copper, which is added to increase
the coin's durability. Gold is a very soft metal.
The obverse is based on world-renowned American sculptor
Augustus Saint-Gauden's design for the prized 1907 $20 gold
coin. The reverse pictures a family of eagles, symbolizing
family tradition and unity.
Which gold bullion coin do I recommend? Hands down, the
best gold bullion coin is the American Gold Eagle! It's the
most liquid coin in the world. The buy/sell spread is
rarely more than 7% on small amounts and as little as 5% on
larger quantities.
Don't buy bullion coins that have any rim nicks, scratches,
abrasions, chips, or dents or those that appear to be
discolored in any way. NEVER! Any knowledgeable buyer will
discount coins that have even the slightest damage.
Steer clear of any coins that have carbon or copper spots.
Some gold bullion coins, even those that are in 100%
absolutely perfect condition, will have tiny spots visible
to the naked eye without magnification. These are natural
and are caused by the inclusion of copper into the gold to
increase the durability of the planchets (the metal disks)
on which the coins are struck. Despite the fact that these
spots are natural to gold coins, they are undesirable, and
dealers will buy and sell them at a slight discount. Make
sure when buying gold bullion coins that you insist on "no
spots." Keep in mind a spot is only a problem if you can
see it with the naked eye. If you have to use a magnifying
glass to see a spot(s), it is not a problem.
Don't buy "rare date" bullion coins. A bullion coin is a
bullion coin. Don't be fooled. The least expensive way to
purchase the 1-ounce coin is to specify "common date."
Common date means the bullion dealer can send you any date
bullion coins of the type you desire in gem condition. If
you order a specific date, for example 1996, it will cost
more then the common date.
Some telemarketing firms are now selling some dates of the
American Eagle a-ounce gold coins in mint state condition
for premiums of 10%, 20%, even 30%! Yuck - what a horrible
deal. It's a complete rip-off. The coins are and will
always be bullion coins. They're NOT rare and don't deserve
a premium.
NEVER buy or sell gold bullion strictly on the basis of the
best price. Saving a few dollars with buying or selling
prices versus dealing with a reputable company or person is
silly. Over the years, I've seen investors decide to do
business with one dealer or another based 100% on price.
The firm could offer the best price because they had no
intention of delivering the gold! When the gold market gets
red hot, the scam artists breed like rats. Here are two
recommendations I always make:
Know your dealer. Do some background checking. How long has
the dealer been in business? Check with the Better Business
Bureau. Are you dealing with a "nameless" clerk or a
principal in the firm on whom you can check? You'd be
amazed how many people are out there waiting to steal your
money.
Always take immediate delivery of your gold coins. NEVER
store your gold coins in a dealer's vault. I've seen people
lose every penny trusting a dealer. Take the time and get a
safety deposit box at your bank and take charge of the
storage. When buying bullion, it's important to get your
gold as quickly as possible. Checks need several days to
clear, money orders need less time and bank wires are
immediate; you can always insist on next-day shipment when
you send a bank wire.
Now I'm going to give it to you straight: When the gold
market gets red hot, and it will, EVERY gold dealer and
precious metals brokerage firm will pay spot (most current
price) for your gold coins and sell at 10% over spot. The
bid/ask spread at which gold coins are traded will widen.
It happened in 1979-1980, and it will happen again. Don't
sweat it. Take your profits, and don't let the wider
premiums bother you.
The best analogies are...
Gasoline: When we experience a "shortage," gas stations
gouge. It happens every time. A frenzied marketplace
creates fear, which widens the spread, and prices rise.
Buyers get the short end of the stick, while dealers get
rich.
Stocks: Forget all the nonsense about reform on Wall
Street. The fact is when a stock becomes red hot, the
spread between the buy and sell widens. The specialists who
run the market make much more money. They argue that the
spread widens because the transaction risk increases. This
isn't always true, but it's true enough that they can get
away with the wider buy/sell spread.
Here's the bottom line: Get into your gold investments now,
before the market gets red hot. Diversify your investment
portfolio, because it's the smart thing to do. Get yourself
into a position to ride gold from $350 to $1,250 or $2,000
an ounce. Buy the best, most liquid gold investments and
cash in on the bull market ahead.
Regards,
James DiGeorgia
for The Daily Reckoning
Editor's Note: Experts as knowledgeable about gold as James
DiGeorgia are as rare as a MS-69 $2.50 Liberty!
James was trading in gold coins before his 15th birthday,
and by 16, he already had his own office in Danbury, Conn.
That was back in 1976, and the gold market was just about
to mushroom. By the time the precious metal markets had
crashed, James had made well over $1 million.
He's never looked back. Since then, James has traveled the
world attending auctions, estate sales and conventions and
establishing a network of dealers and traders in virtually
every major city on earth.
Now James DiGeorgia is one of the most familiar rare coin
dealers in the world.
For more information on James DiGeorgia, gold coins and the
bull market in gold, keep reading...
$1,000 Gold and the Many Ways to Profit From It
http://www.goldandenergyadvisor.com/...25/?x=weba0093