Gyroscopic Investing

Why are the prices of various gold coins occasionally different?  For example, the 1oz Kruggerand is selling for about $21 less than the 1oz Eagle right now on BullionDirect.com.

You will find that you pay a higher premium for some coins than others, but you also get more money back when you sell these coins later.  (Take a look at the buy prices, and they are normally higher for Maple Leafs and Eagles than for Krugerrands.)

The reason for the spread is simply supply and demand.  Also, Krugerrands are considered less attractive coins than Maple Leafs or Eagles by many people, which may account for some difference in price.

The one observation that people make that is important to remember is that you do get more gold for your money with Krugerrands, and that makes them very appealing.  OTOH, if you are looking at holding something for a long time, the premium when you purchase it may be less important.

So far, I have found the most reasonable premiums at local coin shows.  I always wondered how MT found premiums in the 2-4% range (non-internet) until I discovered the monthly Atlanta Metro Coin Show.  Also, x2 on Krugerrands...really good bang for buck premium-wise.

Do you guys think there's any downside to buying on the internet?  (BullionDirect.com).

Adam1226 wrote: Do you guys think there's any downside to buying on the internet?  (BullionDirect.com).

If they are reputable and the shipping is fully insured by reputable insurers it should be fine. I used CNI and Tulving on separate occasions and had no issues. They were very professional. I was advised by others to purchase a Fisch tool to test the coins that were sold even by reputable dealers. I felt better being able to confirm the coins were genuine. The nice thing about coins is that they are difficult to forge and easy to test (markings and elemental weight-to-volume specifications).

I like AJPM for mail purchase.  They're not the friendliest, but they do a good job.  They have a retail location as well, which is how I found out about them in the first place (a friend lives in the area).

I have found that it pays to compare prices on different coins across different dealers.  Oftentimes you will find that one type of coin will be a particularly good value at one shop vs another. 

You are always underwater immediately after you buy a coin, due to the bid-ask spread, so it makes sense to minimize that to the extent possible.

Tulving has some of the lowest spot prices, and free shipping.  They even reimburse for the first wire fee.

Adam1226 wrote:Do you guys think there's any downside to buying on the internet?  (BullionDirect.com).

I tried BullionDirect for the first time last month and it worked out very well for me.  I decided I would start with fairly small amounts, so I put in some buy orders for 1/10, 1/20, 1/4, and 1/4 oz gold coins of various sorts, plus a couple 10oz silver 90% orders, all at just above the next highest buy offer and checked my prices once a day or so.  After a couple weeks I had almost two ounces of gold and twenty ounces of silver.  I ended up paying significantly less than if I had gone with Apmex.com (my preferred Internet bullion source) or AJPM (my preferred local gold store).  I paid for the coins by sending in almost 100 ounces of silver bars that I wanted to get rid of.  Their shipping was extremely reasonable in both directions (they even sent me a hard plastic case with pre-paid return shipping for the silver bars) and reasonably prompt as well.    All the coins I received were genuine (using Fisch detectors).  So I've added BullionDirect to my list of places I buy gold from.

fnord123 wrote: I've added BullionDirect to my list of places I buy gold from.

I just started using them too.  I really like them.  Let me know if you have any interesting experiences.

MediumTex wrote: I like AJPM for mail purchase.  They're not the friendliest, but they do a good job.  They have a retail location as well, which is how I found out about them in the first place (a friend lives in the area).

I use them too, having read Craig's recommendation. Maybe he heard about them from you? I've always found them to be friendly. The guy on the phone was stressed out because the phone system was weird that day and perhaps because I was so patient he was extra chatty and friendly. I don't think he's one of the owners.

I think I paid a premium of 4.3%. Always krugs for me.

I've used BullionDirect and have been pleased.  You might also want to check out Gainesville Coins and Merit Financial.  At any given time one may have better prices than another.

Just placed my third order. FYI, for anyone else used to ordering from AJPM: the shipping on orders of fewer than ten coins is up to $25 from $20. Probably still free on ten or more. It didn't stop me from ordering or anything. Just thought I'd pass it on.

Also, you now have to call the next day with the check number. I've never had to do that before.