Gold Investing Simplified

Gold Investing - Cash4Gold Lawsuit

2010-03-24T21:33:00.003-05:00

I just finished viewing a video about the class-action lawsuit against Cash4Gold. Whether this lawsuit is successful or not, I think it is good news to bring more attention to the firms that advertise "send us your gold". There have evidently been too many people getting ripped off by some of these firms. Whether Cash4Gold was one, I can only relate my experience.

On my web site, I dedicated a page to my experience selling one piece of scrap gold as a test of how one of these firms works. That firm was Cash4Gold. You can read about it at Sell Scrap Gold

To recap my experience, it took them 12 days and an E-mail from me before they responded. Then I received a check for approximately 14.4% of what the piece (a 10k gold ring) was worth at the time. I said NO. My second E-mail asked for an explanation of their "logic" at which time they offered me 32% of the piece's worth. I said NO. The ring was returned to me 44 days after I had sent it in.

I had heard that Cash4Gold had improved their operation after my experience. Evidently not enough for some customers. Seller beware!

Gold Investing - Karatage System

2010-02-17T22:07:00.004-06:00

Karatage is a system of specifying the purity (or fineness) of gold as a fraction of 24 parts. For example, 18 karat gold is 18 parts gold out of 24 parts or 75% gold. Other common karat readings are 10 karats (41.66 % gold), 14 karats (58.33 % gold) and 22 karats (91.67 % gold).

American manufacturers of gold products are required to stamp each gold item with their mark or insignia and the gold content "quality mark" usually expressed in karats. A dirty little secret is the gold purity can be off as much as one-half karat and still be legal. That is, a gold item marked as 18k can actually be 17 1/2k and still meet the letter of the law.

When you sell your scrap gold to a gold company accepting such items they, as well as the refiner they ship the items to, are aware of this leeway in the law. It is also assumed that many if not most American manufacturers of gold products take advantage of this leeway and your buyer will set their buy price accordingly.

If you have traded in your scrap gold for cash and what you received seemed a little low (based on the gold purity of the items you sold), this may be one reason why.

American Eagle Coins Update

2010-01-25T22:53:00.005-06:00

Well, it appears the webmaster for the U.S. Mint is back on duty. That is, new totals have been posted for both Gold American Eagles and Silver American Eagles.

As of today, January 25th, a total of 85,000 one-ounce Gold American Eagles have been produced. The numbers for fractional Gold Eagles are still showing a big fat zero so who knows when that program will start up again. If you remember, December of 2009 was the only month the fractional Gold Eagles were minted for the entire year and they were small numbers at that.

The big news is Silver American Eagles which are showing 3,592,500 produced so far in January. This is a huge number which shows the pent-up demand for the "poor man's gold". At this rate, the number of Silver Eagles minted in 2010 will far surpass 2009's total of 28,766,500.

If you are an investor of Silver American Eagles, I hope you are shopping around for the best price. It is surprising the difference in premiums being charged by various dealers, both large and small. Just be careful out there and make sure you get the most metal for your money.

Gold American Eagles - A Slow Start For 2010

2010-01-19T22:57:00.005-06:00

I have been checking the U.S. Mint's 2010 production numbers for Gold American Eagles (and Silver American Eagles also). New updates are scarce so the numbers below may be less than actual coins minted but it is all they have posted on their web site as of this date.

So far in January 2010 20,000 Gold American Eagles in the one-ounce size have been produced. None of the fractional Gold Eagles have been reported as being minted so far this year. Silver American Eagles for January are stated as 367,500.

After last year's late start on production of fractional Gold American Eagles, I would have thought there would be some production of them reported this late in January. Maybe they had a change of heart again and decided to just concentrate on the one-ounce size. Stay tuned for more U.S. Mint numbers as I get them.

Gold American Eagles - Year End Totals

2010-01-01T22:49:00.005-06:00

Now that 2010 is upon us, I want to share with you the total Gold American Eagles minted in 2009. You may remember from my previous posts that NO fractional Gold Eagles were minted until December of 2009 so these numbers are small compared to the one-ounce coins.

A total of 1,315,500 one-ounce Gold Eagles were minted in 2009. Of the half-ounce Eagles, a total of 110,000 were minted (in December of 2009). Likewise, a total of 110,000 quarter-ounce Eagles were minted in 2009 and 270,000 tenth-ounce Eagles were minted in 2009. That makes a total of 1,425,000 ounces of gold used for the U.S. Mints' Gold Eagle program.

Unofficially, the spot price of gold was at $1096.50 per ounce at the end of 2009 which is a gain of $222.90 over the previous year's close which represents a 25.52 percent increase. Gold's high for the year was on December 3rd when the price per ounce reached $1,226.10.

