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Gold coins the best buy right now?

The price of gold hit $1,265 Sept. 3, the lowest since mid-June when it dropped from a relatively steady $1,300 to $1,243 over a month’s time.

Are buyers taking notice?

Not according to Gary Rosencrans, owner of Gary’s Coins, Wisconsin Rapids, Wis., who said that sales of precious metals have dropped off.

“The public acts the opposite way when it comes to metals,” he said.

They buy when it’s high, thinking it’ll go higher, he said.

“Then they sell when it’s low, thinking it’ll go lower,” he said.

As to what was the best buy right now, Rosencrans said that the margin was closest to spot on pre-1933 U.S. gold coins.

“People who want to buy gold just to own gold buy what is closest to their budget,” he said.

They budget a certain amount and usually invest it in smaller gold coins, he said.

“We have people that buy as many pieces as they can, like $5 or $10 U.S. gold coins and maybe a tenth-ounce bullion coin,” Rosencrans said.

Michael Haynes, CEO of APMEX, Oklahoma City, Okla., said that he too saw gold as a good buy right now.

“Popular coins to buy have never really changed, but metals are on sale. Gold is especially on sale right now,” he said.

Premiums on gold coins are a lot higher than they are on gold bars, he said.

“A lot of people like gold coins because of authenticity issues with the bars,” Haynes said.

“Gold coins issued by a government have a degree of protection backing them.”

As far as world gold and silver bullion coins were concerned, Haynes said that Austrian Philharmonics were really popular in Europe right now.

“American Eagles and Maple Leafs continue to be the biggest sellers in the U.S.,” he said.

Premiums haven’t changed on the silver American Eagle, Haynes said.

Julian Jarvis, owner of Julian Jarvis Rare Coins, Greencastle, Ind., said his sales of silver American Eagles were doing well.

“Some collectors at a monthly coin club meeting will buy some silver Eagles, typically one to two a month,” he said.

A lot of people are putting together a set of silver American Eagles, he said.

“Silver bullion rounds like the American Eagles are especially hot right now, more so than 90 percent silver coins,” Jarvis said.

Haynes said sales and premiums on 90 percent coin were really up and down because it had to be purchased on the secondary market.

“It’s not being produced anymore,” he said.

Silver bullion in .999 fine bars and coins, however, are being minted everyday, he said.

“We’re seeing the usual mix of 90 percent coins sell though,” Haynes said.

APMEX was selling bags and rolls of 90 percent silver dimes, quarters and halves at a 14.5 to 15 times face value depending on quantity purchased at a spot price of $19.20 an ounce on Sept. 4.

Rosencrans said that people are better off with 90 percent silver coins because  there’s a larger market for them.

“We’ve got people who like dimes because they’re easily divisible. They think that, should something occur, they could trade for a loaf of bread or something,” he said.

Hoarders like the half dollars because they can store the most amount of silver in the least amount of space, he said.

Jarvis said that premiums for 90 percent silver coins were low. Now that there’s no economic downturn, Jarvis said he’s paid just a bit over melt.

The price downturn has put a cramp in buyers right now. People selling precious metals, however, has increased, he said.

“I was buying $200-$300 worth of 90 percent coin a week and now I’m buying $1,000 worth,” he said.

A lot of what is being sold today is from estates or those hard up for money, meaning odds and ends are coming in, he said.

With a large supply of precious metals coming in, Jarvis said that prices were being driven down.

“These are the lowest premiums that I’ve seen in months,” he said.

All it takes is just a little physical demand and an economic downturn to bring up the markets though, he said.

“Will a downturn happen soon? It’s going to happen. It might be six months to a year from now, but it’ll happen,” Jarvis said.

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One Response to Gold coins the best buy right now?

  1. modrare says:

    Historically, the coin business slows considerably from mid-May to mid-August…with many dealers taking time off and few trade shows.
    The last few years bullion has stayed relatively strong during this annual slowdown. However 2014 seems to be different, as others have remarked, with estates and/or inheritances accounting for a large number of sellers.
    There have been buyers, though not as many as in recent years. Most are dyed-in-the-wool believers in hard assets or those looking ahead to the most likely consequences of QE, ZIRP, and ever-expanding and increasingly costly government .

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