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Paul in Indiana
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Discussion Starter · #1 ·
Does anyone know why the price of numismatic/collector gold is so high. St Gaudens ms62's at almost $1200 while spot is $765???? 35% premium????What gives?

Makes me wonder what the cause might be. I'm not trying to be alarmist here but if there was a higher risk or insider knowledge of another confiscation of bullion, numismatics would go through the roof. Am I thinking straight here?

Does anyone know if this is in other markets as well or is it just in the US?
 

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I am no expert, but I know dealers are having a hard time filling orders for gold. Waits of weeks for delivery are common.
 

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Unlike bullion coins that are valued solely on the basis of their gold weight, the value of a numismatic gold coin is determined by several factors: its rarity, the number of coins originally minted, and the age and condition of the coin. Numismatic coins are bought and sold within the coin collecting community with little regard for today's gold price. Numismatic coins are cherished for their beauty, historical significance, and their potential investment value. Hence, numismatic coins sell at a significant premium over their intrinsic gold content.
must be to many people hoarding rare coins.
 

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The gold "paper" market (futures) is selling gold "short". That is they sell gold that they do not have for delivery at a future date. They then need to sell the paper or buy gold. The problem is that they have NO gold right now.

Big banks show gold in their inventory, and sometimes have "leased" the gold out to others, and most likely will never get it back. Banks show gold on their balance sheets and they do NOT have the gold. Push comes to shove they either need to buy gold in the marketplace where there is a shortage or they need a BAILOUT.

Long story short there is more gold sold in the marketplace than there is gold. Thus the high prices (the real prices) on gold that you can hold in your hand.:nono:
 

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There are multiple reasons for a coin to have value. Most here look at the raw gold value, especially if considering a SHTF scenario, but one should remember that not all precious metal investments are created equal.

The American Eagle coins are a good example - they're bullion in convenient increments (from 1/10th to 1 oz) with purity guaranteed from a trusted source. They're fairly liquid, can be held without significant trouble, and aren't going to need special testing or verification of their content in order to sell. As such, these go for a premium, but aside from the proof coins their grade isn't much of an issue given that they aren't circulating coins.

Your example - an MS62 St Gaudens is an "Uncirculated" gold coin - has similar benefits in terms of trusted composition, but has the additional attraction of being rare - they aren't making more, and there are a limited number in that high grade. Basically, historical gold coins give a double hedge - they have a raw gold value that's always going to be there, but also a collectors value that allows for potential profit independent of the gold value. But because of this you're going to pay a premium to get in.
 

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But - in a crisis SHTF scenario where you are using the Gold as a trade object, I am not going to sell you wheat based on the numismatic value of your gold coin. To me in that scenario, and even in a normal scenario, an ounce of gold is an ounce of gold. IN SHTF, the allure of numismatic value disappears.
 

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But - in a crisis SHTF scenario where you are using the Gold as a trade object, I am not going to sell you wheat based on the numismatic value of your gold coin. To me in that scenario, and even in a normal scenario, an ounce of gold is an ounce of gold. IN SHTF, the allure of numismatic value disappears.
You're assuming that one buys gold solely for the SHTF scenario. If this is the only reason you're buying gold then sure, avoid the numismatic valued coins and go for the most convenient and lowest cost coins.

But remember that not all gold investors are SHTF investors. Some are hedging against inflation. Some are merely diversifying their investments. Some like coin collecting and are taking advantage of gold coins to both invest in gold and invest in collectibles at the same time. You may not value these factors of investing in gold, but others do, and their demand is part and parcel of the eventual price of gold (and other precious metals).
 

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Paul in Indiana
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Discussion Starter · #8 ·
Unlike bullion coins that are valued solely on the basis of their gold weight, the value of a numismatic gold coin is determined by several factors: its rarity, the number of coins originally minted, and the age and condition of the coin. Numismatic coins are bought and sold within the coin collecting community with little regard for today's gold price. Numismatic coins are cherished for their beauty, historical significance, and their potential investment value. Hence, numismatic coins sell at a significant premium over their intrinsic gold content.
must be to many people hoarding rare coins.
I'm referrinng to "garden variety" Gaudens 62's here. I've been dealing in gold coins for 10 years and have never seen more than a 20% premium on these coins. When bullion was $1000 these Gaudens were about $1200. Now bullion is down 25% but these coins have stayed put. Of course I'm not complaining ;)
 

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I guess I see gold, silver, food storage, sheep, milk goats, rabbits, chickens, gardens, etc as exactly what they are - a means of support for my family in the next coming decade +/-. "Collectibles" aren't even near the horizon right now - except of course if its a really nice bamboo fly rod. :) I know exactly what you are saying - it just seems like a really poor time to be paying for collectibles. Al things have their day - I doubt this is their day though.

I feel really fortunate to have all that I have and the ability to take care of not only my family, but extended family too if necessary. The President of the Mormon Church prophesied quite a few years ago "that there will come a time when a bushel of wheat will be more valuable than a bushel of gold". We are headed in that direction.
 

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Like others have mentioned, the spot price is for paper metals... the real stuff 'in hand' isn't likely to drop... and numismatic gold and silver, imho, isn't as prone to spot prices.

If I were a wealthier gent, I'd have only 'slabbed' coins... as it is, I'm happy with my collection. No gold, though...:p
 

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Texican,
What is a slabbed coin?
Thanks in advance.

Gunga
A slabbed coin is one that has been inspected for grade, certified, and encapsulated in a tamper proof plastic holder... NGS, ANACS, PCGS, and others do this. I can buy a slabbed coin and "know" it's what it's supposed to be. Buy from an individual and you have to inspect it and make a grade certification... the difference in grades can be tens of thousands of dollars. Most coins slabbed are traded by coin 'investors'...
 
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