Buying Gold & Silver Coins

[uscfanhawaii]

Last week I picked up 2 2014 1oz Silver Eagles for $22 each.

I also got 2, 1/4-oz gold Eagles for $350 each.

Yeah, I know, that's a premium for coins....but they are very nice!! :cool:

[tsptalk]

Very cool.

Since we are creating our own silver coins, maybe you experienced folks can help the rest of us understand premiums over spot price....

Why there are premiums. What makes one coin worth more, etc. I assume condition and rarity, but is there something else?

Thanks!

[burrocrat]

raw spot silver and the cost of a 1 ounce silver coin are different things the same way a bushel of whole kernel wheat and a slice of bread are different things.

somebody has to harvest the wheat, haul it to grain elevator to be loaded on a train. then it is hauled to a mill which turns it into flour. after that it gets trucked to a bakery so can go through a manufacturing process and baked into bread that is then sliced and put into a bag. once the loaf arrives at the grocery it gets stocked on the shelf so you can put it in your basket and pay the cashier and haul it home in your s.u.v. and make a peanut butter and jelly sandwich with it.

coins always cost a premium over spot metal the way bread costs more than the corresponding kernels of wheat that went into making the loaf. also, if you buy 1,000 loaves of bread you get a better price than if you just want one or two slices.

[burrocrat]

some bullion coins cost more than others because of the 'full faith and credit' factor. u.s. eagles and canadian maple leafs usually cost about $4 over spot and you can be sure they contain 1 oz. of silver because if you minted a batch of them up out of tin and tried to sell them as silver a lot of treasury department and secret service forces would shoot you.

if you make up a batch of tin coins from the first mint of burrocrat and sell them to an unsuspecting buyer, only the buyer is going to shoot you later if he finds out it's not really silver. and he has to find you and catch you first.

[burrocrat]

keep in mind also that there is a difference between numismatic coins and bullion.

coins minted by a government for currency at face value are different than business strike bullion. numismatic coins do carry varying value based a rarity. a gold dubloon from 1656 will be worth more than a 2012 nickel which isn't even made of nickel any more. these numismatic coins may have worth beyond the value of the raw metal they contain, but only if someone is willing to pay you more than the metal is worth to have it in their collection instead of yours. when the zombie apacolypse happens, the vast majority of numismatic coins will lose all their collector value and become worth only the going rate for the quantity of metal they contain, mainly because folks will place a higher value on groceries or safe passage than coin collecting.

bullion coins on the other hand are exactly what they represent, 1 oz. of metal, the design matters little except to the holder and the strategy is to pay as little over spot as possible as they have no value over base metal price to the money changers in the temple. private mint bulk coins go for $2.00 to $2.50 over spot, up to $4.00 over spot for u.s. eagles. they are all just bullion when the rapture comes.

[burrocrat]

another thing to keep in mind about bullion is that it is nice to have coins in varying weights, like uscfan is doing. during the zombie apacolypse if you are hungry and the going rate for a chicken is 1 oz. of silver but you only have a 100 oz. brick then you got big problems. you could try shaving some off with your buck knife and convincing the merchant it is about 1 oz., but as soon as he sees that you have 100 ounces of silver he is likely to just shoot you, take all 100 oz. and your wife, and keep his chicken.

at least that is how i understand precious metals anyways.

[bmneveu]

another thing to keep in mind about bullion is that it is nice to have coins in varying weights, like uscfan is doing. during the zombie apacolypse if you are hungry and the going rate for a chicken is 1 oz. of silver but you only have a 100 oz. brick then you got big problems. you could try shaving some off with your buck knife and convincing the merchant it is about 1 oz., but as soon as he sees that you have 100 ounces of silver he is likely to just shoot you, take all 100 oz. and your wife, and keep his chicken.

at least that is how i understand precious metals anyways.

Or you could just knock the poultry merchant over the head with your giant brick of silver :laugh:

[bmneveu]

another thing to keep in mind about bullion is that it is nice to have coins in varying weights, like uscfan is doing. during the zombie apacolypse if you are hungry and the going rate for a chicken is 1 oz. of silver but you only have a 100 oz. brick then you got big problems. you could try shaving some off with your buck knife and convincing the merchant it is about 1 oz., but as soon as he sees that you have 100 ounces of silver he is likely to just shoot you, take all 100 oz. and your wife, and keep his chicken.

at least that is how i understand precious metals anyways.

Zombie Apocalypse and Silver Coins? I feel like I have to share this...

Zombucks - The Currency of the Apocalypse (http://zombucks.com/)

[burrocrat]

Or you could just knock the poultry merchant over the head with your giant brick of silver :laugh:

shhh, that is my plan. got to be quick though.

[tsptalk]

So my theory of condition and rarity doesn't play in in the price - like a baseball card, stamp, or limited edition print collection might be affected?

