New York (Vocus) February 1, 2010 -- The price of gold (www.Stacks.com)
is currently experiencing an unprecedented high. Many buyers are
asking themselves, what exactly is involved when considering gold
purchases. Stack’s, home to some of the most respected numismatic
experts in the world, has created a list of frequently asked questions
on the topic:
Generally, reputable outlets sell gold in three ways:
Store
The most popular way to buy
gold is to establish a relationship with a reputable company that is
financially stable and has weathered fluctuating markets. You will
learn from a knowledgeable representative and usually can receive free
advice about balancing your gold acquisitions. An advantage of
purchasing gold at a store is that you can immediately take possession
of your gold.
Online
Many companies have Web sites
where you can inquire about the current price of bullion or order
numismatic gold. It is common for these transactions to require a
confirmation by e-mail or phone to avoid scams (of which there are
many). If you plan to be an active gold buyer, credit verification will
be required. Always buy from a reputable company, as there are
counterfeits among bullion and numismatic gold coins
(http://www.Stacks.com).
Auction
Gold coins sold in public
auctions or mail bid sales are mostly numismatic, as the market for
gold bullion is too volatile for the processing time of a major
auction. The guidelines for bidding in an auction are normally outlined
in the “Terms of Sale.” Each auction company has a representative to
answer bidders’ inquiries about coins offered at auction and help you
register to bid in-person, online, or by phone, fax or mail. Auctions
are a primary source for educated buyers of valuable numismatic gold
coins. Unless you are an expert, buy only gold coins certified by a
well known third party grading service such as the Professional Coin
Grading Service (PCGS) or the Numismatic Guaranty Corporation (NGC).
Beware of “bargains,” as such are usually scams or fake offers. Always
take possession of your gold, to avoid it being mingled with that of
others, and to be sure it actually exists. A number of frauds in the
past have involved selling gold coins that were “safely stored” by the
seller.
There is a certain element of
trust involved. Deal only with a company that has a long standing
numismatic presence. Be wary of firms that may have been recently
established to take short-term advantage of the active gold market.
What types of gold should I buy?
Bullion
Bullion
refers to any form of gold (bars or coins) whose value is based solely
on the intrinsic value of the gold. The value is affected by the
weight (Troy ounces, grams or kilograms) and purity, which is often
referred to as fineness. A small premium is charged over bullion cost
when you buy, and a small commission is deducted when you sell.
Numismatic
Numismatic
gold is defined as coins made more than a few years ago that were
struck for circulation in commerce or for sale to collectors, as
commemorative, souvenir, or other special issues. Such coins can be
collected as part of a set and have value beyond their gold content. To
avoid counterfeit coins, it is advisable to purchase only numismatic
gold certified by PCGS or NGC.
Is numismatic gold worth more than bullion?
- By definition, numismatic gold
is worth a premium over gold value. Generally, the numismatic market
for U.S. gold coins includes regular issues from 1795 to 1933.
- Historical factors, quality
and scarcity also affect value. Numismatic gold was also issued and
utilized in daily commerce, whereas bullion is a convenient form of
owning gold.
- Many bullion buyers move into the numismatic market once they become more experienced.
What drives the price of gold?
- Gold prices fluctuate for
various reasons including demand, economic conditions, unstable
currencies, inflation, financial world events, the stock market,
interest on other investments and popular psychology. People tend to
flock to tangible hard assets to retain value when interest rates fall
and the stock market tumbles. Then, popular passion and psychology
contribute, driving up the price of gold with accelerated market
action. Recent examples of gold price fluctuation include:
--November 6, 2009 – After a
long period of directionless trading around the benchmark of $1,000,
gold moves above $1,100 an ounce.
--January-March 2009 – Investors
buy record amounts of physical gold as a safe haven as major economies
face recession and the dollar falls.
--September 17, 2008 – Gold
rises by nearly $90 an ounce, a record one-day gain, as investors seek
safety amid turmoil on the equity markets. The situation changes when
panicked liquidation of gold investments occurs as investors sell in
order to raise cash. Gold falls back to $680.
In other times and markets, many people find security in having a percentage of their assets in gold, “just in case.”
Why is there a push toward U.S. gold right now?
- U.S. gold is the most valuable
and most popularly traded component of day-to-day gold bullion
activity. Gold coins and bullion from the U.S. are struck by the U.S.
Mint, a branch of the Treasury Department. U.S. material retains its
value as it is so actively traded, and large numbers of consumers
create a higher demand. Additionally, the weight, content and purity of
U.S gold are guaranteed by the U.S. government. Worldwide gold coins
are of variable fineness because they are made in different places with
different degrees of care. The phrase “Made in the USA” lends itself
to a greater confidence and trust in the genuineness of the product.
Gold coins are subject to
certain accounting, financial, and tax rules, for which your accountant
can provide the latest information.
How do you store gold?
- Gold should be stored in a
secure place, such as a safety deposit box or home safe. Although the
last is not advised, if you do so, keep such arrangements secret. To
ensure your gold actually exists and to remove the possibility of
financial or other problems with any other entity holding your gold, it
is always advisable to take physical possession of gold.
I have a gold collection. How do I evaluate price?
- A basic evaluation begins with
the current spot price of gold. Then it must be determined whether you
have items that command a high or low premium. American Eagles or
Canadian Maple Leaf coins have small premiums, whereas $20 gold (or
Double Eagles) from the late 1800s or early 1900s carry high premiums.
Numismatic rarities are not as affected by the spot price of gold. The
rarer the item, the less the spot price of gold affects its value.
- Bullion value is determined by
weight and fineness. Numismatic gold values are determined by
condition and rarity. Basic reference guides like “A Guide Book of U.S.
Coins” can assist in your evaluation. Monthly and weekly publications
with current pricing information are available at your local newsstand.
- When the time comes to sell,
you will benefit by having an appraisal by a professional numismatist,
such as a member of the Professional Numismatists Guild (PNG).
How do I sell numismatic and bullion gold?
- The best way to sell bullion
gold is in person where the buyer can provide up-to-the-minute market
price and pay immediately. If you have established yourself with a
firm, there is much more flexibility. Numismatic gold can be sold
outright, or it can be consigned for auction sale. The last is
especially desirable if the coins have a high numismatic worth in
comparison to their bullion value.
About Stack’s
Founded in 1935, Stack’s is home
to some of the most respected numismatic experts in the world. The
company holds many records in the numismatic business including the
most expensive single coin ever sold at auction, the famous 1933 Double
Eagle, which sold in conjunction with Sotheby’s for $7.59 million; and
the most valuable collection ever sold, the collection of John J.
Ford, Jr., for nearly $60 million. In addition, Stack’s holds the #1
position in the American numismatic auction scene in terms of
longevity, number of sales conducted, lots sold and great rarities
handled. The company has offices in New York City and Wolfeboro, New
Hampshire. For more information, please visit www.Stacks.com.
No comments:
Post a Comment