Small US Gold Coins

Starter · Mar 5, 2016

Over the last 3 years, I have been a collector of silver coins, but not gold. Recently, however, I have made my first steps in the endeavor of collecting gold coins. The plan is to gradually build my gold stack over many years, one coin at a time.

At the moment, my interests are in the modern $5 US gold coins, and I have bought two of them as of today. Since I couldn't find a forum thread covering this topic, I started this thread (some of this material is taken from different threads and moved here).

Here is the 1st gold coin in my collection:

http://www.ebay.com/itm/191802157009?_trksid=p2060353.m2749.l2649&ssPageName=STRK:MEBIDX:IT

This coin is the 2015-w US Marshal Uncirculated $5 gold coin. According to the sales figures on Coin News, the mintage of this coin is 6,743, which is very low for coins of this kind. A few coin shops may still have these coins in their inventory, but they are clearing it out quickly.

I have also made a purchase for a 2nd gold coin, but it has not yet arrived:

http://www.ebay.com/itm/1991-W-Moun...363004?hash=item51e01d3afc:g:9QMAAOSwHnFV303O

This coin is the 1991-w Mount Rushmore Uncirculated $5 gold coin. Although the mintage is higher for this coin, and it has a lower grade, the price I paid was very close to spot.

Starter · Mar 5, 2016

Just a few words about my gold buying experiences... For these kinds of purchases, due to the small quantities involved, eBay often has better prices than the big dealers. Therefore, I have begun to familiarize myself with the eBay buying process. I have learned the eBay auction process and placed some bids before. Although I have not won any auctions yet (because I want to be sure the price is right before bidding), I have gained some useful experience in auctions that may help me with future purchases (the key is to have the discipline to bid only according to your budget).

For example, the 2016 Mark Twain coins are still available from the US Mint, but I would rather buy one of the coins from eBay because they are often sold in a graded PCGS/NGC slab. At the moment, slabbed coins are priced much higher than the raw coins from the Mint, but this may change later during the year, as the mintage of the coins increases. So I will look at the premium of this coin later during the year, to see whether my theory is correct, with the hope that the premiums of the Mark Twain coins will go through a dip at some point.

Irons · Mar 5, 2016

The new/old Gold coins the mint will be coming out with are going to be awesome. Mercury dime @ 1/10 oz, Standing Liberty quarter @ 1/4 oz and Walking Liberty half @ 1/2 oz are going to be beautiful coins. I will probably wait and get them from places other than the mint after the hubub dies down and the prices drop down to more normal.
They can discontinue the eagle series as far as I'm concerned when they start making these. Maybe keep the 1 oz eagle.
The US had flat out gorgeous coins before they started putting dead presidents on them. I never appreciated how cool they were until I started finding them with my metal detectors. Now if I could just find a old US Gold coin...................

Starter · Mar 7, 2016

Just got the 1991 Mount Rushmore coin today. This time I found a better place to take the picture, with natural sunlight as my light source:

For an MS 69 coin that was bought at a price very close to its melt value, I would say this was money well spent!

Later I may do a retake of the picture of the 2015 coin, using this naturally-lighted location for the new picture.

nickndfl · Mar 7, 2016

Keep on buying whenever you have spare $. Buy some silver too with your spare change.

shamash · Mar 7, 2016

The gold mercury dime is coming out end of April. :thumbs up 2:

http://news.coinupdate.com/2016-mercury-dime-centennial-gold-coin-gets-release-date/

Starter · Mar 25, 2016

Here is my latest order, a 1999-w George Washington coin, graded PF 70:

http://www.ebay.com/itm/1999-W-Geor...ative-Coin-PF70-NGC-Brown-Label-/331808899653

Like most proof issues, this one does not have a particularly low mintage, but demand for this issue is strong. Recent auctions of coins like these have sold from 450 to 500, while this listing offered one at about a 20% discount, at 373.

Looking to round out my gold coin collection with a proof coin from 1997 to 2004, at this good a price, I decided to buy (even though this purchase already eats into next year's budget).

Once I have all 4 coins together, with good sunlight (and the spare time), I will try to take a picture of them.

Wellsburg · Mar 25, 2016

Hello Starter
I am also an avid gold/silver hoarder. However, I buy mostly 1 ounce gold eagles at spot + $45.00 from my local shop.

Generally, these PCGS/NGC 69 and 70 graded coins sell for huge premiums over spot price. Are you buying gold as an inflation hedge or protection from a currency collapse, or are you collecting coins for their beauty and rarity.

