Thursday, June 17, 2010

Gold Coins Question

I know that you have covered this topic before; however, I wanted to ask you a specific question about the types of gold coins. I have 90% silver pre-1965 coins, silver rounds, and some ASE; however, I wanted to augment this with some gold coins. I was looking at the Kruggerands, American Eagles as well as the Mexican gold coins, and other European coins. The main drawback with the Mexican and European coins is that they do not show the content of gold within the coin. In your experience has this been a big concern when it comes time to cash these coins in or barter with them? The Mexican and European coins tend to sell for less of a premium over spot.

Also, you mentioned that the 90% coins are not as good as the mint coins due to their not having the amount of silver marked on them. The concern I had was that with ASEs and rounds they are full 1 ozt silver so you will have to use the entire coin. With 90% silver dimes you could just use what you need. The rounds and ASEs are good; however, I wonder if for the silver side if I shouldn't get a mix of all three.

Thanks for your assistance.


Hi Scott, 
Unless you deal with a specific precious metal dealer you wont get a fair trade so your gold and silver coins will be better sold at those places, you’re not going to be “bartering” them unless you know you’re getting a fair trade, and don’t expect that to happen often in a barter club or street fair after a crisis.
Based on what I’ve seen, they try to take advantage of you, so you’re better off selling it first at a reputable metal trader for whatever amount of funny colored pieces of paper it is worth that day (sell small amounts after the crisis, so as to protect yourself from speeding inflation) . In that case, well recognized bullion coins are accepted for their metal content, so Krugerands, Eagles, Maple Leafs, or Mexicans, its ok. 

As for junk silver in pre 1965 dimes, they are a well recognized coin as well, not only in USA but in many parts around the world too. Indeed do get a good amount of them if you find a good deal. The pre 65 dimes are even better than junk gold jewelry in USA, the thing is that junk gold jewelry is plentiful all around the world so that’s what all the “I buy gold” guys are after it. 

What does this mean? That today I can drop by a “I buy gold” dealer and offer a few silver dimes, chances are that , here in Argentina, he wont ever bother or offer a serious price for them, while a piece of 18K jewelry, I’ll be losing some money in the trade, but he’s buy whatever amount of weight I’m willing to sell.
To get a better deal on my pre 65 dimes in Argentina I’d have to go to a coin PM dealer.

This does NOT, I repeat, DOES NOT mean that you should put serious % of your savings in junk gold, I never said that. I’ve always called in post SHTF pocket change for a reason: Because its very easy to find someone willing to buy it. Do you put 50% of your saving in junk gold? Of course not, but you look around pawn shops or on line for good deals, so as to have a small amount of that readily accepted “pocket change” if you ever need it and you haven’t found a good dealer to sell your coins at. Mostly look for broken jewelry, chains are easy to cut and sell smaller pieces of gold or old wedding bands in pawn shops.

At least for me, the key is not getting fooled when buying. Silver dimes or even broken jewelry getting sold for their precious metal content, you know you still have the actual metal in it and as they say, its not getting any lighter. Just be careful, soon enough there’s going to be lots of con men around trying to steal form people. Just like with everything else that requires a dose of good faith, stick to reputable people that have been around for a while and have others that vouch for them. You are far less likely to be tricked by people with good reputation. Also important, learn your business, do lots of research and dedicate time to learn the difference. I’ve seen jewelry being sold as 18k that was clearly plated. In many cases you can tell the difference just by sight, better yet use an electronic detector.



Anonymous said...

If Scott wants a Mexican coin that has weight and purity markings, he should check out the 2010 Libertad "Angel" series. It's listed at APMEX under Mexican gold (Libertads and Onzas).

I think it's one of the nicest looking coins around, but at nearly $100 over spot per coin, it's also very expensive. An American Eagle at $50 over spot is better deal. BTW, I have no affiliation with or financial stake in APMEX - just offering my 2 cents here.

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