Graded (slabbed) GOLD coins versus generic bullion
Been stacking predominately silver over the past three years with a little gold thrown into the mix. Current value, a 6 to 1 ratio. Do not even want to think about the physical weight ratio.
I have been talking to several PM dealers about converting some of the silver to gold, getting the value ration down to 3 to 1 or maybe even 2 to 1. I find their knowledge very useful, however their sales tactics deplorable. Most offer less than spot per pounce on the silver, however still want the premiums levied on the gold. They want their cake and eat it too. Well hell, I am not a baker.
Finally spoke with someone who recommended pre-33 gold coins, specifically $20 double eagles that were graded MS63 or MS64. Talk about premiums, a bit over 10%(if you look carefully) or more!
Started digging around the idea of slabbed coins and found out when gold bullion hit its high of $1900 back in August 2011, these graded coins were selling for $600 over spot. The selling price for these graded coin followed the same pattern in November 2011 and March 2012 when gold all most crested $1800.
I am in the process of finding more historical data on selling prices of these graded coin before the "gold rush" of July 2003. This was the starting point when spot gold had a steady increase in value. Before then it was pretty stagnate at $275 to a little over $300 spot (my data only goes back to 1997). Ironically, gold has since seen the same stagnation from 2013 ranging from $1200 to $1300. The swing in price differential ratio is also comparable between these timelines. Manipulation? From what I can tell, these graded coins were not affect and possessed more of a free market value.
Sorry for the verbal diarrhea, sometimes the voices in my head make to the internet and the second cup of coffee has certainly kicked in.
Good work in doing your research before buying. Unfortunately, the wide gap in premiums between selling and buying is the nature of this particular beast. Your best bet is to keep shopping around and look for the seller and buyer with the best premiums, then give them the business!
No doubt! As @goldrooster addressed above I can picked up MS64 coins from those vendors mentioned, yet only pick up MS62 or MS63 coins from other dealers at the same price.
The only graded coins I do not like are graded bullion coins (by Apmex or MCM for example). Here the premium you pay will never earn itself back. Mintage is much too high and almost all coins are of the same quality.
I am new to buying gold. I have two reasons for buying. 1.) I like it , its cool 2.) I want to have protection against a 2008 scenario.. What are your thoughts on reason #2
Precious metals investing is like an insurance policy. You will never get a 'market' type of return on investment, you hopefully never have to use it and it is all ways good to have. So yes, gold and silver are a great way to protect yourself from a 2008 type of even. PMs will not get you rich (unless your piles are high and deep) they will provide a hedge against the oncoming financial straits.