Curious about your goal, as I avoid paying any premium associated with the PCGS or NGC slabs.

oldgaranddad · Mar 25, 2016

Just a word of advice... watch the premium levels on some of those modern coins. The resale market on them can be strange at times with offer close to melt on the higher mintage ones. I am also not so sure how in the long run the MS70 coins will fare as many professional numismatists consider them MS69+ grades. I remember when MS69 coins were as rare as hens teeth and MS70s were mystical unicorns. Look for some semi-key date pre-1929 Indian Head and Liberty Head $5 coins in better grades for your collection, you'll be thankful later on.

Starter · Mar 25, 2016

Wellsburg said:

Hello, Wellsburg...thank you for your question!

I have found, during my 3-year experience of buying silver coins and only this year transitioning to gold coins, that gold coins, relatively speaking, tend have a lower premium percentage-wise, compared to silver coins. So the premiums that one normally finds on eBay for PCGS/NGC 69 and 70 coins looks reasonable to me, as long as you are picky with both pricing and selection of the coins being bought.

I like to collect gold and silver coins for their potential to appreciate in value. Over the last 3 years, I focused on the 5-oz silver ATB coins (and they have performed well over the last 1-2 years), but this year, since the mintage is now being treated like standard bullion, I have decided to move from these coins to small gold coins, starting with the $5 commemorative coins.

Like almost everyone, though, I do appreciate the beauty of coins when looking at them, but this is not the main focus me, except when it applies to the actual value of the coin (which it does, in many cases).

I agree that looking for low premiums is always a good thing, but I have found that in the current market, these $5 commems sell at very low premium, when graded at MS 69 or PF 69. My 1991-W Mount Rushmore coin, graded at MS69, was bought at 320, which was less than 5% premium (at the time I bought the coin). Granted, over the past 2 months, buyers have taken advantage of these low premiums, and the good deals are now harder to find than 2 months ago...but I'm sure those deals will come again later, especially if gold moves upward.

Starter · Mar 25, 2016

oldgaranddad said:

Hello there!

I really like the designs of the Indian Head gold coins, and having a $5 Indian gold coin would indeed be a nice addition to my collection.

But after reading about gold confiscation of pre-1933 gold coins, I am genuinely scared, and I believe I am not the only one! Perhaps this is one reason that modern gold coins are very popular today.

I agree that when buying coins, one must always watch the premium! This is why I buy coins on a budget (though I have taken the liberty of buying a little more during my first year of gold coin collecting).

<===Foolsgold · Mar 25, 2016

I will never buy graded modern coins. Waste of money IMHO.

the_shootist · Mar 25, 2016

Starter said:

I just started investing in pre 1933US coinage. There are some good deals out there and the premiums are all over the place (do your research like anything else) but I'm curious as to why you are scared of obtaining pre 1933 coins where it relates to the 1933 confiscation? If the government were to try this again how would that coinage be any more vulnerable than other coin coins minted today?

Starter · Mar 25, 2016

the_shootist said:

Hello...I am not an expert on this topic, but based on what I read, the gold confiscation of 1933 has an exemption clause for gold coins with collector value. The question of whether a coin has collector value is open, but according to some sources I have read, the government has explicitly defined modern gold coins as belonging to this category (it makes sense, as the coins were never released for circulation).

Now, of course, there are many pre-1933 gold coins that also belong in the collector category, but I think this is a very gray area, which I am afraid might be bent against personal gold holders (like you and me), in the hypothetical situation that a gold confiscation actually happens...

Even if a gold confiscation doesn't happen, the fear of one may negatively impact the resale value of the pre-1933 gold coins, both in the short and long term. So I have decided to play it safe.

the_shootist · Mar 25, 2016

Understood, my personal opinion is that pre 1933 coins are all collector class coins now. Moreover, the rules of the past don't necessarily guarantee they'll be the same in the future. In short I invest in all types of PMs and will deal with the future as it comes. One thing I can tell you, I'm not handing over my wealth because someone in Washington creates a law but that's just me

hernancortes · Mar 25, 2016

Dave Ganz is one of if not the foremost numismatic historian on the confiscation issue. He wrote a piece some time ago if you google him that was pretty authoritative from my memory. It's all fuzzy now but if I recall correctly his claim was that very shortly after the 1933 confiscation a group or groups seeking clarification on the "numismatic exception" clause of the confiscation got an answer back from the gov't that all pre-'34 US gold coins were to be considered numismatic hence exempt from turning in, which is one reason why it was legal for shops to have them, etc. That's kind of a whopping claim so I'd verify that if I were you.

