American Eagle or Canadian Maple Leaf?

Discussion of the Gold portion of the Permanent Portfolio

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vnatale
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American Eagle or Canadian Maple Leaf?

Post by vnatale » Tue Oct 08, 2019 8:51 pm

For those of you are Americans living in the United States and buying gold coins as part of your gold investment, where do you stand on the difference in prices between the American Eagle and the Canadian Maple Leaf? And, for what reasons do you buy one or the other.

In an email last night, I asked this question of one of the gold dealers:

"Finally, the Eagle and Maple Leaf each have the same quantity of gold, correct? What is the reason for the slight premium for the American version?"

The response I received:

"Yes, both the eagle and maple leaf are a full troy once. Do the popularity, recognition and the fact it’s USA the eagle buys and sells for a bit of a higher premium. Also the American Eagle is more private..... no reporting requirements when you choose to sell doesn’t matter how few or how many. The maple leaf is reportable on 25 coins or more."

Thanks for any responses as part of my Permanent Portfolio plan for the gold coin portion is deciding how to apportion it between the Eagles and the Maple Leafs.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: American Eagle or Canadian Maple Leaf?

Post by Cortopassi » Tue Oct 08, 2019 9:28 pm

I look for the lowest premium, which has usually been on Krugerrands in the past. I think they are all nice looking and I have some of each. Panda's are nice too.
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Re: American Eagle or Canadian Maple Leaf?

Post by vnatale » Tue Oct 08, 2019 9:32 pm

Regarding my question...this is additional information from Craig / Tex's book:

"For a U.S. investor, it is recommended that you buy American Eagles, Krugerrands, or Canadian Maple Leafs. While Krugerrands and Maple Leafs often sell for a lower markup than American Eagles, the American Eagle coin will normally provide a higher premium when you go to sell it (all three coins have the same one-ounce gold content). Any coin dealer will buy these coins so there is no need to worry that you'll get stuck with a coin you can't sell."

Vinny
vnatale wrote:
Tue Oct 08, 2019 8:51 pm
For those of you are Americans living in the United States and buying gold coins as part of your gold investment, where do you stand on the difference in prices between the American Eagle and the Canadian Maple Leaf? And, for what reasons do you buy one or the other.

In an email last night, I asked this question of one of the gold dealers:

"Finally, the Eagle and Maple Leaf each have the same quantity of gold, correct? What is the reason for the slight premium for the American version?"

The response I received:

"Yes, both the eagle and maple leaf are a full troy once. Do the popularity, recognition and the fact it’s USA the eagle buys and sells for a bit of a higher premium. Also the American Eagle is more private..... no reporting requirements when you choose to sell doesn’t matter how few or how many. The maple leaf is reportable on 25 coins or more."

Thanks for any responses as part of my Permanent Portfolio plan for the gold coin portion is deciding how to apportion it between the Eagles and the Maple Leafs.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Wed Oct 09, 2019 1:59 pm

Maple Leafs scratch like crazy. Even rubbing them with a cotton cloth will cause damage. If you drop one on the table it will ding. On the floor... Probably it bends in half.
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Re: American Eagle or Canadian Maple Leaf?

Post by drumminj » Wed Oct 09, 2019 2:11 pm

ochotona wrote:
Wed Oct 09, 2019 1:59 pm
Maple Leafs scratch like crazy. Even rubbing them with a cotton cloth will cause damage. If you drop one on the table it will ding. On the floor... Probably it bends in half.
Moral of the story -- avoid fondling your gold!

Or....get a 1970s kruggerand to fondle and keep the rest in the safe.
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Wed Oct 09, 2019 2:56 pm

drumminj wrote:
Wed Oct 09, 2019 2:11 pm
Moral of the story -- avoid fondling your gold!
Or....get a 1970s kruggerand to fondle and keep the rest in the safe.
I keep some silver at home and fondle it. My 100 oz silver ingot.
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Re: American Eagle or Canadian Maple Leaf?