On a related note, the "poor man's gold" (silver) had a banner year. A total of 28,766,500 Silver American Eagles were minted in 2009.

2010 should be a very interesting year for the precious metals.

Gold American Eagles - More Restrictions

2009-12-10T23:58:00.004-06:00

In my last post, I discussed the good news of Gold American Eagle Fractional Gold Coins being available again. Well after a VERY short run, the U.S. Mint announced restrictions on availability of these and other U.S. gold coins.

After one day, the American Eagle Gold Tenth-Ounce Coin inventory was depleted and the other fractional eagles are in limited supply. Also production of the one-ounce Gold Eagles remain suspended until further notice (none have been produced in December as of yet).

The U.S. Mint also announced that sales of the popular American Buffalo one ounce gold coin have been suspended, with no new sales now planned until some time in 2010.

With this news, don't expect to see premiums (the amount charged over the spot price of gold) of these gold coins to go down anytime soon. Be sure to shop around to find the lowest premiums.

Gold American Eagle Fractional Coins Are Back

2009-12-06T21:46:00.003-06:00

The U. S. Mint is again producing Gold American Eagles in half-ounce, quarter-ounce and tenth-ounce sizes. These fractional coins (so named because they are smaller than one ounce) have not been produced since October of 2008 due to a lack of required planchets (blanks).

So far in December (the first month production started again), 56,000 half-ounce gold eagles, 58,000 quarter-ounce eagles and 260,000 tenth-ounce gold eagles have been produced. With these coins available again plus Friday's drop in the spot gold price, you may want to consider investing in a few of these gold coins.

Before you invest, make sure you know the current spot price of gold. I can't give you specific advice on how high of premiums you can expect but you must shop around since premiums can vary by quite a bit. And remember the smaller the coin, the greater the premium. In other words, two quarter-ounce gold coins will cost you more than one half-ounce gold coin.

Gold @ $1150 Per Troy Ounce

2009-11-18T20:27:00.004-06:00

Gold continues its impressive climb, today surpassing $1150 before dropping back a bit. Is investing in gold out of your reach at these prices? Don't forget the "Poor Man's Gold". I am talking about silver which is at $18.54 as I write this.

When someone mentions investing in silver, many people think of Silver American Eagles. The U.S. Mint has struck 25,006,500 year-to-date (as of yesterday) just to give you an idea how popular they are. Premiums over the spot price are up too. But don't forget pre-1965 U.S. Silver coins which are 90 percent silver.

Circulated U.S. silver dollars contain .7650 troy ounces of silver, half-dollars contain .3575 ounces of silver, quarters contain .1788 ounces of silver and dimes contain .0715 ounces of silver (14 dimes equal about one ounce of silver). This information should help you determine reasonable prices to pay for these coins when you know the current spot price of silver.

Gold Investing - Gold Closing In On $1100

2009-11-03T20:45:00.003-06:00

In case you missed the news, spot gold closed at $1084.50 today even with a strengthening U.S. dollar. There are many predictions on how high gold will be by year end but it looks like it will leave the 2008 year end spot price of $885.50 in the dust.

The interest in owning gold bullion coins is gathering strength too. The U.S. Mint reported a total of 115,500 American Gold Eagles were struck in October which bring the year-to-date total of gold eagles to 1,069,500. Silver eagles had impressive numbers too - 2,939,000 for October and 23,406,500 year-to-date.

I hope you are the proud owner of some of these gold and silver coins as the picture keeps looking better and better.

Happy investing.

It's Back! The American Gold Buffalo

2009-10-22T00:52:00.003-05:00

Starting tomorrow, October 22nd, the American Gold Buffalo will again be available for purchase. As you may know, production of this popular 24 karat gold coin was stopped late last year when the U. S. Mint couldn't keep up with the demand for U. S. gold coins.

The American Gold Buffalo is the first .9999 fine gold coin struck by the U. S. Mint beginning in 2006. They can be purchased from the Mint directly or from dealers who are making them available for their customers. Expect to pay a minimum 6% premium over the spot price of gold which could easily go up a few percentage points depending on demand.

If you invest in these beautiful gold coins, follow the advice I gave you in Basic Gold Investing about handling your coins. Gold is a soft metal and easily scratched or nicked so always handle your coins, especially pure gold coins, by the edges only.

Gold Price Reaches New High

2009-10-07T09:15:00.002-05:00

Have you heard? Gold posted a new high yesterday of $1045 per ounce then fell back just a bit. This took out the previous high set on March 17, 2008. This 18+ months of consolidation has added great strength to the next move up.

Some experts say look for a large spike up in the next three to six months. How high is uncertain but don't be surprised to see another 30 percent or more. If you have been waiting to invest, you may want to seriously consider this as the time.

