Worth waiting for premiums to drop?

Discussion of the Gold portion of the Permanent Portfolio

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DragonJoey3
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Worth waiting for premiums to drop?

Post by DragonJoey3 » Fri Apr 24, 2020 11:53 am

Hey All,

So I'm looking to add more gold as I'm still in the accumulation phase, and the premiums on gold coins at this point are quite high. I'm seeing around $150/coin or nearly 9% or so. Usually I am only paying around $50 or $60 over spot per coin. Given that an ETF can give me exposure to Gold at "near spot" but with a tracking error and ER, should I just buy an ETF and wait for the mints to open again before buying coins?

I would like to have much more physical bullion in the future for events like this one where the price of the coins diverging from the spot is actually beneficial, but as I'm trying to buy coins it's rather frustrating to see the premiums jump so high :( .

DragonJoey3
pmward
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Re: Worth waiting for premiums to drop?

Post by pmward » Fri Apr 24, 2020 2:32 pm

I wouldn't pay that ridiculous ripoff premium today.
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ochotona
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Re: Worth waiting for premiums to drop?

Post by ochotona » Fri Apr 24, 2020 3:40 pm

pmward wrote:
Fri Apr 24, 2020 2:32 pm
I wouldn't pay that ridiculous ripoff premium today.
I am reminded of "gun scares" when Obama was Prez. People would panic and buy guns, ammo, reloading components. They became expensive and hard to find. When Trump got elected, the gun industry wrecked. The local ammo / reloading shop down the road went out of business, Eventually, the same thing will happen with coins. Though we are in an emergency, hard to say when. When people are broke and don't have cash to buy coins any longer?
Libertarian666
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Re: Worth waiting for premiums to drop?

Post by Libertarian666 » Fri Apr 24, 2020 3:51 pm

DragonJoey3 wrote:
Fri Apr 24, 2020 11:53 am
Hey All,

So I'm looking to add more gold as I'm still in the accumulation phase, and the premiums on gold coins at this point are quite high. I'm seeing around $150/coin or nearly 9% or so. Usually I am only paying around $50 or $60 over spot per coin. Given that an ETF can give me exposure to Gold at "near spot" but with a tracking error and ER, should I just buy an ETF and wait for the mints to open again before buying coins?

I would like to have much more physical bullion in the future for events like this one where the price of the coins diverging from the spot is actually beneficial, but as I'm trying to buy coins it's rather frustrating to see the premiums jump so high :( .

DragonJoey3
Actually it's not just that the premiums are high. The spreads are way out of normal territory too. So it really wouldn't help to have coins unless you are selling to another individual and can split the difference in the spread.
pmward
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Re: Worth waiting for premiums to drop?

Post by pmward » Fri Apr 24, 2020 3:57 pm

ochotona wrote:
Fri Apr 24, 2020 3:40 pm
pmward wrote:
Fri Apr 24, 2020 2:32 pm
I wouldn't pay that ridiculous ripoff premium today.
I am reminded of "gun scares" when Obama was Prez. People would panic and buy guns, ammo, reloading components. They became expensive and hard to find. When Trump got elected, the gun industry wrecked. The local ammo / reloading shop down the road went out of business, Eventually, the same thing will happen with coins. Though we are in an emergency, hard to say when. When people are broke and don't have cash to buy coins any longer?
Yep. Coin dealers are going to charge whatever people are willing to pay. The prices they charge are not the true price of gold. It is gold + greed tax. There is no excuse for a 10% "premium" when someone can buy an ETF for a very small ER. The amount of years holding it would take to make the ETF ER become greater than a 10% "premium" are not worth it, imo. I think that gold dealers are an industry that is prime for disruption, imo.
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