written by reader Buying physical Gold. Where or who to buy from? 1 oz. coins vs 1 oz. bars?

By jbnaples, July 22, 2017

I’d like to allocate about 20% ($10,000) currently, of my investments in physical gold.
Can some of my friendly Gumshoe Irregulars share with me the best way to buy and eventually sell my physical gold? Where or who from and to?
1 oz. coins or 1 oz. bars? Does it really matter if you’re not buying collectible coins?
American vs Canadian?
Thanks in advance for any wisdom you care to share. JB

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Travis Johnson, Stock Gumshoe
July 25, 2017 8:53 am

I personally like buying official US and Canadian coins, since those are typically sold at a low premium and are well-recognized. I tend to use APMEX as my online dealer, their prices are good and I’ve found them to be reputable and have good customer service, but I’m sure there are lots of good dealers out there. It does not necessarily matter if you’re not buying collectibles, but if you’re talking about coins that cost $1,200-$1,300 apiece I don’t think it’s worthwhile to save $20-50 by buying an unknown and uncrecognized coin that might be harder to sell — the easiest standard one-ounce bullion coins to sell are American Eagles, Canadian Maple Leafs, South African Krugerrands, Austrian Philarmonics and maybe the British Britannias.

I do also like some of the “pretty” coins and special editions, so I like the ultra high relief coins from the US mint that come out every couple years, and I like the “five 9s” Call of the Wild coins from Canada that come sealed in assay cards (being 99.999% pure instead of 99.99%, which is a bit of a gimmick but still generates investor interest), but those will all cost a bit more than a standard coin and the collector value in the future is uncertain.

Most good dealers will give you both their buy and their sell price, so you can get an idea of the friction — right now, for example, APMEX notes on their website that the price to buy a 2017 1 oz gold American Eagle BU (brilliant uncirculated) is $1,325, but the price they would pay to buy that coin is $1,263. That doesn’t mean they’ll definitely buy your coin or that this price is promised to everyone, from what I can tell, but it gives you some idea of the bid/ask ratio for gold coins. Local coin dealers are a dying breed, in my experience, so it’s good to find some mail order/online shops that you trust — and you’re wise to think in advance about how and to whom you might sell those coins in the future, folks often ignore that crucial part of the transaction (even if you don’t ever plan to sell your coins, do have some notion of how you would if you had to do so tomorrow).

And, of course, if you buy coins to hold yourself you have to somehow store them — which may incur costs and/or risks.

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