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Economics Summaries
Investing

Gold Coins As Investment
Comparison Summary

This page compares the three main 1 ounce gold coins that are used as bullion, and discusses how to buy gold coins as an investment. These include the South African Krugerrand, the Canadian Maple Leaf, and the US American Eagle.

30

390 - 450

30

Gold Coins - The Top Three Bullion Coins

South African

Krugerrand

Canadian

Maple leaf

United States

American Eagle

South African Krugerrand Gold Coin
Canadian Maple Leaf Gold Coin
American Eagle Gold Coin

Physical Desc.

Introduced 1967
Introduced 1979
Introduced 1986

Gold Purity

0.9167 (92%)

0.9999 (99.9%)

0.9167 (92%)

Alloy

0.0833 Copper (8%)

none (scratches easily)

0.0533 Copper (5%)
0.0300 Silver (3%)

Carat Value

22

24

22

Diameter

32.77 mm

30 mm

32.70 mm

Thickness

2.84 mm

2.87 mm

2.87 mm

Weight of Gold

31.103 grams (1 oz. troy)

31.103 grams (1 oz. troy)

31.103 grams (1 oz. troy)

Total Weight

33.93 grams (gold plus alloy)

31.1 grams (pure gold)

33.931 grams (gold plus alloy)

Color

Reddish, due to copper alloy

Pure gold color

Lighter, due to alloy

Design Description

-

-

Obverse

Paul Kruger bust

Queen Elizabeth II bust

Lady Liberty Standing

Reverse

Springbok Antelope

Maple Leaf

Male Bald Eagle

Language

English and Afrikans

English and French

English

Date

Back

Front

Front

Value Description

-

-

Face Value

none given

$ 50 (actual value much higher)

$ 50 (actual value much higher)

Spread

$ 98 (5.6 %)

$ 106 (6.2 %)

$ 138 (8.0 %)

Dealer SELL Price

$ 1,769

$ 1,773

$ 1,789

Markup

$ 49 (2.0 %)

$ 53 (3.1 %)

$69 (4.0 %)

SPOT Price of Gold

$1,720

$1,720

$ 1,720

Markdown

$ 49 (2.0 %)

$ 53 (3.1 %)

$69 (4.0 %)

Dealer BUY Price

$ 1,671

$ 1,667

$ 1,651

Typical Premium

0

+ $5 over Krugerrand

+ $15 over Krugerrand

Other Denominations

1/2 oz., 1/4 oz., 1/10 oz.

1/2 oz., 1/4 oz., 1/10 oz., 1/20 oz.

1/2 oz., 1/4 oz., 1/10 oz.

South African
Krugerrand
Canadian
Maple leaf
United States
American Eagle

148

200 - 768

10

200

10

200



Some Recent Gold Coin Prices
Date
Coin
Market
Spot
Price
Dealer
Markup
Dealer
Sell Price
Dealer Commission
Oct. 19, 2012
Kitco.com

American Eagle

$ 1,720
$69
$ 1,789

4.0 %

Maple Leaf

$ 1,720
$53
$1,773

3.1 %

Krugerrand

$ 1,720
$49
$1,769

2.8 %

100

150 - 550

75

75

75

75



Gold Coin BUYING Advice

Buying Gold Bullion Coins for Investment
A primary consideration is to assure that you don't pay any sales tax. Current sales tax in Santa Cruz County, CA is 9.5%. California sales tax is the highest in the nation, no matter which county you live in. You may have to visit a nearby state, to avoid paying sales tax. In California, your purchase is exempt from sales tax, as long as the purchase is over $1,500. To avoid required transaction reporting, keep your daily purchase under $3,000. In my area, with current gold pricing around $1,720 per ounce, your ideal daily purchase would be ONE coin (no tax, private transaction).

The Spread
What is the difference between your dealer's buy price and sell price? With spot gold at $1,720, I find it about $69 - they will buy at $1,651, and sell at $1,789. This equates to about a 4.0% fee per transaction, or markup=$69.

Storing Coins
Be sure to keep your coins in a secure safe. Simply hiding them is a bad idea. Always keep Canadian Maple Leafs in a protective plastic pouch, since they are marked VERY easily (pure gold is very soft).