Post by dualstow » Wed Oct 09, 2019 4:36 pm

ochotona wrote:
Wed Oct 09, 2019 1:59 pm
Maple Leafs scratch like crazy. Even rubbing them with a cotton cloth will cause damage. If you drop one on the table it will ding. On the floor... Probably it bends in half.
^ This ^

I have one maple leaf and it's beautiful. But, krugerrands and american eagles have other metals that harden the coin, and that's worth it for long term holders.

Vinny, could you confirm that when you said "Level 4" investor you were referring to something in Craig and MT's book? (As Geaux Saints suggested in the other thread).

(edited to spell Vinny’s name properly)
Last edited by dualstow on Wed Oct 09, 2019 8:51 pm, edited 2 times in total.
ISHARES TRUST 20+ YEAR TREASURY BD ETF's price dropped 2.51 % to $136.89 at 01:17 PM EST today.
-- vanguard email to me
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Re: American Eagle or Canadian Maple Leaf?

Post by vnatale » Wed Oct 09, 2019 4:40 pm

Yes. Confirmed. Level 4 offers the most diversification and the most safety. Level 1 offers the least. Level 1 takes far less time to set up than Level 4.

One can start all four investments at Level 1 and then gradually increase the level of each of the investments, one at a time or all at once.

Vinny

dualstow wrote:
Wed Oct 09, 2019 4:36 pm
ochotona wrote:
Wed Oct 09, 2019 1:59 pm
Maple Leafs scratch like crazy. Even rubbing them with a cotton cloth will cause damage. If you drop one on the table it will ding. On the floor... Probably it bends in half.
^ This ^

I have one maple leaf and it's beautiful. But, krugerrands and american eagles have other metals that harden the coin, and that's worth it for long term holders.

Vinnie, could you confirm that when you said "Level 4" investor you were referring to something in Craig and MT's book? (As Geaux Saints suggested in the other thread).
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Wed Oct 09, 2019 5:30 pm

vnatale, you asked a question in another thread about tax. Are you familiar with the special tax treatment surrounding gold, and the arguments for or against holding gold in IRAs, Roth IRAs, or taxably? I would argue that there is no one size fits all strategy, that where you place your gold is an important part of your overall taxation strategy and how you plan to take distributions in retirement. This is why one argument is to place gold in all the places, to diversify it across different type of tax treatments. That's OK, but if you have a particular angle, you should pay attention to it.

My angles are:
1. I can use physical or ETF gold as a way to make a donation to my Church. Any capital gains vanish, and I don't pay cash to Church.
2. Gold might end up, over the rest of my life, being a really strongly performing asset. Therefore, I have put lots of my physical and ETF gold in Roth IRA form, so it won't get taxed at all, and it can be passed to my heirs. Home run potential assets to Roth
3. I will have low income years age 65-70, so I can take gold capital gains at that time
4. You can tax-loss harvest with taxable gold

Basically, I don't use Traditional IRAs for gold, because Traditional IRAs might end up with you being taxed at a higher rate for gold cap gains than just selling physical. The Collectibles tax caps you at 28%. That could be useful.


Journal of Accountancy:

"For tax purposes, physical gold investments are classified as collectibles. Gains on collectibles held for one year or less are taxed as ordinary income—the same tax treatment as short-term capital gains (STCGs). Gains on collectibles held more than one year are taxed as ordinary income, except the maximum collectibles tax rate is 28%"

STATE SALES TAXES ON GOLD… BAD!!! https://www.texmetals.com/sales-tax
Don’t live in a State which taxes gold if it’s impossible to drive to a tax-free State to pick up purchases
Last edited by ochotona on Wed Oct 09, 2019 8:16 pm, edited 1 time in total.
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Re: American Eagle or Canadian Maple Leaf?

Post by jacksonm2 » Wed Oct 09, 2019 7:03 pm

I have some of both, but mostly American Eagles.
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Re: American Eagle or Canadian Maple Leaf?

Post by vnatale » Wed Oct 09, 2019 7:12 pm

Did you have any systematic way of apportioning? Like 75% of purchases of one and 25% for the other? Or, has it been more haphazard?

