Gyroscopic Investing

I have been looking at the prices of physical gold here in Europe but I can not decide what kind of gold to buy.

The 1oz Philharmonics seems like a good candidate with a low price premium of 5,37% and a spread of 3,89%
The 1oz Eagle however seems very popular on the Internet but has a price premium of 6,45% and a spread of 4,20%

I am also considering 100g Gold bars because of the very low price premium of 2,53% and the very low spread of 2,93%
A little bit big and indivisible though, very hard to rebalance if I only got one in my possession instead of 3 coins.

Any advice would be greatly appreciated.

lordmetroid wrote: I have been looking at the prices of physical gold here in Europe but I can not decide what kind of gold to buy.

The 1oz Philharmonics seems like a good candidate with a low price premium of 5,37% and a spread of 3,89%
The 1oz Eagle however seems very popular on the Internet but has a price premium of 6,45% and a spread of 4,20%

I am also considering 100g Gold bars because of the very low price premium of 2,53% and the very low spread of 2,93%
A little bit big and indivisible though, very hard to rebalance if I only got one in my possession instead of 3 coins.

Any advice would be greatly appreciated.

If you are in Europe, buy the Philharmonics.  If you are in the US, buy the Eagles.  They are both beautiful coins. Coin dealers are more accepting of "local" coins.  It is a human emotion.

Bars can be a problem because it is easier to counterfeit bars than coins.  So... in general, for less than massive amounts of gold, coins are more fungible.  If you are talking big dollars, then yes, bars are the way to go.

Mark

Even if you concentrate your gold coin holdings in one particular type (e.g., Eagle), you might consider sprinkling in a few other standard coins (esp. Krugerrand, Philharmonic, Maple Leaf) for purely aesthetic reasons.

One of the benefits of having physical gold coins is being able to take them out once in a while to hold in your hands and admire. (They're beautiful objects!) Having a few different types of coins makes the collection more interesting to look at.

Those philharmonics sure are gorgeous. They're so big and hefty! I can imagine myself a late medieval merchant about to make a big trade when I hold one.

Honestly, as long as you stick to beautiful, well-known coins, you probably can't go wrong. Buy whatever you find prettiest that is widely accepted where you live and internationally. Eagles, Krugs, Maple Leafs, Philharmonics, Sovereigns in Europe, etc. I don't know about the Chinese Pandas but they're very pretty as well.

We all love to take our coins out and fondle them (at least I did before the horrible boating accident

I would stick with the major coins - in the one troy ounce size if you can afford them (or save up to buy them):
  - Eagles and Maple leafs are most widely accepted in the US (US mint Buffalos too).  Eagles sell at a slight premium, but you can often get it back when selling
  - Philharmonics, Kruggerands are what I would buy as well - they are recognized worldwide
  - I do love the look/feel of the Philharmonics - even though they are pure gold (and somewhat more fragile than Eagles which are alloyed)

Stay away from numismatic (collector) coins such as the double Eagles and others unless you are a coin collector who knows what you are doing.

I personally don't buy bars or private mint, only because they are not as easily sold/converted.  If I were going to purchase these I would only buy name mints such as Englehard or Credit Swiss mint.

mortalpawn wrote: We all love to take our coins out and fondle them (at least I did before the horrible boating accident

Have't ordered any yet but I must say I got an urge to play with the coins once they arrive. Hold them, look at them and then make a  "pile". Can the gold withstand such a treatment or is it a Bad idea?

I think there might be a tactical advantage to sticking with one type of coin for the most part. When you buy coins, you get a receipt. When you sell them to rebalance (or otherwise), it's important to be able to show what price you bought them for, no? Prices vary. Receipts are pretty general (five Eagles at $1200, etc.). A $1200 coin sold at $1800 has less of a gain than a $600 coin sold at $1800. Just sayin'.

lordmetroid wrote:

mortalpawn wrote: We all love to take our coins out and fondle them (at least I did before the horrible boating accident

Have't ordered any yet but I must say I got an urge to play with the coins once they arrive. Hold them, look at them and then make a  "pile". Can the gold withstand such a treatment or is it a Bad idea?

It depends. Eagles are harder due to their alloy, so they aren't as easily damaged; just don't overdo it like Unca Scrooge's money silo.

OTOH, I got beaten down by $10 or so on some Maples due to their being scratched up. I didn't do it, I swear! They were like that when I bought them... but I still lost out.

Krugerrands.

Eagles (for local recognition) and Sovereigns (for global recognition and fractional gold) here

My initial plan was to get Eagles because of the local recognition and wear endurance. However, after some more thought, wouldn't it be better to get Maple Leaves as they are slightly cheaper and hence get more of an investment for once hard earned money?

Consensus is that you may make the premium up when you sell. This will be especially obvious if you buy a coin with a higher premium when its value is low and then sell it when it's worth more; the premium will be a higher dollar amount on the sell side than you previously paid on the buy side.

But honestly we're just talking about a few dollars here. Buy whatever you like. Krugs may be a good compromise; they're durable as Eagles, but have a relatively low premium like Maples. And they're internationally recognized, too, so that's nice.

I saw today that the sale of gold eagles was down 39% this year.

Reub wrote: I saw today that the sale of gold eagles was down 39% this year.

Was that Gold Eagles in particular, or just gold bullion coins in general?

If Gold Eagles' trading volume has dropped by more than that of other gold coins, have you seen any theories regarding why?

barrett wrote: I think there might be a tactical advantage to sticking with one type of coin for the most part. When you buy coins, you get a receipt. When you sell them to rebalance (or otherwise), it's important to be able to show what price you bought them for, no? Prices vary. Receipts are pretty general (five Eagles at $1200, etc.). A $1200 coin sold at $1800 has less of a gain than a $600 coin sold at $1800. Just sayin'.

I am sure that thought has never occurred to anyone on this forum :-)

I thought for sure you would mention the "fondle factor"!  Good reason to go for alloyed coins designed to withstand routine use.  I'd be terrified of scratching a gold bar or a pure gold coin, and instantly dropping its value by a not-insignificant amount.  Thus, Eagles would be a better choice than Buffaloes.  The higher premium on the Eagles gets returned to you when you sell - the only transaction costs to be concerned with are the buy/sell spread, and the costs of getting a registered mail package from Joe the Plumber.

In Sweden it is the average price of all purchases in an asset that is the underlying basis for taxation.

I recommend buying one ounce Krugerrands or one ounce Eagles.

So, for a USA investor, which form of gold has the tightest bid - ask spread? With which form factor am I going to recover the greatest amount of value when I finally sell? For me, fondle factor is irrelevant, because it will be in segregated storage hundreds of miles away from me.

I'm definitely going to get some coins, 1 oz. American Gold Eagles, but then I was thinking maybe some bars, PAMP Suisse seems to be a quite common brand. Any ideas?

ochotona wrote: So, for a USA investor, which form of gold has the tightest bid - ask spread? With which form factor am I going to recover the greatest amount of value when I finally sell? For me, fondle factor is irrelevant, because it will be in segregated storage hundreds of miles away from me.

I'm definitely going to get some coins, 1 oz. American Gold Eagles, but then I was thinking maybe some bars, PAMP Suisse seems to be a quite common brand. Any ideas?

For spread, 1 Kilo Swiss bars are the way to go.  (About 1%)
If $40.000 is too much granularity, just buy the most popular 1 once coin in your country. Eagles in the USA. (~4% spread)