Gold Moving Toward $1000 Again

In case you haven't tracked the price of gold lately, it has been moving up nicely and is closing in on $1000 per ounce again. Last week, gold had some great sessions due in no small part to problems with a weakening dollar and troubles with U.S. Treasury bonds.

In the last 30 days, gold has gained almost $100 per ounce ($96.80 to be exact). When you consider that gold was priced at $255 per ounce in February of 2001, that is quite a run with almost a quadruple in price. A very recent article stated one expert's predication of $1400 per ounce in the next six months.

If investing in gold is getting a little too pricey for you, don't forget the "poor man's gold" - silver coins and bars. Silver has been having a heyday too lately and is knocking on the door of $16.00 per ounce. If you have yet to start investing in precious metals, seriously consider taking that first step now. Several experts say this ballgame isn't even in the middle innings yet.

Happy investing!

Dealing With Local Coin Shops

There was a recent article written on Opening A Coin Shop which talked about the considerations when starting this type of business.

What the article reminded me of was the pitfalls of only dealing with one or more small local coin shops which may not be able to serve your needs when buying and selling gold and silver. My old boss used to say "the failure rate in the coin and bullion business is 90% every decade". If gold goes to $1500 or $2000 (as some experts are predicting), how likely is a local dealer going to be able to buy back the 10 or 15 Gold Eagles (or other one-ounce coins) you bought from them?

If silver goes to $50 an ounce (as it once did), how likely is a local dealer going to be able to buy back the bag of junk silver you bought from them (at 715 ounces per bag, that would be approx. $35,000).

If you are only dealing with a small coin shop, you might want to consider establishing a relationship with a large coin dealer who is more likely to be in business long-term and be able to handle the larger transactions you have or will have in the future.

Happy investing.

Mexican Gold Pesos

Gold Mexican Pesos are popular coins because of their (usually) low markup. I plan on doing a more complete article on gold pesos but, in the mean time, here are some basic facts.

The largest gold peso is the 50 peso coin. It contains 1.2057 troy ounces of gold or about 20% more than the one-ounce Gold American Eagle.

The Mexican 20 peso gold coin is next with .4823 troy ounces of gold, followed by the 10 peso gold coin with .2411 troy ounces of gold.

The 5 peso gold coin contains .12057 troy ounces of gold, the 2.5 gold peso has .0603 troy ounces of gold. Last is the Mexican 2 peso gold coin with a gold content of .0483. These smaller coins can command a higher premium so shop with care if you decide to invest in any of Mexico's gold pesos.

Happy investing.

Categories of Gold Bullion Coins

In my article on Basic Gold Investing, I recommend that investors start with gold bullion coins. Not discussed are the three categories I assign to gold bullion coins which you may find useful. These categories are:

1. The most common gold bullion coins that are universally recognized and accepted by coin dealers. In this category, I include Gold American Eagles, Gold Canadian Maple Leafs, South African Krugerrands, American Gold Buffalos, Austrian Philharmonics, Chinese Pandas, Australian Nuggets, Mexican 50 Pesos and maybe one or two others;

2. Not as common gold coins as those above but still recognized by coin dealers and readily tradeable (liquid). This would include one or more denominations of The Angel (Isle of Man), Hungarian Korona, French Twenty Franc "Rooster", Dutch Guilder, Austrian Corona, British Sovereign, German Mark, Italian Lira, Russian Ruble and Swiss Franc;

3. Lesser known gold coins which coin dealers are hesitant to accept because of low demand by investors and low acceptance by other dealers.

When first starting out with your gold investing, concentrate on those coins in the first category. There is much less chance you will make a bad decision with any of the gold coins in this top category.

Happy Investing!

Gold Bullion Coins versus Numismatic Coins

In the first article posted on the Gold Investing Simplified web site, Basic Gold Investing, I recommended you start with gold bullion coins. Assuming you are a gold investor (for whom I created this blog for) and not a gold coin collector, that advice still stands.

Pictured above is a $20 Liberty Double Eagle. In its higher Mint State grades, this is considered a numismatic coin and can fetch several thousand dollars. If you invest in this coin, it is obvious the price is not based on the gold content (currently around $900) but on the coin itself. The price for numismatic coins is determined by the particular strike, scarcity, condition (or state of preservation) and demand.

Investing in numismatic coins is not for casual investors. If you are investing on your own, stick with gold bullion coins. If you have the finances and are ready to move up to numismatic gold coins, work with a reputable dealer that has been in business for many years. It will greatly lessen your chances of making bad investments.

Happy investing!

Gold and The Karatage System

I have discussed the karatage system in my article on Gold Weights & Measures but wanted to expand on it a bit. With all the scrap gold being turned in at various local and national gold dealers as well as the popular home gold parties, this is good information for you to know.

Karatage is a system used to express the purity or fineness of gold in 24 parts. Pure gold is 24 karats or 24k. Anything less is a mixture of gold and some other metal(s). Below are various karatage categories with their gold fineness and percentage of gold content:

24 karat = .9999 fineness = 99.99% gold;
23.6 karat = .9830 fineness = 98.3% gold;
22 karat = .9167 fineness = 91.67% gold;
21.6 karat = .9000 fineness = 90.0% gold;
18 karat = .7500 fineness = 75.0% gold;
14 karat = .5833 fineness = 58.3% gold;
12 karat = .5000 fineness = 50.0% gold;
10 karat = .4166 fineness = 41.66% gold;
8 karat = .3333 fineness = 33.33% gold.

Happy investing.

Grading of Coins - NGC and PCGS

There are various companies that grade and certify coins, but two are at the head of the pack (many experts say way ahead of the pack). They are NGC (Numismatic Guaranty Corporation, 1987 to present) and PCGS (Professional Coin Grading Service, 1986 to present).

So what makes these two third-party grading services so special? Because 1) they guarantee the grade and authenticity of the coins they process and approve, and 2) they are about the most respected coin grading services in the world.

Once an NGC or PCGS coin is graded, certified and encased in a tamper-resistant plastic holder, you can be sure the coin has been graded by multiple grading experts and is accurate. If someone offers to sell you such a coin from either of these two organizations, you can be quite confident you are getting what you pay for without ever examining the coin in person. Worry-free site unseen trading is what makes dealing in NGC and PCGS coins so valuable.

If you are spending "serious money" on gold (or silver) coins, regardless of the source, you will want the assurance that these two organizations offer.

Happy trading!