I just talked with a coin dealer I know very well, who said two things of interest. One, he expects gold to go to at least $400 per oz. in the next few weeks. Two, the premium (the price a buyer pays over the actual one oz. spot price for gold when you buy it in coin form) on U.S. Gold Eagles has just gone up due to intense demand.

If you live in the U.S. and you're buying gold for Y2K security, Gold Eagles are the best way to go because they're U.S. coins and will have greater legitimacy among the American public than a Canadian Maple Leaf or a South African Kruger Rand (though they have the same gold value) and they may be more acceptable.

The conclusion is: if you're thinking about buying gold coins for Y2K, the time to do it is right now. Not tomorrow, not next week.

-- cody varian (cody@y2ksurvive.com), October 04, 1999

Answers

You know, even being able to figure out that this was going to happen, it's still hard to believe your eyes when you see price movements like this.

I purchased a couple of weeks ago when the spot was at 265, and about four months ago when the spot was at 280.

Damn glad it worked out so far. I just hope it doesn't go above $400 for the sake of most people who don't have their gold yet.

-- nothere nothere (notherethere@hotmail.com), October 04, 1999.

Cody,

Do you have any numbers on this? Previously, the premium on the 1 oz Eagles was about 10% and rose as the coin size dropped, with a premium on the 1/10 oz at about 30%. Has this changed dramatically yet?

-- Gordon (gpconnolly@aol.com), October 04, 1999.

Gordon: My information is that the premiums on the different denominations of Eagles haven't changed in relation to each other, but the overall premium on Eagles is higher due to a severely shrinking supply of them. This increase is probably not the same at different coin dealers. The point is that the demand for Gold Eagles is intense right now and it's drying up the supply, so the time to buy is RIGHT NOW!

-- cody (cody@y2ksurvive.com), October 04, 1999.

Nothere,

The problem, as I see it, will not be the price of gold, but the availability of the coins, at any price. The US Mint was never positioned for a large demand. They are running the production of gold coins at maximum right now, and can't do much to increase it in the months ahead. This was never more than a niche market for them. As demand increases, which it did even a few months ago, they just can't supply the coins in volume. Thus, you will find that whatever few coins make it to the various dealers will be rationed to their best customers, at a probable high premium. Supply and demand will dictate, as always. Last year, supply was greater than demand, but that has now reversed itself.

-- Gordon (gpconnolly@aol.com), October 04, 1999.

Cody and Gordon.... so why not by Maple leafs or Krugerands instead? My understanding is the premium is due to the American Eagle production limits. It's all 1 oz gold

-- kevin (innxxs@yahoo.com), October 04, 1999.

Cody,

You are right. The larger, busier dealers will have trouble getting enough coins and will increase their premiums, as I would too. Smaller, out of the way dealers, who still have some coins will probably maintain a lower premium. One large dealer that I have followed on the East Coast ran a lot of "specials" in Gold Eagles last year when demand was pretty low. Now, they don't even advertise the Gold Eagle coins in their monthly bulletins. I expect that they can't keep up with demand as is, and there is no point in spending print money on something that they get dozens of calls on a day anyway.

-- Gordon (gpconnolly@aol.com), October 04, 1999.

I agree Kevin to me gold is gold. I understand cody's argument that Americans will receive eagles more willingly but if tshtf I imagine that ALL gold will be received. If tshtf I think people will get educated real quick on all gold regardless of country or size. That British sterling I think its a good one too.

Go Gold!!

Go DROOY!!

Go MAX!!

-- David Lee Roth (Diver Down@Van Halen.ou812), October 04, 1999.

Kevin,

If you are buying the bullion coins in order to resell them later at a big profit, it won't make any difference which ones you choose, as long as they are recognized official coins of some country, with the weight of gold stamped on them. If you are buying them to hold for possible use as money in 2000-2001 or beyond, then the local unit will probably be more easy to use. Gold Eagles in the US, Maple Leafs in Canada, etc. This would be your first choice if you can find the coins. The difference in premiums between coins of different countries is not the important factor, for that is never very much. They are all sold based on the spot price of gold plus a premium.

-- Gordon (gpconnolly@aol.com), October 04, 1999.

Kevin: There is no difference in the gold content of a Maple Leaf or a Krugerand than in a Gold Eagle. The difference is, in a worst case (or thereabouts) Y2K scenario, it may be easier to use U.S. coins in dealing with people who are totally unaccustomed to using real gold money, at least in the beginning. Gold Eagles offer slightly more security than Maple Leafs (Leaves?) or K-rands as a Y2K insurance purchase. If you're just looking to increase your assets in gold and you're not expecting a really nasty Y2K crisis, then you should buy ML's or K-rands.

-- cody (cody@y2ksurvive.com), October 04, 1999.

At AJPM where I buy the premium on Oct 4 at 11:00 EDT is 6.67 percent on 1 oz eagles, and 12.06 percent on 0.1 oz eagles. These premiums are just about where they were when I began buying heavily just after the first BOE sale. AJPM is the only place that I know where their prices are posted on their web site.

http://www.ajpm.com/htbin/gold.cgi

dave

-- dave (wootendave@hotmail.com), October 04, 1999.

I have dealt with Southern Coin and Precious Metals. They also list their premiums on purchase, as an addition to spot price. I have dealt with Brian, and find he is very reasonable. SCPM can be found at www.scpm.com

Southside Ed

-- Southside Ed (Still@home.fornow), October 04, 1999.

The premium on AGE (american gold eagles) is up $8 over the premium of the other coins. I have followed AJPM's prices, as I buy from them a lot. When the spot price shot up recently, the premium on AGE also increased over the premium of maple leafs.

Currently 1oz. AGE is selling for $339 and 1oz. maple sells for $332. The price for all these bullion coins have been identical for the past several months. Now the AGE costs $7 more.

-- Michael Criggs (mcriggs@ucalgary.ab.ca), October 04, 1999.