Eagle vs Buffalo

[foglifter]

I'm about to start adding physical gold into my PP. I did look through the Gold FAQ and some old posts and still got some questions to ask.

1. Do I have to care about the type (Buffalos, Eagles, Krugerrands, Maple Leafs, ...) and year?

2. I found this article about the Eagle and Buffalo coins: American Gold Eagle vs. American Gold Buffalo.

If I understood correctly, both Gold Eagle and Gold Buffalo contain 1 oz of gold and the only difference is copper added to the Eagle to prevent wear. Fine gold in 24-karat Buffalo does not need to be alloyed, therefore the Buffalo is cheaper to produce. But why then Buffalo is more expensive than Eagle?

[Greg]

I'm about to start adding physical gold into my PP. I did look through the Gold FAQ and some old posts and still got some questions to ask.

1. Do I have to care about the type (Buffalos, Eagles, Krugerrands, Maple Leafs, ...) and year?

I wouldn't think year would matter. There is a higher premium on the current year but if you're intending on holding onto the gold for longer than a year, I would think if you sold a 2006 eagle you'd get the same price as if you sold a 2005 eagle to them.

As for type, I think it can be a lot for personal preference of the beauty of each of them as well as maybe to diversify a bit in case supply and demand issues raise one coin over another. If you purchase across a range you capture more of that. Others on this forum probably know far more though regarding tax implications of holding one form over the other. There's also stuff I've read regarding the face values of the coins and if you want to leave the country and how you report how much "money" you are bringing with you. Again, others here probably know more about this but this is perhaps enough to wet your whistle.

2. I found this article about the Eagle and Buffalo coins: American Gold Eagle vs. American Gold Buffalo.

If I understood correctly, both Gold Eagle and Gold Buffalo contain 1 oz of gold and the only difference is copper added to the Eagle to prevent wear. Fine gold in 24-karat Buffalo does not need to be alloyed, therefore the Buffalo is cheaper to produce. But why then Buffalo is more expensive than Eagle?

I'd check out different dealers. At apmex they are the roughly the same price as of now at least. At goldmart.com the price is higher on the eagle versus the buffalo. I can understand this at least because the eagle has not only the 1 ounce of gold in it but also has a bit of silver and copper which also are worth something. I'd also say that since 24k is so much softer that if you worry about scratching the gold to perhaps just stick with 22k gold such as the eagle or the krugerrand.

[foglifter]

Hmmm, I just checked APMEX and the Buffalo's price is higher:

2012 1 oz Gold American Eagle          $1,633.20 $1,670.19
1 oz Gold American Eagle Random Year $1,629.20 $1,665.19
2012 1 oz Gold Buffalo                         $1,633.20 $1,675.19

Same thing happens if I look at AJPM, golddealer.com. But Colorado Gold sells both at the same price. Probably it's just a matter of popularity. And the price difference is negligible.

[Greg]

Hmmm, I just checked APMEX and the Buffalo's price is higher:

2012 1 oz Gold American Eagle            $1,633.20 $1,670.19
1 oz Gold American Eagle Random Year $1,629.20 $1,665.19
2012 1 oz Gold Buffalo                         $1,633.20 $1,675.19

Same thing happens if I look at AJPM, golddealer.com. But Colorado Gold sells both at the same price. Probably it's just a matter of popularity. And the price difference is negligible.

Hmm perhaps we were looking at two different sources? Here were the two I was looking at. For the prices of purchasing 20+ coins with cash/personal check they are around $1665 right now.

http://www.apmex.com/Product/1/1_oz_Gol ... _Year.aspx
http://www.apmex.com/Product/39598/1_oz ... _Year.aspx

Regardless, I would think the best bet would be shopping around for the lowest premiums over spot and if you wanted both coins and one had a lower premium over spot somewhere else, buy from different dealers.

I'm in the process of getting gold shipped to me from goldmart.com as of now. I liked their low premiums and they were very pleasant and informative by calling their help line. We'll see how long it takes for me to get stuff from them however.