This is going be an easy one to compose, because all I have to do is quote from a Wall Street Journal column of 11/27/2017. It begins as follows: “The U.S. Mint makes a pretty penny selling gold and silver coins. But there are two sides to the deal, which some investors are calling highway robbery. After years of making pennies and nickels that cost more to produce than they are worth, the Treasury Department is making a mint off of a line of coins in what is known as proof condition; sheathed in plastic and never touched by human hands. Last year, sales totaled $112 million. The government is currently selling the gold coin proofs at a 25% markup over per ounce gold prices, a premium that can run as high as $350 per coin. The silver (proofs) carry a more than 200% premium over market silver prices.”
The article goes on to illustrate what can happen. Example, a 64 year old retired software engineer was sold 45 – 4 coin sets of Gold Eagle proofs, and 979 Silver Eagle proofs for $308,000 including a 6% commission. Less than a month later, his IRA statement valued the coins at $212,000. Or, “Marvin E. Johnson, 61, of Kanawha Iowa, said American Bullion, Inc, sold him 920 American Silver Eagle proof coins for his retirement account. He paid 2 1/2 times the market price for silver and saw his investment drop like rock.”
Enough of that. First of all, Colorado Gold doesn’t sell ‘proofs’ as they are a poor investment. Second, we charge a 1% commission, which includes shipping to you, not 6% as the above was charged. When you sell, we charge NOTHING, if you bought them from us, which I think is unknown in the industry. Third, if a proof Gold Eagle sold for $350 over spot, as the WSJ piece says, a proof Gold Eagle, as I write this, would be $1633.80, And Colorado Gold’s price is $1328.80. If a Silver Eagle’s proof price is $51.39 as the article says, our Silver Eagle price currently, is $18.95. Basically, when we sell you a regular, non proof Gold Eagle, our price is about 3% over spot, and a regular, non proof Silver Eagle is about 11% over spot. The 11% over spot, is really not more than gold’s 3%, because silver’s bulk makes shipping more expensive, and the mint has to stamp out far more for the dollar amount of gold, making the labor cost far more.
Are gold and silver Eagles a worthwhile investment? Very much so, but not in “Proof” form. Selling a proof coin is like buying a new car and having to sell it as a used car. 25 years later, if the car is still ‘proof,’ meaning never used, it can sell for more than it cost new, but in that 25 years, it has to be stored, insured and cared for. I have a 1988 Mercedes 560SEL which belonged to Barbara Firestone, who used to have it shipped to Florida by train every fall and brought back by train in the spring. I have her original title, it sold for close to $60,000 when new, and was the most expensive car sold in America in 1988. It had 62,000 original miles on it when I bought it for $8100 and paid $1400 to have it shipped from Boston. It is a wonderful, luxurious, close to proof car, which now has 98.000 original miles on it, and is probably worth $15,000. It has been a fairly good investment, and given us a lot of pleasure. In another 25 years, if I never drove it another mile, stored it under cover, it might be worth $60,000. I’d rather have my non-proof Gold and Silver Eagles, except I do love Mercedes, and everyone has a few weaknesses! Don Stott- 1-888-786-8822