Since the price of gold and other precious metals has increased at astounding rates, more and more people are looking at gold, silver, and platinum coins as investments. Many honest and reputable coin dealers can help you purchase these bullion coins at fair market prices. But unfortunately, some are looking to rip off the uninformed and sell them overpriced gold coins.
Before you invest in any of these precious metal coins or bullion, you should research and obtain your knowledge from somebody or somewhere other than the person trying to sell you the coins. "If you don't know your gold, silver, or platinum coins, you'd better know your coin dealer to help you make responsible decisions," advises Professional Numismatists Guild (PNG) President Jeffrey Bernberg of Willowbrook, Illinois.
The Professional Numismatists Guild is a nonprofit organization founded in 1953 and is composed of the country's top rare coin and bullion coin dealers. PNG member-dealers must adhere to a strict Code of Ethics in the buying and selling of numismatic and bullion merchandise.
"To make an informed purchase of gold, silver, or platinum, investors need to be aware of three crucial marketplace factors: the actual cost per ounce of the precious metals; the bullion value versus any collector value of the coin; and timely delivery of the merchandise" continued Bernberg. PNG has published the following guidelines to help investors understand the precious metal marketplace to help you become wise investors.
Gold Investors should be aware that gold bullion coins trade at a slight premium over the actual spot gold price because the sovereign governments mint these coins and only charge a nominal fabrication fee. The spot gold price is based on 100 ounces or larger .999 fine gold bars. Gold bullion coins ranging from 1/10 to one troy ounce trade at 3 to 15 percent premium over spot, based on the coin, its size (for example, 1/10th, 1/4th, 1/2, or 1 full ounce), and the quantity purchased.
Many large gold bullion dealers typically will sell a single American Eagle one troy ounce gold coin at approximately 4 to 5 percent over the current spot or melt value. Dealers will also purchase them from customers at about 2 to 5 percent less than their selling price. American Eagles, Canadian Maple Leafs, and South African Krugerrands are some of the most popular gold bullion coins. Investors should contact several creditable precious metal dealers and shop for the best price.
Finally, and most importantly, remember the sage advice, "If it's too good to be true, it probably is." Many highly deceptive counterfeit gold bullion coins come into the United States from China. These counterfeits are nearly perfect. They are sometimes even fooling the experts. However, armed with the right metallurgical testing tools, a professional coin dealer will be able to discern the difference.
Bullion vs. Collector Coins
Investors need to distinguish between bullion coins, whose values generally fluctuate according to the current price of gold, silver, or platinum, and "rare coins" that can carry a significant collector premium based on historical supply and current market demand.
Some U.S. gold and silver coins may be readily available in circulated condition for a modest premium over their bullion content. Still, those same coins in superb condition may have a significantly higher value. The numismatic premium can exceed thousands of dollars above the coin's melt value. The market for accurately graded, high-quality rare coins has always been strong.
Under normal conditions, the shipment of the coins you've purchased should be received within 10 to 14 days. However, if the seller may be aware of a mint delivery problem at the time of purchase, the dealer should disclose to you that there may be a delay. The PNG does not recommend having coins stored by dealers. Instead, verified storage at an independent, authorized depositary is acceptable for many investors, especially if it involves a large quantity of gold bullion.
If you are receiving your gold coins when you are purchasing them, be cautious as you transport them. Put them inside a briefcase or securely in your pocket. Do not carry them in your hand where people can see them. Additionally, be aware of your surroundings as you leave the coin dealer's building. Note any suspicious characters and go back inside if you feel uncomfortable. You can ask the coin dealer for an escort to your car.
The Professional Numismatists Guild
Members of the Professional Numismatists Guild must adhere to a Collector's Bill of Rights and a Code of Ethics that prohibit high-pressure sales tactics and misrepresentation of the value of items being sold. In addition, PNG members must demonstrate knowledge, responsibility, and integrity in their business dealings. They also must agree to binding arbitration to settle unresolved disagreements over the numismatic property.