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Save money where you can

When I joined the staff of Numismatic News in 1978, the coin business was on the verge of experiencing a great boom that was dubbed “The Party” by its participants.

The few world mints that were active at the time also benefited by issuing new gold collector coins that sold for twice gold bullion value to 2.5 times gold bullion value.

Buyers of the gold collector coins were still rather giddy about being able to buy new gold issues because it had only become legal to do so on the final day of 1974.

Buying new gold coins was as much an exercise of a new freedom as it was a numismatic activity.

Because gold was rising, these new issues often rose to prices above their issue prices, feeding a sense that collectors could do no wrong simply buying up everything with a yellowish glitter.

That kind of market ends. The Party was finished in 1980.

That kind of gold market ended in the present cycle at some point after the August 2011 closing price peak at nearly $1,900 a troy ounce. Today the gold price is $1,256.50, an ounce according to the Kitco website.

The name of the game today for investors and other serious gold buyers is to not buy anything that glitters, but find the gold coins that have the lowest markup from melt value and buy those to maximize the number of ounces they receive for the dollars they spend to buy them.

This isn’t glamorous. It isn’t exciting.

But unless as a gold buyer you enjoy handing extra money to sellers that might otherwise stay in your pocket, it is something you should consider doing.

If older dates are cheaper than the current year new issue coins, why not buy them instead?

If Krugerrands are cheaper than American Eagles as bullion coin buys, why not lean in their direction?

You get the idea.

Someday, the gold coin market will become exciting again. When that will be is not something we can forecast accurately.

A sound buying strategy now will both reduce costs and position the buyer to gain maximum benefit when the market once again returns to party conditions.

Buzz blogger Dave Harper is winner of the 2013 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper “Numismatic News.”

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