Fiat Metaler · Mar 25, 2016

in 33, when FDR confiscated the gold, all coins were pre-33. So to say anything pre-33 was exempt from confiscation then would have made the confiscation order almost meaningless. There was little non-coin bullion then because the government offered to assay and coin your bullion for free.

since 75, when Ford legalized the ownership of gold by u.s. citizens, the pre-33 moniker has just been a marketing gimmick.

hernancortes · Mar 25, 2016

http://www.usagold.com/gildedopinion/gold-confiscation-ganz.html

the_shootist · Mar 25, 2016

hernancortes said:

I can't take a guy that looks like this seriously

Fjpod · Mar 25, 2016

I guess you can't go wrong with low mintage modern us gold near spot. The keyword is low mintage. Modern gold and silver is funny. If it turns out to be popular with the public, dealers demand a high premium. If it's a dud, even with a low mintage, it may never go anywhere. I have a few myself, but I prefer pre 33 us gold. They don't make it anymore. I've been picking up some decent $5 and $10 gold for $20-30 over spot.

the_shootist · Mar 25, 2016

Fjpod said:

Actually the key words are 'near spot'. Good luck finding that. You HAVE seen the premiums the past couple of months, haven't you?

Fjpod · Mar 26, 2016

Low mintage if you are hoping for numismatic appreciation....but, both are good.

ToBeSelfEvident · Mar 26, 2016

Just monitoring this thread to note who is clinically insane. GSR hit a peak of 83.5 on March 1 and is currently around 80:1.

Fjpod · Mar 26, 2016

ToBeSelfEvident said:

Clinically insane?? for buying gold? Time will tell...but if I were buying gold for appreciation potential, I would buy old gold, in decent shape slightly above spot.

On the other hand, right now, with the GSR where it is, you do have to respect silver. I love old silver.

Dude · Mar 26, 2016

ToBeSelfEvident said:

lol

Starter · Mar 26, 2016

ToBeSelfEvident said:

Metal prices are only half of the picture.

In the world of modern US commemoratives, high-grade silver coins are trading at a +200% premium over spot (for silver dollars) on the secondary market, whereas comparable gold coins are trading at a +33% premium (for five-dollar coins). That's a huge difference. The 5-oz silver coins have a lower percentage premium, at approximately 90% premium over spot, but this is still a lot higher than gold premiums.

It will take a pretty big increase in the price of silver before silver premiums go down to anything near that for gold coins. But if silver goes up in value, premiums will go down to keep sales going.

Now for ordinary bullion coins, like the silver eagles or post-2015 ATBs, premiums will be lower, but then numismatic appreciation potential will be lower as well.

the_shootist · Mar 26, 2016

ToBeSelfEvident said:

You can only stack so much silver man....unless you own an 18 wheeler

Dude · Mar 26, 2016

Starter said:

The GSR has pulled me out of the gold market completely right now. I have also pulled out of most of the numi silver. Except for 2011 and this year, ATB bullion has had relatively low mintages. Even with the lower silver prices, you can still get your money back for the older ATB's on eBay. I think there's a growing collectors market for the ATB's. When silver went way low in December, there were some nice deals on silver eagles. Because of the high mintage, I think some vendors just wanted their $2 premium back now and then wait on their 2016 eagle orders.

I consider commemorative coins a real specialty group in numi. Look at the coin collecting forums. Eagles and ATB's are semi-numi because with special uncirculated and proofs, the bullion are not just strictly bullion, IMO. I also like the larger size of silver. Collections are meant to be displayed, for many owners.

These combinations don't have me buying gold at this time.

Dude · Mar 26, 2016

the_shootist said:

Trade the silver when the GSR is better if storage is an issue.

ToBeSelfEvident · Mar 26, 2016

I won't have to worry about 18 wheelers any time soon, but somebody who "backed up the truck" when it was cheap might have that problem. I wouldn't mind a little gold but I'll wait til the ratio is closer to 40:1

Starter · Mar 26, 2016

Dude said:

As you might already know, I am also into the silver ATBs, but there were two specific events that pushed me away from buying new ATB coins. For the ATB -P coins, the prices were set at $150 when silver was near $20. Two years later, silver took a 20% drop to about $16, but the ATB -P coins were still sold at the same price, effectively raising the premium over spot from +50% to +87.5%. That relative jump in premium over spot can make or break the profitability of buying new ATB -P coins. For the ATB bullion coins, the ones starting from 2016 now have much higher mintage than the preceding few years, leading to less potential for higher premium.

