Collect Bullion Like a Numismatist

It is typical for people who have made the decision to purchase physical gold or silver to assume there is only a single option for each metal. They quickly find out that there are many choices of bullion-priced precious metals. There are different sizes of ingots and bars. Then there are hundreds of choices in gold and silver coins from dozens of countries.

Acquiring bullion-priced physical precious metals can be considered a form of what I call “wealth insurance,” meaning it is something to purchase and file away in a safe place. But, a number of customers of my company also have fun when doing so, similar to how numismatists assemble a collection.

Even if you only want to own one specific product, such as 1-ounce size gold and silver American Eagles, you don’t have to settle for owning coins with all the same date. Consider working on a date set so long as they can be acquired at bullion-related prices.

We have customers who love looking through our inventory of common 1-ounce silver rounds to find designs that they don’t yet have.

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With gold or silver coins, some people try to acquire bullion-priced issues from as many different countries as possible, and even all different sizes.

Here’s a tip that some of our customers pursue to find bargains. There have been so many gold and silver non-circulating legal tender (NCLT) coins over the past 50-plus years that, even if they were originally sold at premium numismatic prices, many of them now trade on the basis of metal value.

Miscellaneous high-purity (generally at least .900 fine) gold coins can be sold to wholesalers or refiners a little bit below the spot price. Gold coins quickly tie up working capital. It can be difficult to find the right retail customer who might have an interest in any issue as a collector piece. Therefore, many dealers quickly liquidate these hodgepodge coins wholesale for their metal content.

We have savvy customers who let us know that they have an interest in opportunities to purchase random gold coins if they only have to pay a small premium over the spot price. If we contact them, they quickly come in to buy them. Our company makes a slightly higher margin than selling them wholesale, and we have a happy customer.

To make such an arrangement with a dealer, you need to establish a relationship and demonstrate that you are a ready, no-hassle buyer. Some dealers won’t consider such transactions, but you never know what might be possible unless you ask.

There’s one drawback to this last strategy, however. Dealers tend to buy more of these miscellaneous coins and bars when prices are rising. There is a definite slowdown in liquidation when prices are low. So, if you try this strategy, you have to consider the trade-off of trying to save money by paying a lower premium on such acquisitions versus the risk of only getting to buy when spot prices have risen.

By the way, it has happened that a few customers who acquired a variety of bullion-priced gold and silver have gone on to become numismatic collectors as well.

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Answer to the Previous Trivia Question

Last week I asked: How much more valuable in the marketplace was the scrip issued by Clark, Gruber & Co. during the Civil War, which was redeemable on demand for physical gold, compared to the U.S. government “Greenbacks,” which were not redeemable for gold or silver?

The answer: Clark, Gruber notes were worth as much as 4 percent more in everyday commerce than the U.S. government issues.

This Week’s Trivia Question

This week’s question: Who was the first U.S. coin designer ever elected to a state or federal office? Come back next week for the answer.

Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award, 2012 Harry Forman National Dealer of the Year Award, and 2008 Presidential Award. Over the years, he has also been honored by the Numismatic Literary Guild (including in 2021 for Best Investment Newsletter), the Professional Numismatists Guild, the Industry Council for Tangible Assets, and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Mich., and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at the Liberty Coin Service website. Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing, which streams live and becomes part of the audio archives.