Buying Physical Gold & Silver

[DTEJD1997]

Hey all:

 

I've been dabbling in coin collecting since I was a child.  I was never really too serious until 4-5 years ago.  I discovered "junk silver" USA coins.  These coins were minted before 1965 and were 90% silver.  Obviously, the silver is worth MULTIPLES of the face value of the coins.  For example, I bought some silver dimes the other day for $1.85 a piece.  Some of these dimes were from the 20's & 30's.  Some of the older coins are real works of art.

 

I had been buying them mainly as a good way to get into precious metals.

 

I wish I had started sooner!  I also wish that I got serious sooner, but better late than never.

 

One thing I've started doing lately is buying gold.  Here in the great state of Texas, we have a lot of pawn shops & jewelry stores & such that deal in gold & silver.  Most of them are complete rip-offs and have no idea what they are doing....but not all of them.  So, if I have extra time and a wad of cash, I'll stop in and check things out.

 

Most of the time it is a waste of time....BUT NOT ALWAYS.

 

I have a small circuit of stores that I am visiting and getting to know the managers & owners.  Some places will buy gold for maybe 80% of spot.  They will then sell to me for 105% of spot...I've bought many gold coins from the 1800's and sometimes will get 1/10 oz & 1/4 oz bullion pieces.

 

Now here is where it gets interesting...

 

A few weeks ago, one of my stops had two $5 USA gold coins.  One was from the 1840's and the other was from the 1870's.  Very beautiful pieces.  Sold both of them to me for $800 CASH.  This was about 1/2 oz. of gold, and the price of gold was about $1625 at the time.

 

I had them on my work desk and one of my suppliers noticed them, and commented on how nice looking they were.  He also wondered if I would sell them.  Sure!  everything is for sale at the right price.  He offered $500 for the older coin.  I took it!  This was AFTER gold fell $200 an oz.

 

Now before any of you think I might have made a mistake, I checked the year and mintage of the coin.  It was not particularly valuable ABOVE it's gold value.  That is, it is not really a numismatic coin.

 

So I think I did a great transaction considering that gold fell as much as it did.

 

Another jewelry store that I stop in about once a month, will sell Morgan & Peace silver dollars for $3 over their melt value.  I buy all they have (which usually is not much).  I got 3 Morgan dollars all over 100 years old for $22 a piece the other day.

 

So I guess the point of my rambling post is that you can find "bargains" out there if you are friendly, patient, and have ready cash.

 

Does anybody else buy gold/silver coins?

[compoundinglife]

Does anybody else buy gold/silver coins?

 

I do not but I appreciated the post because as a kid I always used to check the years on the dimes and quarters I had to see if they were made of silver. I have fond memories of the excitement I would get from finding one :)

[biaggio]

Hey all:

 

I've been dabbling in coin collecting since I was a child.  I was never really too serious until 4-5 years ago.  I discovered "junk silver" USA coins.  These coins were minted before 1965 and were 90% silver.  Obviously, the silver is worth MULTIPLES of the face value of the coins.  For example, I bought some silver dimes the other day for $1.85 a piece.  Some of these dimes were from the 20's & 30's.  Some of the older coins are real works of art.

 

I had been buying them mainly as a good way to get into precious metals.

 

I wish I had started sooner!  I also wish that I got serious sooner, but better late than never.

 

One thing I've started doing lately is buying gold.  Here in the great state of Texas, we have a lot of pawn shops & jewelry stores & such that deal in gold & silver.  Most of them are complete rip-offs and have no idea what they are doing....but not all of them.  So, if I have extra time and a wad of cash, I'll stop in and check things out.

 

Most of the time it is a waste of time....BUT NOT ALWAYS.

 

I have a small circuit of stores that I am visiting and getting to know the managers & owners.  Some places will buy gold for maybe 80% of spot.  They will then sell to me for 105% of spot...I've bought many gold coins from the 1800's and sometimes will get 1/10 oz & 1/4 oz bullion pieces.

 

Now here is where it gets interesting...

 

A few weeks ago, one of my stops had two $5 USA gold coins.  One was from the 1840's and the other was from the 1870's.  Very beautiful pieces.  Sold both of them to me for $800 CASH.  This was about 1/2 oz. of gold, and the price of gold was about $1625 at the time.

 

I had them on my work desk and one of my suppliers noticed them, and commented on how nice looking they were.  He also wondered if I would sell them.  Sure!  everything is for sale at the right price.  He offered $500 for the older coin.  I took it!  This was AFTER gold fell $200 an oz.

