O.T. - Gold
Any gold experts out there?.......specifically experts in Double Eagles?Going through the mass of correspondence that accumulated during my month-long vacation I discovered an intriguing offer to sell 25 Double Eagles for C$37,500 (C$1500/coin). The offer came from an oil patch business acquaintance. I am guessing that the guy needs some cash. The true price of the gold content of these coins at today's gold spot price is approx. C$34,500.
I am not a coin collector but I do have an interest in gold bullion coins. I have been accumulating Canadian Maple Leafs for years. I also have a few British Sovereigns and South African Kruger Rands. A brief tour through Google suggests none of the Double Eagles offered to me has a numismatic premium - 1899(2), 1904(3), 1908(2), 1924(15), 1927(1), and 1928(2).
Question is - Does a premium over gold content exist in the market for non-numismatic Double Eagles? The guy making the offer to me is asking a premium of about C$120/coin. I wouldn't mind adding a few American circulation strike Double Eagles to my little stash of bullion coins.
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13 comments
Having sold gold coins near the peak, after much research, I have found the most competitive dealers will purchase gold at 90 - 92% of spot price. If your friend needs cash, selling to a very competitive dealer will only garner him $31,500, at best.
So, if you are looking to acquire gold coins, advertise that you are buying at 95% of spot price and you should have ample opportunities. Or, make your friend an offer at $32,500 and see what he comes down to. At $32,500, you're still offering more than he'll get ANYWHERE else.
IMHO, Buying gold coins at 108% of spot price is quite inadvisable, unless you are highly speculative of the spot price rising.
Your reply has convinced me to take a pass on this deal. I will probably be doing oil patch business with this guy in the future so I don't want to piss him off by grinding him on his Double Eagles.
I'll stick with Maple Leafs.
I can tell you this. The bullion coins that I buy at a big dealer in Calgary carry a premium of 2.25%-2.75% over the daily London gold spot price. These coins are the .99999 pure Maple Leafs produced by the Royal Canadian Mint. Premium varies according to amount purchased.
I have never sold any gold so I can't tell you what the discount would be at the same dealer.
The "cash for gold" places are a joke (if not criminal)! They buy at something like 65% of spot price (can you say stolen merchandise?).
If you ever meet someone selling, by offering to buy at anything above 90% but below spot price is a win-win. They're getting more than they would have gotten at the best of dealers and you're paying less than you would have through a reputable dealer.
As a portfolio manager, I use www.goldprice.org to check the prices throughout each day.