Thanks

Vinny
jacksonm2 wrote:
Wed Oct 09, 2019 7:03 pm
I have some of both, but mostly American Eagles.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: American Eagle or Canadian Maple Leaf?

Post by jacksonm2 » Wed Oct 09, 2019 8:08 pm

vnatale wrote:
Wed Oct 09, 2019 7:12 pm
Did you have any systematic way of apportioning? Like 75% of purchases of one and 25% for the other? Or, has it been more haphazard?

Thanks

Vinny
More haphazard than systematic, to be sure.

Bought mostly Eagles until one day I thought it would be cool to buy some other kinds and Maple Leafs were my choice.
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Wed Oct 09, 2019 8:18 pm

vnatale wrote:
Wed Oct 09, 2019 7:12 pm
Did you have any systematic way of apportioning? Like 75% of purchases of one and 25% for the other? Or, has it been more haphazard?

Thanks

Vinny
jacksonm2 wrote:
Wed Oct 09, 2019 7:03 pm
I have some of both, but mostly American Eagles.
I figure I should have enough ETF to do my first major rebalance when I hit the rebalance band. I have 75% physical. Beyond that there's no predicting.
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Re: American Eagle or Canadian Maple Leaf?

Post by vnatale » Wed Oct 09, 2019 9:11 pm

From what I have gathered you pay a premium on buying the Eagle but you also get a premium when you sell it. I've not yet acquired enough information to determine if they come out the same in the long run or buying and selling one or the other is superior.

Vinny
jacksonm2 wrote:
Wed Oct 09, 2019 8:08 pm
vnatale wrote:
Wed Oct 09, 2019 7:12 pm
Did you have any systematic way of apportioning? Like 75% of purchases of one and 25% for the other? Or, has it been more haphazard?

Thanks

Vinny
More haphazard than systematic, to be sure.

Bought mostly Eagles until one day I thought it would be cool to buy some other kinds and Maple Leafs were my choice.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: American Eagle or Canadian Maple Leaf?

Post by geaux saints » Fri Oct 18, 2019 3:11 pm

If it were me, I would go with the lowest premium one ounce coin I could find. Better to take the lower premium now than hope for a higher one on resale.
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Fri Oct 18, 2019 9:30 pm

I've looked at the buy / sell prices over a number of years over a number of dealers, and the Eagles are always the round-trip losers. That said, I probably will never buy another coin, and will be buying ETF AAAU in the future, now that there is no longer any commission to buy it.
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Re: American Eagle or Canadian Maple Leaf?

Post by pugchief » Sat Oct 19, 2019 8:14 am

ochotona wrote:
Fri Oct 18, 2019 9:30 pm
I've looked at the buy / sell prices over a number of years over a number of dealers, and the Eagles are always the round-trip losers. That said, I probably will never buy another coin, and will be buying ETF AAAU in the future, now that there is no longer any commission to buy it.
LOL. There are plenty of cost benefits of ETFs over physical, but $4.95 commissions was not one that made any difference.
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Sat Oct 19, 2019 9:42 am

pugchief wrote:
Sat Oct 19, 2019 8:14 am
ochotona wrote:
Fri Oct 18, 2019 9:30 pm
I've looked at the buy / sell prices over a number of years over a number of dealers, and the Eagles are always the round-trip losers. That said, I probably will never buy another coin, and will be buying ETF AAAU in the future, now that there is no longer any commission to buy it.
LOL. There are plenty of cost benefits of ETFs over physical, but $4.95 commissions was not one that made any difference.
I am so cheap
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Re: American Eagle or Canadian Maple Leaf?

Post by dualstow » Sat Oct 19, 2019 9:47 am

Really, Pug? It makes a difference to me. I don’t buy fractional coins because of the markup. Always one ounce. With gold ETFs, I wanted to dollar cost average, but paying $5 each time I buy, and for an instrument that doesn’t pay dividends, just doesn’t make sense to me.

With zero trading fees, I could spend less than the spot price (or more) total, and buy every week.
ISHARES TRUST 20+ YEAR TREASURY BD ETF's price dropped 2.51 % to $136.89 at 01:17 PM EST today.
-- vanguard email to me
https://www.city-journal.org/journalism-advocacy-over-reporting
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Re: American Eagle or Canadian Maple Leaf?