 

Now before any of you think I might have made a mistake, I checked the year and mintage of the coin.  It was not particularly valuable ABOVE it's gold value.  That is, it is not really a numismatic coin.

 

So I think I did a great transaction considering that gold fell as much as it did.

 

Another jewelry store that I stop in about once a month, will sell Morgan & Peace silver dollars for $3 over their melt value.  I buy all they have (which usually is not much).  I got 3 Morgan dollars all over 100 years old for $22 a piece the other day.

 

So I guess the point of my rambling post is that you can find "bargains" out there if you are friendly, patient, and have ready cash.

 

Does anybody else buy gold/silver coins?

 

Thanks for posting

 

When I was young I collected stamps- so I have thousands of them. Wish I would have gotten into coins instead.

 

I would like to get into buying gold/silver coins...I would like to buy a couple a year + just hold onto them. I agree they are beautiful

 

The local bank sells them.

 

I like your idea for buying How do you know you re not getting ripped off i.e how do you know if you re getting the real deal from a pawn shop or jewllery store. Do you carry a digital scale/calibrated cylander to calculate density. There has to be a more obvious way?

 

What do you do as far as storing? do you keep in safe? at home?

[Parsad]

Hey all:

 

I've been dabbling in coin collecting since I was a child.  I was never really too serious until 4-5 years ago.  I discovered "junk silver" USA coins.  These coins were minted before 1965 and were 90% silver.  Obviously, the silver is worth MULTIPLES of the face value of the coins.  For example, I bought some silver dimes the other day for $1.85 a piece.  Some of these dimes were from the 20's & 30's.  Some of the older coins are real works of art.

 

I had been buying them mainly as a good way to get into precious metals.

 

I wish I had started sooner!  I also wish that I got serious sooner, but better late than never.

 

One thing I've started doing lately is buying gold.  Here in the great state of Texas, we have a lot of pawn shops & jewelry stores & such that deal in gold & silver.  Most of them are complete rip-offs and have no idea what they are doing....but not all of them.  So, if I have extra time and a wad of cash, I'll stop in and check things out.

 

Most of the time it is a waste of time....BUT NOT ALWAYS.

 

I have a small circuit of stores that I am visiting and getting to know the managers & owners.  Some places will buy gold for maybe 80% of spot.  They will then sell to me for 105% of spot...I've bought many gold coins from the 1800's and sometimes will get 1/10 oz & 1/4 oz bullion pieces.

 

Now here is where it gets interesting...

 

A few weeks ago, one of my stops had two $5 USA gold coins.  One was from the 1840's and the other was from the 1870's.  Very beautiful pieces.  Sold both of them to me for $800 CASH.  This was about 1/2 oz. of gold, and the price of gold was about $1625 at the time.

 

I had them on my work desk and one of my suppliers noticed them, and commented on how nice looking they were.  He also wondered if I would sell them.  Sure!  everything is for sale at the right price.  He offered $500 for the older coin.  I took it!  This was AFTER gold fell $200 an oz.

 

Now before any of you think I might have made a mistake, I checked the year and mintage of the coin.  It was not particularly valuable ABOVE it's gold value.  That is, it is not really a numismatic coin.

 

So I think I did a great transaction considering that gold fell as much as it did.

 

Another jewelry store that I stop in about once a month, will sell Morgan & Peace silver dollars for $3 over their melt value.  I buy all they have (which usually is not much).  I got 3 Morgan dollars all over 100 years old for $22 a piece the other day.

 

So I guess the point of my rambling post is that you can find "bargains" out there if you are friendly, patient, and have ready cash.

 

Does anybody else buy gold/silver coins?

 

I did many years ago...about 9-10 years ago.  I was buying gold (ounces, coins, rings, etc) when gold was at $350/oz.  I sold them all over a couple of years in 2007-2009...unfortunately early at around $800-900/oz.  I haven't done it since, as I thought gold was overpriced and speculative.  Although what you are doing is no different than value investing, but you are looking for mispricing in coins, etc.  Cheers!

[LC]

Heh, my father collected Stamps and Coins. I, of course, being younger and slightly more....math inclined?...collected Magic: The Gathering cards. I'm sure the older posters have no idea what that is but perhaps my fellow 20-somethings do. At any rate, last I checked, the more valuable cards have appreciated about 400% over the past 15 years. Works out to about 11% CAGR. I'll have to brag to my folks about that one, they labeled it a "useless game!"  ;D

[DTEJD1997]

Biaggio:

 

I was worried at first about getting ripped off, but I have been careful and lucky.

