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Eight bullion bargains reviewed

Premiums are down for bullion coins.


Here are eight bullion items to look at right now.

In helping to establish retail prices at the company where I work, we check the price formulas used by several national competitors. It seems like about half of the major bullion retailers in this country post price indications online. The other dealers direct interested parties to contact them by telephone to obtain fresh prices.

On June 5 I checked price formulas from nine national dealers who quote prices online. For 90 percent silver coins, I compared prices for $1,000 face value bags. For gold issues, I reviewed selling prices for transactions of 10 pieces.

In reviewing the data below, consider it a guide as to what a reasonable retail premium would be. For most of these dealers, smaller quantity purchases cost somewhat more per unit and larger transactions can often save a slight amount. For most of these dealers, purchases of this size were quoted postpaid. But, keep in mind that some dealers will add a postage charge, especially for smaller orders. Further, these premiums are for payments made by check or bank wire. Of the companies that accepted credit card payments, all charged higher prices for accepting such payments.

Some observations:

Some might expect that a cheap seller of one product would likely be competitive across the board. Not necessarily so. For instance, one dealer quoted the lowest premiums on three of the products but also the highest premiums on two products. There are some dealers who add a commission on top of the merchandise price, but none of the dealers in this survey do so.

I have observed that the relative competitiveness of any dealer can shift over time. So, if you find a dealer with the best price on a specific item this time, that may not be true the next time you want to buy. As dealers see their incoming and outgoing inventories shift, they can raise or lower premiums.

It is possible that dealers who require you to call them to obtain prices may be equally competitive on price. At least you can use this list for comparison purposes.

These premiums were all figured in relation to the quoted ask spot prices by each dealer. Between dealers, the ask silver spot price ranged about 10 cents while the ask gold spot price ranged about $2.50. Therefore, it is possible that the dealer who quoted the lowest premium may not necessarily have the lowest product price if they quote a higher spot price.

As you can see, the premiums could have a wide range, meaning that it can pay to shop around.

If a local dealer can supply you at reasonable premiums, even if not the very lowest, it might be worth establishing a relationship by patronizing him or her for at least some purchases. Every dealer charged a higher price for those seeking a 2017 date or some other particular date.

Here is the range of results:

1. For silver, I only checked on U.S. 90 percent silver coins, which can be one of the lower premium forms available right now. Dealers quoted premiums from 4.0 percent to 8.4 percent.

For gold:

2. One-ounce Gold American Eagle: one dealer at 3.1 percent, the others ranged from 3.6 percent to 4.8 percent.

3. One-ounce Canada Gold Maple Leaf: 1.95 percent to 3.35 percent.

4. One-ounce South Africa Krugerrand: 2.35 percent to 2.75 percent.

5. One-ounce Gold American Arts Medallions (only two dealers offered): one at 1.2 percent and the other at 2.0 percent

Odd sizes:

6. Austria 100 coronas (only three of the nine dealers offered these): 1.35 percent to 1.6 percent

7. British sovereign: one dealer did not offer; one dealer at 3.35 percent, the other seven ranged from 5.3 percent to 6.7 percent

8. Mexico 50 pesos (only six dealers offered): 1.15 percent to 1.75 percent

As you can see in this list, gold issues out of production such as the Austria 100 coronas, American Arts medallions, and the Mexico 50 pesos have significantly lower premiums that coins in current production. Of the nine dealers checked, only two offered all three of these products, one offered two choices, three offered only the Mexico 50 pesos, and three of them did not offer any of these three options. In the long term, I expect the higher premiums on current production issues will all fall to the lower levels of items no longer being struck.

This article was originally printed in Numismatic News. >> Subscribe today.

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