[burrocrat]

So my theory of condition and rarity doesn't play in in the price - like a baseball card, stamp, or limited edition print collection might be affected?

only if you are trading sovereign government official currency from many years ago where the official minted number is far less than the number known left to exist. otherwise it is bullion. which is worth a variable amount of chickens, which mostly depends on how bad folks want chickens today.

that is why it is called 'spot' price. how much will you pay for a chicken right now, today, on the spot?

the markets think of it as 'discovery' or 'true value'. it is the same for all commodities. it is a pure market. it changes by the moment.

the only exception to this rule is if you want a particular design on your chicken and the person that owns it is willing to part with that chicken, for a price. or else if you are quick and can hit them on the head with a brick and take their chicken before they shoot you. that is how the world works.

[uscfanhawaii]

only if you are trading sovereign government official currency from many years ago where the official minted number is far less than the number known left to exist. otherwise it is bullion. which is worth a variable amount of chickens, which mostly depends on how bad folks want chickens today.

that is why it is called 'spot' price. how much will you pay for a chicken right now, today, on the spot?

the markets think of it as 'discovery' or 'true value'. it is the same for all commodities. it is a pure market. it changes by the moment.

the only exception to this rule is if you want a particular design on your chicken and the person that owns it is willing to part with that chicken, for a price. or else if you are quick and can hit them on the head with a brick and take their chicken before they shoot you. that is how the world works.

OR....if you are the US Gov't Mint, and you set a price of $22 for your 1oz Silver American Eagle. Which, by the way, in addition to the inscription 'One Oz Fine Silver', it says 'One Dollar'. Go figure... :blink:

[tsptalk]

So why does a silver coin of Marlyn Monroe or Elvis, for example, fetch $70 - $100+? (Not that I am comparing TSP Talk with Marilyn and Elvis.) :)

marilyn monroe silver coin | eBay

(http://www.ebay.com/sch/i.html?_odkw=marilyn+monroe+silver&_from=R40&_osacat=0&_from=R40&_trksid=p2045573.m570.l1313.TR3.TRC2.A0.H0.Xmarily n+monroe+silver+coin&_nkw=marilyn+monroe+silver+coin&_sacat=0)http://www.ebay.com/itm/1993-MARSHALL-ISLANDS-ELVIS-PRESLEY-1OZ-999-SILVER-PROOF-COIN-/261379503625?pt=LH_DefaultDomain_0&hash=item3cdb6eb609

[bmneveu]

So why does a silver coin of Marlyn Monroe or Elvis, for example, fetch $70 - $100+? (Not that I am comparing TSP Talk with Marilyn and Elvis.) :)

marilyn monroe silver coin | eBay

(http://www.ebay.com/sch/i.html?_odkw=marilyn+monroe+silver&_from=R40&_osacat=0&_from=R40&_trksid=p2045573.m570.l1313.TR3.TRC2.A0.H0.Xmarily n+monroe+silver+coin&_nkw=marilyn+monroe+silver+coin&_sacat=0)1993 Marshall Islands Elvis Presley 1oz 999 Silver Proof Coin | eBay (http://www.ebay.com/itm/1993-MARSHALL-ISLANDS-ELVIS-PRESLEY-1OZ-999-SILVER-PROOF-COIN-/261379503625?pt=LH_DefaultDomain_0&hash=item3cdb6eb609)

Ebay prices are all over the place. I was looking at silver coins there last night. Zombucks are going anywhere from spot to $50 over.

[burrocrat]

So why does a silver coin of Marlyn Monroe or Elvis, for example, fetch $70 - $100+? (Not that I am comparing TSP Talk with Marilyn and Elvis.) :)

marilyn monroe silver coin | eBay

(http://www.ebay.com/sch/i.html?_odkw=marilyn+monroe+silver&_from=R40&_osacat=0&_from=R40&_trksid=p2045573.m570.l1313.TR3.TRC2.A0.H0.Xmarily n+monroe+silver+coin&_nkw=marilyn+monroe+silver+coin&_sacat=0)1993 Marshall Islands Elvis Presley 1oz 999 Silver Proof Coin | eBay (http://www.ebay.com/itm/1993-MARSHALL-ISLANDS-ELVIS-PRESLEY-1OZ-999-SILVER-PROOF-COIN-/261379503625?pt=LH_DefaultDomain_0&hash=item3cdb6eb609)

because folks like drugged up blonde chicks

31398

and over weight middle aged white guys in polyester sequined jumpsuits

31399

but they make such a cute couple

31400

there's no accounting for taste.

psst, want to buy some chickens?

the bottom line is more people like marilyn and elvis than follow tsptalk. it's sad but true. you didn't really want to get famous that way anyways, did you?