As an investor in bullion type American gold coins, you don't want to spend any more than you have to over gold spot price in premium.
Dealer markup is unavoidable and keeps your source for gold coins in business.
Numismatic gold coins can have a higher markup depending on the rarity of what you're looking for.
Most investors want to keep markup to a minimum, and therefore avoid this type of gold coin in their portfolio.
Premium over the spot price of gold isn't entirely bad.
Under certain circumstances with numismatic coins, you'll get that premium back when you go to sell.
For this discussion however, we're just looking at paying minimal premiums.
Here's a quick way to determine how much you're paying for gold from various sources.
Check local dealers first.
It's good to have an established relationship with a local dealer.
Then move to online sources, if they turn out to be significantly cheaper than local.
Keep track of this as you figure out the best place to shop for your American gold coins.
1/8 oz price: $________ x 8 (for full ounce) = $________ price per oz 1/4 oz price: $________ x 4 (for full ounce) = $________ price per oz 1/2 oz price: $________ x 2 (for full ounce) = $________ price per oz 1oz price: $________ (no math required) Now, take the price per ounce and subtract it from the spot price.
Example for a numismatic coin: Swiss 20 franc gold=1/8 ounce AGW of gold at $275 x 8=$2200.
Spot gold price is $1345 for example.
$2200-$1345=$855 premium.
Now divide the difference (or $855 premium) by the spot price = $855/$1345x100 = 63.
6%.
In this example, you would be paying approximately a 64% premium to own these coins.
Keep in mind that fractional ounce gold always has a higher premium over full one ounce coins.
Numismatic value is included in this premium.
You should get much of that part back when you sell.
Also fractional ounce gold coins are more affordable to more people than whole ounce coins.
That means a greater market demand for them when it comes time to sell.
I suggest owning both fractional ounce and full ounce gold coins for that reason.
This value is the best way to decide what coins you want to own and what might be a reasonable price.
Just remember, you don't control this, the market does.
You can only pick within the options.
Having small premiums are why so many people are attracted to bullion coins.
Example for a bullion type coin: 1 ounce American Eagle price=$1426 minus the Spot gold price at $1345=$81 $81/$1345x100 = 6% premium The lowest priced American gold coin dealer changes over time.
That is, the lowest priced gold coin dealer, especially on the internet, doesn't often stay the lowest priced dealer for long.
If you want to continue to get the lowest price, keep checking their prices before you buy..
If you have a local dealer with fairly low prices, continue to shop there.
You get your coins immediately, which I find very satisfying.
You don't pay shipping and handling, which can really add up.
In my State, there's no tax on money, which surprises me because my State taxes everything.
Dealer markup is unavoidable and keeps your source for gold coins in business.
Numismatic gold coins can have a higher markup depending on the rarity of what you're looking for.
Most investors want to keep markup to a minimum, and therefore avoid this type of gold coin in their portfolio.
Premium over the spot price of gold isn't entirely bad.
Under certain circumstances with numismatic coins, you'll get that premium back when you go to sell.
For this discussion however, we're just looking at paying minimal premiums.
Here's a quick way to determine how much you're paying for gold from various sources.
Check local dealers first.
It's good to have an established relationship with a local dealer.
Then move to online sources, if they turn out to be significantly cheaper than local.
Keep track of this as you figure out the best place to shop for your American gold coins.
1/8 oz price: $________ x 8 (for full ounce) = $________ price per oz 1/4 oz price: $________ x 4 (for full ounce) = $________ price per oz 1/2 oz price: $________ x 2 (for full ounce) = $________ price per oz 1oz price: $________ (no math required) Now, take the price per ounce and subtract it from the spot price.
Example for a numismatic coin: Swiss 20 franc gold=1/8 ounce AGW of gold at $275 x 8=$2200.
Spot gold price is $1345 for example.
$2200-$1345=$855 premium.
Now divide the difference (or $855 premium) by the spot price = $855/$1345x100 = 63.
6%.
In this example, you would be paying approximately a 64% premium to own these coins.
Keep in mind that fractional ounce gold always has a higher premium over full one ounce coins.
Numismatic value is included in this premium.
You should get much of that part back when you sell.
Also fractional ounce gold coins are more affordable to more people than whole ounce coins.
That means a greater market demand for them when it comes time to sell.
I suggest owning both fractional ounce and full ounce gold coins for that reason.
This value is the best way to decide what coins you want to own and what might be a reasonable price.
Just remember, you don't control this, the market does.
You can only pick within the options.
Having small premiums are why so many people are attracted to bullion coins.
Example for a bullion type coin: 1 ounce American Eagle price=$1426 minus the Spot gold price at $1345=$81 $81/$1345x100 = 6% premium The lowest priced American gold coin dealer changes over time.
That is, the lowest priced gold coin dealer, especially on the internet, doesn't often stay the lowest priced dealer for long.
If you want to continue to get the lowest price, keep checking their prices before you buy..
If you have a local dealer with fairly low prices, continue to shop there.
You get your coins immediately, which I find very satisfying.
You don't pay shipping and handling, which can really add up.
In my State, there's no tax on money, which surprises me because my State taxes everything.
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