Gold Investing and IRAs

2009-08-20T00:08:00.003-05:00

As you may know, it is possible to open a precious metals Individual Retirement Account (IRA) or invest in certain precious metals for an existing IRA. This idea is being promoted as a way to invest in precious metals with pre-tax dollars.

Although this sounds very attractive, you may want to read this Precious Metals IRA article before deciding to go this route. I don't necessarily agree with his views but it makes for an interesting read and he does bring up some valid points on why you may (or may not) want to pursue a precious metals IRA.

Happy Investing.

$20 Liberty Types 1, 2, 3

2009-08-08T23:24:00.003-05:00

If you feel you have a firm investment foundation in gold bullion coins, you may have been looking at $20 Liberty Head Gold Double Eagles for a possible investment. If so, you should become familiar with the three types of $20 Libertys.

Type 1 $20 Libertys were minted from 1849 to 1866 and are referred to as "no motto" Liberties since they do not contain the motto "IN GOD WE TRUST". They tend to fetch a higher price than the Type 2s and Type 3s except in the higher grades.

Type 2 Libertys were minted from 1866 to 1876, contain the motto "IN GOD WE TRUST" and, like the Type 1, the bottom of the reverse side of the coin has "TWENTY D." stamped into it. Type 2 Libertys are worth a little less than Type 1s until Mint State 63 (MS63) at which point they become much more valuable than either Type 1s or Type 3s. In fact, at present prices the MS65 Type 2 Liberty is worth approximately 14 times more than the Type 1 and (approximately) 30 times more than the Type 3.

Type 3 Libertys were minted from 1877 to 1907, contain the motto "IN GOD WE TRUST" and the bottom of the reverse side has "TWENTY DOLLARS" stamped into it. Type 3 Libertys are consistently lower in price than the Type 1 and Type 2 Libertys.

Happy Investing.

Gold Investing - The Case for Semi-Numismatic Coins

2009-08-01T13:05:00.003-05:00

If you are a casual gold investor, you have probably concentrated on gold bullion coins. As a result, your potential profit is limited to the price increase in gold with no other factors involved.

Once you have a nice amount of gold bullion in your possession, you may want to look at semi-numismatic gold coins. Why? Because it gives you the opportunity to profit from the rising price of gold as well as the demand for the types of coins you happen to invest in. The two coins you might want to consider are the $20 Liberty (1850-1907) and the $20 St. Gau dens (1907-1933).

There is so much history wrapped up in these two coins, you will be pleased with owning them even if you only have one of each. They have stood the test of time and are recognized world-wide as having value and good investor demand.

But you don't have to spend a fortune on them IF you stays with the lower grades of uncirculated coins (MS60-MS62) or the circulated grades of XF or AU. Just make sure you are dealing with a reputable local or national dealer. And you may want to investigate certified coins by either NGC or PCGS.

Happy Investing.

Gold Investing - Other Gold Markings

2009-07-22T22:39:00.005-05:00

In my article on Gold Weights and Measures, I mention the Karatage system for determining the purity of a gold item such as jewelry. If an item is marked 24K, it is pure gold. If you see 12K, it is 50 % gold mixed with some other metal(s).

If you have gone through your items that may contain gold, you may have seen other markings that are not as well known. Let me explain a few of the more common ones you may see.

R. G. P. - These initials stand for Rolled Gold Plate

H. G. E. - This means Heavy Gold Electroplated

G. F. - Means Gold Filled

Unfortunately, items containing these markings contain very little gold as they indicate a thin sheet of gold covering some sort of cheap metal. You would be lucky to find a dealer interested in these types of items. If you are thinking of purchasing an item with one of the above markings, be aware of the tiny amount of gold they actually contain.

Happy investing.

Investing In Gold Bars (and Ingots)

2009-07-12T21:22:00.003-05:00

Gold investors in the U.S. tend to favor gold coins over gold bars and ingots which differs from gold investors in other parts of the world. Gold bars are highly prized elsewhere as an investment and maybe you want to look at a modest investment in them.

Gold bars come in various sizes to fit most any investing budget. The smallest size is just one gram followed by 2.5 grams, 5 grams, 10 grams, 20 grams, 31.103 grams (1 Troy ounce), 50 grams and 100 grams. Gold bars have a hallmark stamped on them which states the producer, size and purity of the gold bar - typically 999.9 fine gold.

If you are looking for a variety in your gold investments, gold bars may be right for you.

Happy investing.

Gold Coins and Bag Marks

2009-07-01T23:25:00.003-05:00

You would think that gold coins that have never been in circulation would have no marks on them. It is true they wouldn't have wear marks like circulated coins do. But, unless they have received special handling at the mint, there is a good chance they will have bag marks otherwise known as contact marks.