 

With silver coins, it is fairly easy to spot fakes.  There are not a lot of them out there.  The most valuable silver coin that I've bought might be worth $40 or so.  Counterfeiters are not going to take the time & effort to forge a $40 coin, let alone a $5 coin.

 

Counterfeiting USA money is a pretty serious offense, most casual criminals will stay far away from this.

 

The other thing is that producing a coin for a reasonable cost is probably not something a couple of dudes could do in shed.  You have to have stamping machines, knowledge of metallurgy, and tremendous engraving skills.  The other thing is that once you are familiar with silver coins and have held them, you can spot a fake almost instantly.  They have a certain heft & "feel" to them.  So a counterfeiter would most likely have to have a good amount of silver in their product....

 

The counterfeiting that is more common is taking genuine coins and then altering their mint marks.  For example, take an excellent condition 1880 "Philadelphia" Morgan dollar and add "CC" Carson City mint mark to it.  This would take a $400 coin to a $2,000 coin....

 

There is a foolproof way to avoid this type of counterfeiting!  I simply do not buy highly valued numismatic coins.  I'll certainly pay a few dollars extra if a coin is in exceptionally good condition, but I'm not going to pay hundreds or thousands of dollars.

 

If one did wish to get into rarer coins, there are several reputable grading services that can spot counterfeits and grade coins properly.

 

If you are buying numismatic coins though, you are making a play on a coin's rarity.  I am largely trying to play a coins metallic value. 

 

There have been a few times where I've bought a sack of silver dimes and in sorting through them I'll find a "rarer" date or mint mark.  For example, I once found an 1875 dime from San Francisco.  This is worth about $50.  I paid the $2 silver for it.  Obviously this is a rare find and does not happen often.  I've found a small sack of semi-valuable coins this way through the years though.

 

A similar thing exists for gold coins.  Once you've seen them, it is relatively easy to spot "non gold" fakes.  I also tend to stay away from the rarer coins.  I simply try and buy for as close to the metal value that I can.

 

I also carry a magnet.  None of the coins you purchase should have a magnetic attraction.

 

Additionally, if it is high value I'll weigh it.  There is the official "Red Book" that has the weights of the coins you are looking at buying.  Any gold coin that you are looking at buying should weigh almost EXACTLY what it should, there should be less than a .1 gram differential due to wear...

 

If you are going to get into SERIOUS purchasing of gold coins, there is a neat tool called a a Fisch counterfeit detector.  A counterfeiter can fake various aspects of gold coins.  For example, they can make the WEIGHT exactly the same, but it can't be the correct thickness, as they are adding a base metal to dilute it.  So this Fisch gizmo is machined to determine weight, size, thickness, etc.  Any coin will have to pass every test.  I don't own any of these, but I would if I were to buy serious amounts of gold.  There are Fisch's for all major types of bullion coins, American Gold Eagles, Krugerands, Philharmonics, Maple Leafs, Pandas, etc.

 

Additionally, the guys I'm generally buying from know how to spot fakes and they have established store fronts.

 

None of this is 100% guarantee against fakes, but I've never got one.

 

As to storage.  I keep some at home, some at the office, and I have a couple of safe deposit boxes at the bank & credit union.

 

 

[biaggio]

thanks. intersting

[ShahKhezri]

I own a lot of junk siliver that I purchased in 2003. 

 

For gold, I own a decent amount of MS-63 and MS-65 St. Gauden's and Umberto Lire's that I also bought in 2003.  My dealer was Burt Blumert (RIP) from Camino Coin, thought they were highly reliable and ethical. 

 

Even with the recent drop in the gold price, I probably look up the prices once a year, keep it in the safe and haven't thought about selling them.

[LesPaul]

Heh, my father collected Stamps and Coins. I, of course, being younger and slightly more....math inclined?...collected Magic: The Gathering cards. I'm sure the older posters have no idea what that is but perhaps my fellow 20-somethings do. At any rate, last I checked, the more valuable cards have appreciated about 400% over the past 15 years. Works out to about 11% CAGR. I'll have to brag to my folks about that one, they labeled it a "useless game!"  ;D

 

I didn't know what to expect when searching Magic the Gathering on this forum. But since about the last 10 months or so, most of the 'old' cards or the cards they no longer print any more have appreciated about 3x. I sold 10 of my biggest 'graded' cards on eBay a couple of months ago as somehow Magic cards became larger than any individual position I have over any holding.

 

I get it, nostalgia is a hell of a drug.

 

EDIT: Some cards a lot more than 3x or so.