Old US gold coins should be gold investors first choices because they now sell at premiums comparable to 1-oz American Gold Eagles. Historically, old US gold coins have carried huge premiums, sometimes as high as 40%. Now, they’re selling at 4% to 6% premiums over the value of their gold content.
As this precious metals bull market becomes more evident, I predict that premiums will again rise on old US gold coins, meaning that investors stand to profit two ways: from higher gold prices and from increased premiums.
Buying low premiums coins that have the potential to pick up premiums is a little-known way of maximizing profits while investing in gold coins. It can be very profitable.
For example, in 1996 Australia’s Perth Mint introduced its first Lunar Series gold coins, which coincided with the twelve-year Chinese Lunar calendar 1996-2007. At times, many of the twelve coins later attained premiums, but the year 2000 Dragon especially.
Within a few years of the close of production of the Gold Dragons, investors could trade them for Krugerrands or Gold Eagles and, at the height of the premium, increase their gold holding by 50%. Of the 30,000 1-oz Gold Dragons that the Perth Mint turned out, CMI Gold & Silver sold more than 10,000. We had a lot of happy clients with our recommendation that they buy Gold Dragons instead of Gold Eagles or Krugerrands.
I am confident that going with old US gold coins at this time will be profitable over the next few years. For most of the years since the 1980s, when telemarketers started promoting old US gold coins, they have held sizable premiums. Premiums are low today only because the precious metals market has suffered a downturn since 2011-2012.
Overlooked is that since January 2016, gold prices are up 22%. But, because prices still are off their 2011-2012 highs, gold and silver do not get much investor interest. As I’ve noted in earlier blog posts, the time to buy gold is when it is being ignored by the establishment. No Wall Street firm recommends gold.
Yet, the bull market in gold and silver will continue because of all the uncertainty in the world and because of rising rates of inflation. If you’re buying gold today, go with old US gold coins. The most popular old US gold coins are the $20 Libertys and the $20 Saint Gaudens. Check our Gold Specials Page for still more low premium bullion gold coins.
For another post on this recommendation, see Time to Buy Old US Gold Coins.