During the years from 2012 to 2015 (especially the year 2012), bullion ATBs were a super deal compared to silver eagles (looking back), but now after collectors have recognized their value, the Mint rightfully adjusted their mintages to make the two options more even. But for both ATBs and eagles, the big dealers will always prefer taking their cut over giving customers a price break. This makes it harder to tap into the numismatic potential of eagles and post-2015 ATBs.

When you look at silver coins, I agree that commems are in a category by themselves, due to the very high premium (typically +200% for silver dollars). But they have the special nature of being in low mintages, which somehow justify those high premiums. It is very similar to the old Morgan and Peace silver dollars, which often trade at even higher premiums than the silver dollar commems. Both old and new coins have scarcity, either from low mintages or lack of good preservation.

Gold commems, in my opinion, are in a special juncture, in that they share some of the same characteristics of silver commems and semi-numismatic coins. Like silver commems, gold commems feature some issues that are very low in mintage, allowing for lots of upside potential. But their premiums are more similar to semi-numismatic coins than silver commems. The 70-graded gold commems mostly range from +20% to +40% premium over spot, which is a far cry from the +200% for similarly-graded silver commems. Although it is not hard to find semi-numismatic silver coins with premium in the +20% to +40% range, the mintages of those coins will likely be far higher than the gold.

Of course, low mintage alone is not enough to boost collector value, like we see with the First Spouses, but I believe that for standard $5 gold commems, the low mintage is very likely to bear fruit down the road. On eBay, there are several coin shops that hold auctions every Sunday evening, and these auctions often feature the $5 gold commems. These auctions are usually fiercely contested. Even some of the higher-mintage issues get a decent amount of respect, but the low-mintage issues bring extremely fierce competition in the bidding. The issues with high demand and low mintage bring high prices, as anticipated, but the same buyers bid for all of the $5 gold commems. I believe that the 2015 US Marshals coin (with mintage below 7k for the Unc) is a good example of how a slabbed 70-graded coin can trade at or below its original listing price from the Mint (due to, I believe, a temporary oversupply of this coin). When the scarcity of this coin materializes from the clearing of coin shops' inventories, I anticipate a steady increase in the premium of this coin.

oldgaranddad · Mar 27, 2016

Fjpod said:

With Modern coins you really need to be careful. Grade inflation is really becoming noticable. The 2001 $5 Capitol Visitors Center seems to be the key date http://www.pcgscoinfacts.com/Coin/Detail/9792 yet I remember when there were no MS70 coins and the MS69 population was already over 1,000. Now MS70s all of a sudden they are 9% of the MSs69 population. Out of a mintage of 6,761 all of a sudden PCGS discovers all these 70s? What happened? In the long run I think this will eventually end up badly for those who invested in the MS70s.

Fiat Metaler · Mar 27, 2016

the_shootist said:

Ganz' article is essentially a summary of Henry Mark Holzer's law review article "How Americans Lost the Right to Own Gold and Became Criminals in the Process", 39 Brooklyn L. Rev. 517 (1973), which i read several years ago.

I don't recall anything of importance to the layman in Holzer's article that is not Ganz' article.

Ultimately, both articles provide a legal history that of the prior importance of pre-33 coins under U.S. Treasury regulations. However, we are much less a country of laws, so paying a premium for those coins with the assumption that they will be exempt from government confiscation is a questionable strategy imho.

Irons · Mar 27, 2016

the_shootist said:

Buy Gold until you can no longer afford it. Then buy silver. ~ Master_Ho

.

Starter · Mar 29, 2016

Starter said:

The 1999-W Washington coin has finally arrived.

Here is a photo of all 4 coins:

I will now take a break for several months and look at what the market has to offer early next year.

The newly released National Park Service $5 gold coin looks nice, but I want to wait until then before considering buying.

Starter · Apr 7, 2016

Wow...I can't believe I just broke two promises to myself:

1) I bought an old-fashioned US gold coin, against my previously stated disinclination to buy coins like this.

2) I bought another gold coin in advance, taking one more gold coin from next year's budget.

After seeing this coin, though, I think most would agree that this was a good buy:

http://www.ebay.com/itm/1906-S-US-Gold-5-Liberty-Head-Half-Eagle-NGC-MS62-/401091372716?hash=item5d62e8a6ac:g:CdQAAOSwHgVW7o~m&nma=true&si=6g6hjX6QSLm1r2StunHR2juO5L0%3D&orig_cvip=true&rt=nc&_trksid=p2047675.l2557

There were so many compelling reasons for me to buy this 1906-S Liberty Head half eagle:

1) This coin is dated 1906-S, coinciding in time and place with the 1906 San Francisco earthquake. The coin has genuine historical value!