Do NOT store your gold in a bank "Safety Deposit Box." When the inevitable debt meltdown occurs, you won't be able to access your "Safety Deposit Box." The government will seal them all, just as they did in 1933. President Roosevelt ordered that
all gold bullion be turned in May 1, 1933 at $20.67 per ounce. Six months later, on Jan. 1, 1935, the price was arbitrarily set at $35 per ounce. Those who followed the law, and turned in their gold, lost 69% of their gold value.



Gold Coin SELLING Advice

The Spread
What is the difference between your dealer's buy price and sell price? With gold spot price at $1,720, I find it about $69 - they will buy at $1,651, and sell at $1,789. This equates to about a 4.0% fee per transaction, or markdown=$69.

Reporting Issues
Transactions greater than 25 one-ounce coins require identification (Driver's License Number, SS#), and the filing of government IRS Form1099B report (amount, SS#, etc.)
American Eagles are currently EXEMPT from IRS reporting, which partially explains the premium paid for American Eagles.

Selling Coins
Always sell to a reputable dealer, to ensure that you are paid at current market prices, with a reasonable fee (5% or less.

If you should have some old, scrap gold jewelry, NEVER send it to cash for gold, or any other similar gold-buying scheme. You will be paid a small fraction of what the scrap value actually is, perhaps 15%. To obtain maximum value, sell to a reputable LOCAL jeweler, where you can get up to 80% of metal value.



.
Imitation Gold Coins Sold on TV
(copy, facsimile, fake, imitation, phony, replica, reproduction, spurious, tribute)
How about deceptive, deluding, misleading, and sneaky?
real-gold-buffalo-coin
Real Gold Coin
reverse side
$ 1,770



tribute-gold-buffalo-coin
Tribute Gold Coin
reverse side
$ 9.99

.
Have you noticed the ads on TV for the -
"
$50 Buffalo Gold Clad Tribute Coin" - for just $9.99?
"Tribute" is the key word here - it is an imitation of the REAL "
$50 Gold Buffalo Coin".

2012 Fifty Dollar Buffalo ("Official Web Site" and TV ad))
This "Tribute" coin is a phony gold coin,
except for a thin coating of 14 mg of pure 24 carat gold.
What is the value of the 14 mg of gold?
$1,770 - - - One ounce of gold
$    60 - - - One gram of gold (divide by 28.35)
$       0.84 - 14/1000 of a gram (multiply by 0.014)
As the price of gold soars, the price of THIS "$50 Gold Buffalo Tribute Coin" isn't going anywhere. If the price of gold doubles, you might make $0.84 - provided you could find a buyer for this replica coin for $10.83.


BUT WAIT! This web page offers a coating that is TWICE as thick! SAME COIN!
$50 Buffalo Gold Clad Tribute Coin
THIS web page is ANOTHER site offering the phony gold coin,
except for a thin coating of 31 mg of pure 24 carat gold.
What is the value of the 31 mg of gold? If, in fact, it really is 31 mg.
$1,770 - - - One ounce of gold
$    60 - - - One gram of gold (divide by 28.35)
$       1.86 - 31/1000 of a gram (multiply by 0.031)

As the price of gold soars, the price of the "$50 Gold Buffalo Tribute Coin" isn't going anywhere. If the price of gold doubles, you might make $1.86 - provided you could find a buyer for this replica coin for $11.85.

So which is it? 14 mg or 31 mg? It doesn't matter.
This is a poor "investment", regardless of the thin coating of gold.

How to tell the difference between real and fake coins -
On the back side of the coin, underneath the buffalo, it says -
Real coin: $50 - 1OZ. .9999 FINE GOLD
Fake coin: 2010, or 2011, or 2012

The underlying base metal (99%) of the tribute coin is not revealed.
Lead would be a good choice - similar to gold in weight and softness - but toxic, if the thin gold plating were removed.
Steel would be my guess - cheap and durable.

(Don't be deceived by the colors of the coins to the left - they are both the same gold color. This is not clear in the photographs, due to lighting differences.)



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Disclaimer
The author is not a numismatist or investment advisor.
Some data may be incorrect.
Visit a professional coin dealer if you want to sell, or purchase gold coins as an investment.




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©2007 - 2012 Vaughn Aubuchon
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This Vaughns Gold Coins and Bullion summary
was last updated on 2012-10-24.