So just what are bag marks? They are marks mainly caused by the coins being dropped in sacks (along with several other coins) at the mint and the handling of these bags as they transported to one or more destinations. The coins coming into contact with other coins can cause minor nicks or other flaws that mar the surface of the coin. Large gold coins are especially prone to bag marks since gold is such a soft metal.

There are several grades of uncirculated coins. An MS-70 coin (a perfect coin) would have no bag marks - probably due to special handling of the coin. Any grade below that would have some sort of flaw with the lowest uncirculated grade of MS-60 having the most serious of the bag marks.

Happy investing.

Proof Gold Coins

2009-06-23T23:08:00.002-05:00

You have probably heard the term "Proof" when used to describe gold and silver coins. In case you are not sure what that means, I want to shed a little light on what a proof coin is and why they are priced higher than similar non-proof coins.

First of all, let me tell you what the term proof is not. Proof is not considered as a coin grade like Mint State grades (MS-65, MS-63, etc.) or circulated grades such as AU, EF, VF and VG. It is used to refer to a method of manufacture. A proof coin stands out from regular coins because of its mirror-like finish. This look is accomplished by the use of special polished dies and planchets (the coin disk upon which the die imprints the design).

Proof gold coins make a nice addition to a gold investor's holdings once a number of regular gold bullion coins have been purchased.

Happy investing.

Gold Vending Machines

2009-06-17T23:07:00.004-05:00

A German company is starting to introduce Gold Vending Machines in that country's airports, railway stations and shopping malls. These "Gold-To-Go" ATMs will be capable of dispensing 1-gram, 5-gram and 10 gram gold bars (there are approximately 31.103 grams in an ounce of gold) as well as gold Krugerrand coins.

They must be convinced that this "bringing the gold to the people" strategy will be a success as the company is planning to roll out 500 gold ATMs in Germany, Austria and Switzerland. It will be interesting to see if this works as the premium over spot gold they are charging for the 1-gram bar is reported to be 30 percent - ouch!

When you invest in gold, make sure you shop around to get the lowest premium possible (and it better not be anywhere near 30 percent).

Happy investing.

Counterfeit Gold Coins

2009-06-11T20:34:00.003-05:00

At a recent major coin show in Long Beach, leading coin grading companies met to discuss the increase in counterfeit coins they are seeing in the marketplace. There are a few things you may want to know about counterfeit coins and how to protect yourself if you are investing in gold coins.

First of all, spotting counterfeit gold coins is not for amateurs. And it is doubtful if everyone calling himself or herself a professional coin dealer can spot every counterfeit coin (such as a gold-plated lead coin) they may come across. If you are investing in gold coins, especially the higher grades of numismatic and semi-numismatic coins, look for those that have been graded and slabbed by NGC or PCGS. Not only are they the best at spotting counterfeit coins, they guarantee their work.

Counterfeit gold coins don't look like their genuine counterparts. If you know what "real" Gold American Eagles, Canadian Maple Leafs, Krugerrands, etc. look like, you may be able to spot a counterfeit.

A great tool in spotting counterfeit coins is a scale that displays a coin's weight in grams or pennyweights. While a brass coin can look like the real thing, it won't pass the test on weight. Genuine coins will weigh in at their stated weight or very close to it. You can find out the weights of various coins at Fractional Gold Coins plus more pages on the Gold Investing Simplified site.

Another way to spot counterfeit gold coins is to inspect them with a magnifying glass or jeweler's loupe. Since gold is such a soft metal, the stamping machines in use at the various mints will produce sharp images on the coin. Counterfeit coins that are cast from a die will not have that crisp image and are a dead giveaway that a coin is fake.

I hope you found this discussion on counterfeit gold coins of value and, if investing in higher grades of gold coins, follow my advice on limiting your investments to NGC and PCGS graded and slabbed coins.

Happy investing.

Spot Gold - Know Before You Invest

2009-06-05T23:32:00.004-05:00

One of the "tricks" unethical coin dealers use to increase their profits is to misquote the spot price of gold and silver. They may advertise low premiums on the coins they sell but after adding a little to the spot price, the premiums are higher than those of the honest coin dealers.

This may not be a big deal if you are only buying a coin or two. But if you are investing in a bag of silver (715 ounces) or several one-ounce gold coins, the amount you are overcharged could be significant. Your goal is to get as much gold (or silver) as you can with the money you have to invest.

The solution? Find out what the spot prices of gold and silver are just before you visit your local coin dealer or call that major dealer or shop online. You can do this on my Gold Investing Simplified home page or other online sources. But make sure you take this step before you invest.

Remember, information is power and when it comes to saving you money, it is power indeed.

Happy investing.

Gold Moving Toward $1000 Again

2009-05-31T23:11:00.003-05:00

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

2009-05-27T00:07:00.005-05:00

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

2009-05-21T00:10:00.003-05:00

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

2009-05-15T21:49:00.006-05:00

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!