Knowing the better buys on the precious metals market and where to find them will help collectors avoid costly mistakes.
Michael Fuljenz, owner of Universal Coin and Bullion, Beaumont, Texas, said while buyers won’t get a deal on gold bullion, owning it will pay off well in the future.
“I think the demand is great and the supply is low,” he said. “China, India and Russia are buying up lots of gold. Gold mining is down. I think that it’s a great time to get in. In a five-year span, I’m in for gold.”
The strength of the U.S. dollar has kept the metals down, he said.
“It’s been trending around the high $1,100s to mid $1,200s for the past year or so,” he said. “The strength of the dollar is reflected in the market.”
With gold looking good in the long-term, buyers are going after American Eagle gold bullion coins.
“About 75 percent of the gold we sell is in those coins,” Fuljenz said. “The premiums get higher the smaller the coin, so I’d recommend buying the ounce and half-ounce gold Eagles over the quarter- and tenth-ounce ones.”
Julian Jarvis, owner of Julian Jarvis Rare Coins, Greencastle, Ind., said deals are tough to find unless you know what to look for.
“You won’t get a deal unless you can find someone who has bought stuff really cheap,” he said. “Most dealers don’t want to give it away. It’s a very tight market.”
Investors are looking for certain forms of precious metals on the market, he said.
“Bulk 90 percent silver coins are seeing smaller premiums than usual,” he said. “Some of your silver coins, those that are better than junk, will do better in the future.”
Anyone looking to sell off their 90 percent silver coins should know that dealers are paying less for it though, he said.
“They don’t want to buy it if it means they’ll have to hold onto it for a while,” Jarvis said. “I had someone come in who was selling five $1,000 bags of silver coins, some of it brilliant uncirculated. I called a few dealers that might be interested in it, but for the prices they quoted, the seller didn’t want to get rid of it.”
Fuljenz recommended buying in a state that you can legally get the precious metals tax free.
“Over 30 states have exemptions on precious metals,” he said. “Make sure you buy enough to make that exemption. Some states require you to buy $3,000 or more to make the exemption.
“Or buy it in a state with a total exemption where you can buy any amount tax free. There’s only about 11 to 12 states that have total sales tax exemption.”
He said buyers should make sure such deals are done legally and with a reputable dealer.
“I will tell you that I have seen counterfeit bullion,” Fuljenz said. “We helped a man recover $84,000 he had lost in counterfeit 2011 American Eagle gold bullion coins.
“Know who you’re dealing with. What expertise do they bring? Check out their website. If they claim to be a member of PCGS or NGC, call those companies and verify it. As Ronald Reagan liked to say, ‘trust, but verify.’”
Jarvis said knowing the precious metals market puts buyers in a good position.
“Investors out there are pretty smart and they know the buy and sell ratios,” he said. “Just today the market jumped up. If you sold silver yesterday and tried to buy it back tomorrow, you’re going to lose money. I try to make money when I sell.”
A great resource to use is the Internet, where precious metal prices can be compared and trends analyzed, he said.
“There are a lot of places online selling precious metals,” he said. “If you go on and shop around, you can find what the prices are. You can protect yourself from paying too much.”
Buyers should watch metals values to make sure they don’t miss out on any dips or jumps in price.
“If silver was to go up $2 to $3, we’d see a rush to buy it and more people come back on the market,” Jarvis said. “Investors are wondering if they’re going to miss the bottom and watch it go back up.”
So, it pays to keep an eye on the market when looking to buy bullion.