Saturday, June 15th, 2019 MST

What not to buy

Sometimes it is just as important to know what NOT TO BUY as it is to know what to buy.  High premium coins promoted by telemarketers fall into the category of what not to buy.

Before me is a competitor’s a piece of literature that promotes “Roman Number Gold,” that is, American Gold Eagles dated 1986-1991, which were dated in Roman numerals, not Arabic.  Specifically, the promo piece recommends proof GEs with those dates.

Proof GEs have long been promoted by telemarketers, along with old US gold coins, such as $20 Liberty Heads and St. Gaudens.  I can’t recall anyone ever telling me how much money they made by buying proof GEs.  The sellers make a lot of money, but the buyers do not.

The piece notes that a 1907 Ultra-High Relief $20 proof Saint Gaudens coin graded PF-69 sold for $1,450,000 and later for $2,990.000.  It also notes that another 1907 St. Gaudens sold for $2.1 million in 2015. Then they rationalize that proof Gold Eagles dated 1986-1991 – because they are dated in Roman numerals – should be bought.

The piece makes other baseless arguments, such as “Historic trends indicate that proof coins can be worth 30 times more than MS-60 coins.  The long-term performance of these coins could make them worth more than $25,000 each.”

There may be proof coins selling at 30 times BU Gold Eagle prices, but to suggest that such a potential lies in buying 1986-1991 proof GEs just because they are dated using Roman numbers borders on fraud.

Buying gold at these levels, considering what’s going on in the fiscal world — a $1.2 trillion federal deficit this year, the national debt topping $22 trillion, household debt at record levels, a trade war looming, etc., etc., — makes sense.  However, buying high-margin gold coins (and silver coins) does not make sense.

For decades, old US gold coins carried 20% – 30% premiums.  Many dealers often recommended old US gold coins.  I never did, and I have been proven right.  In 2017 and 2018, old US gold coins sold at or near bullion coin prices relative to spot.  Investors who bought them suffered losses of those premiums.

For protection against the many potential calamities, buy bullion products, such as Gold Eagles and Krugerrands.  If you prefer silver, pre-’65 90% silver coins are among the lowest premium silver items available.  For some unique gold products with really low premiums, see our Gold Specials Page.  For silver items, see our Silver Specials Page.

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