Post by pugchief » Sat Oct 19, 2019 2:42 pm

dualstow wrote:
Sat Oct 19, 2019 9:47 am
Really, Pug? It makes a difference to me. I don’t buy fractional coins because of the markup. Always one ounce. With gold ETFs, I wanted to dollar cost average, but paying $5 each time I buy, and for an instrument that doesn’t pay dividends, just doesn’t make sense to me.

With zero trading fees, I could spend less than the spot price (or more) total, and buy every week.
DS, you misunderstood my point. When you figure in buy/sell spreads on physical* and markup, plus the cost of storage, insurance, etc, any ETF at .3% a year or less is saving you a ton of money, even with $4.95 commissions. I agree that if you are making many small purchases those $5 dings add up, but consolidating to, say, once per quarter gives you DCA and costs $20/year and just doesn't compare to the costs of physical.

There are some advantages to physical over ETFs, but cost is not one of them.


*(btw Ocho, you talk about MOC orders to avoid the spread of a couple of cent on ETFs while not concerning yourself on the insane spread on coins?)
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Sat Oct 19, 2019 5:26 pm

Yeah, if AAAU existed while I was buying coins, I'd have bought a lot fewer coins. My buying wound down just as AAAU was launching. Can't do anything about that now. No further action until a rebalance band is hit, and I'm using the wide ones. It will be years before I do anything else with gold or gold ETFs.
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Re: American Eagle or Canadian Maple Leaf?

Post by dualstow » Sat Oct 19, 2019 5:46 pm

pugchief wrote:
Sat Oct 19, 2019 2:42 pm
...
I agree that if you are making many small purchases those $5 dings add up, but consolidating to, say, once per quarter gives you DCA and costs $20/year and just doesn't compare to the costs of physical.

There are some advantages to physical over ETFs, but cost is not one of them.
For sure.
ISHARES TRUST 20+ YEAR TREASURY BD ETF's price dropped 2.51 % to $136.89 at 01:17 PM EST today.
-- vanguard email to me
https://www.city-journal.org/journalism-advocacy-over-reporting
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Re: American Eagle or Canadian Maple Leaf?

Post by vnatale » Wed Apr 22, 2020 9:07 pm

ochotona wrote:
Fri Oct 18, 2019 9:30 pm
I've looked at the buy / sell prices over a number of years over a number of dealers, and the Eagles are always the round-trip losers. That said, I probably will never buy another coin, and will be buying ETF AAAU in the future, now that there is no longer any commission to buy it.
You have no concerns with AAAU's relative tiny size compared to the much larger EFTs ahead of it?

Vinny
Last edited by vnatale on Wed Apr 22, 2020 9:10 pm, edited 1 time in total.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: American Eagle or Canadian Maple Leaf?

Post by ochotona » Thu Apr 23, 2020 2:47 pm

vnatale wrote:
Wed Apr 22, 2020 9:07 pm
ochotona wrote:
Fri Oct 18, 2019 9:30 pm
I've looked at the buy / sell prices over a number of years over a number of dealers, and the Eagles are always the round-trip losers. That said, I probably will never buy another coin, and will be buying ETF AAAU in the future, now that there is no longer any commission to buy it.
You have no concerns with AAAU's relative tiny size compared to the much larger EFTs ahead of it?

Vinny
ZERO concerns about size. ETFs that are destined for the woodchipper struggle to grown past $10-$20 million. AAAU has quickly grown to ten times that size.
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Re: American Eagle or Canadian Maple Leaf?

Post by tomfoolery » Thu Apr 23, 2020 4:49 pm

My problem with American Gold Eagles as compared to Maple Leaves is that it's a lot harder to forge a 99.9999% coin than a 93% coin. So, as counterfeit technology improves, we're likely to see more convincing counterfeit eagles than maple leaves.

I find putting maple leaves in $1 air-tite brand capsules to be sufficient to keep them from getting scratched.
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