2) With its grade, year, and mint mark, it has a book value of 775 (in the NGC catalog), which translates to 465 for my personal price scale, or 42 above its listing price.

3) This particular coin has an NGC population of 179, which is very small for coins of this grade and type--comparable to the 2015 US Marshals First Day of Issue in scarcity.

4) After convincing myself that the old-fashioned gold coins are a safe buy, I decided that having a 110-year-old coin to match my modern half eagles would be a nice match.

5) With gold in an apparent long-term uptrend, I do not regret buying another gold coin in advance...this just means that I will be a bit more frugal next year.

Irons · Apr 7, 2016

$123 premium?! :surrender:

Sheeyit! Sure it's cute and all but no thanks.

MrLucky · Apr 7, 2016

Starter said:

While I agree with buying some coins with historical value, I sometimes prefer them to be of a lesser grade (this one is MS62). I like a more worn coin, as:

1) I can't afford the higher grade, yet I still get to own the coin.
2) I like a coin that was in circulation as opposed to being in someones drawer or coin collection.

I do at time violate my own rules too. I have a MS62 1849 penny (gorgeous coin, great detail) and an AU58 1849 gold dollar (equally gorgeous although it's tiny 0.04838 t oz). I know the history of the penny (private collection) but not the history of the gold coin.

I have a few old (100+) raw coins as I like that the coin was actually 'used' by someone, i.e. high fondle factor.

Starter · Apr 7, 2016

Irons said:

I know the feeling. Different people have different levels of tolerance for premium (sort of like alcohol), but the basic idea is the same. Personally, my ceiling price for gold coins of this size is 450. This coin was the highest-priced gold coin I have bought, at 423.

A few weeks ago, I placed a bid for a 1997 FDR half eagle, in MS 70 condition. The minimum starting bid was 385, which was well below recent market prices of the coin. Knowing that a buyer got a good deal at near-melt price for a lesser version of the coin (in MS 69 condition), I reckoned that my chances of winning this auction were pretty good.

One minute before the ending time for this auction, my minimum bid of 385 for this coin was still the high bid, and I honestly thought that I would win the auction. Just in case there were other bidders, I raised my maximum bid to 410, and my bid of 385 held well into the last minute of bidding.

Less than 10 seconds before the ending time of the auction, two bidders immediately bid higher than me for this coin, at bids of 501 and 511. Talk about a high-premium coin!

The truth of the matter is, US half eagles have a very wide range of premium, ranging from near-melt to soaring numbers in the thousands. I haven't seen any of them bought in the thousands, but I have been in auctions where the winning bid was more than 100 above my high bid--I would never buy the coins at those prices.

MrLucky said:

I fully agree with your points 1 and 2 above. Actually, I was also looking into buying an AU Liberty Head half eagle for the same reasons, but it seems like the dealers tend to sell those coins as raw ones. As I prefer to buy graded coins, for authentication and protection purposes, the MS coins seem to have more listings, and potentially more good deals. So it happened that the first deal I seriously considered was for a coin in MS 62 condition.

In the case of the 1906-S half eagle, I based my decision on the NGC price guide versus the listing price. My personal price scale uses 35% of the premium in the NGC price guide. So, for example, this coin has a book value of 775, which has a premium of about 475. My scale accounts for 35% of that premium, which is 166, and added to the melt value of 299 comes to about 465, which is higher than the listing price of this coin.

As far as being a part of history, I agree that circulated coins do this better in general. However, I think the 1906 San Francisco earthquake is an exception, because the San Francisco Mint played a key role during that event. In this case, I feel that having a coin in MS condition better ties that coin to the San Francisco Mint.

By the way, I took a look at the NGC book value of the 1849 MS62 cent. If that is graded Red Brown, then you have a very valuable coin in your possession, with a book value of around 750. You will want to protect that red color as much as possible. Even if its just a Brown MS 62, the book value is around 440, which is higher than some MS 69 half eagles!

After all is said and done, I plan to have this coin in my permanent collection, as I do not intend to buy any more Liberty Head half eagles.

Chester-Copperpot · Apr 7, 2016

Selling slabbed and premium stuff is a bitch. Learned my lesson and just stick to 1 oz gold bullion Maples. Lowest premium and getting spot is easy. Buying fractional 1/4 oz and 1/10 is a waste of premium.

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