Spot Prices Decline, Create Buying Opportunities
Recent declines in precious metals prices may create opportunities for collectors and investors, but understanding the differences between bullion and numismatic products remains essential.
The spot price of gold and silver has not made many headlines recently, but they have been slowly declining from their record values several months earlier. If you are interested in coins composed of either of these metals as a long-term investment or for a coin collection you are unlikely to resell. This price decline is of little consequence to you. It may even be a buying opportunity.
Regardless of whether you are looking for a short-term investment opportunity or a long-term hold position, it is important to understand the differences between some of the gold and silver numismatic products you might encounter. “Rounds” are different from coins. Rounds have no legal tender denomination and will, in most instances, buy and sell for less than true coins. True coins may be “refinery grade,” bullion, or collectible. Recognize if you have what is popularly called junk silver only a refinery could love, bullion that will likely trade later at whatever level bullion is at, or collectible coins.
Some bullion issues are worth having professionally graded, while others are not. If I post a bullion-type coin or a modern commemorative in Mint State 65, this is an ungraded coin more likely to follow the spot price of its metal content. Be aware that even scrap silver or bullion gold is viewed differently by the purity of the metal involved. Circulation strike U.S. silver coins of the 20th century are 90 percent silver. War nickels are 35 percent silver.
Refineries and, therefore, dealers who send such coins to refineries will offer a different discounted price for these than for a 99 percent silver coinage. Likewise, silver from other parts of the world may be 83.5 percent or sterling (92.5 percent) silver. Refineries have more difficulty melting these and pay less. So do coin dealers. Likewise, the same is true of gold coinage. Sales of some metal purities may be slower than others. All of the above impact resale value.
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