What Gold Coins

Dean said:

Buff are pure 24k and Eagles are not?

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Yes. Eagles are the traditional 90% gold, 9% copper and 1% silver. Silver is added to make it more 'gold' color instead of the coppery color of a K-rand. This was the alloy used when they were circulating, due to pure being so soft. Pure coins would not last long and would get 'light' way too fast. I have a post card sent out to post masters in the 19-teens when there was a problem with 'sweated' coins. Sweating is a process where the coins were lightened bt various means. They were required to weigh the $20 gold coins that came into the post offices.

The buffs are the first 24K coin we have made in the US and is designed to compete with maples and some of the other pacific area coins that are .999 Many, including Asians prefer pure gold instead of alloy.

I used to get sheet gold that came out of Viet Nam when the boat people were leaving. That was the traditional form of gold in that region, a thin sheet of a known weight, wrapped in thin paper. I could not read all of the oriental markings on the paper or gold, but it did list several major cities in the region on it. I wish I had kept one of them, as the have all but disappeared from the market today.

G

Dean said:

I'm a little confused. I see from the local coin dealer a 1oz Buffalo is 832.52 and 10z Eagle is 838.34. Why is the Eagle more expensive if the Buffalo is 10% more gold?

Glad to have you on here BTW. Appreciate all the insight.

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All of the coins, of the one ounce variety, contain one ounce of gold. The copper and silver alloy is additional weight. There are 20 dwt (pennyweights) in a troy ounce. The 999 coins weigh 20 dwt. The 90% coins weight 21.9 dwt. Generally when you see a weight listed, it is the melt value and not the actual total weight. Traditionally, an alloy was used for wear resistance.

To an extent, the bullion coins vary slightly due to supply and demand. In a normal market, you will find them all within probably a $5-7 spread. All normal markers are out the window right now. The buffs were previously in more demand, and were trading higher. The change MAY be, as I haven't checked it out, due to buffs still being shipped and the eagles being sold out. Maybe. I would check to see if he does in fact have both in stock.

A few weeks ago, there was a big order for K-rands. It was for $24 million US. The bid price for K-rands shot up within hours about $30 over the other coins as this order was being filled. The buyer wanted specifically those coins and was willing to pay for them.

All of the bullion coins are good to buy and hold. I generally recommend for most people that they stick with the modern ones that are in even weights. I do like the older coins, the ones that actually circulated, but it is harder for most to figure how much 1.20567 oz for a Mexican 50 peso, .2354 for a sovereign or .44 oz for a 4 ducat. I also recommend coins over bars, due to a more recognized item. Nothing wrong with a Swiss Credit bar of course, but it doesn't have quite the same recognition.

And I am glad to have gotten the invite to join the group. My family had to survive even back in the 60's on food storage and I was a practicing (and here is an overused word) survivalist in the 70's. I've always had the mentality to 'Be Prepared' (and yes I was a Boy Scout) and my working with coins and guns fits right in.

G

Dean said:

What is a K-rand?

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Shorthand for Kruggerrand, the first 'modern' gold bullion coin from South Africa. They first came out in 1967, when it was 'illegal' for Americans to hold gold made after certain dates. Countries like Mexico and Austria kept making their now non-circulating gold coins in the old odd weights with the old dates on them. South African had the forethought to say 'hey, maybe these would be more marketable if we make them in an even weight, such as 1 oz, 1/2 oz etc' and they found a new market for some of their considerable wealth.

K-rands were minted and imported in large quantities until the 'politically correct' got wind of them and urged a boycott of everything South African. Not discussing politics here, but rather history. They first destroyed Rhodesia and then took on South Africa. Zimbabwa (I think this is a close spelling) should serve as an example of what we could well experience here if unca sugar keeps on the road to a totally worthless currency.

At one time, during this boycott, the price on a k-rand was a bit below other bullion coins, but that isn't the case any longer. No, they are not illegal, regardless of what some would think. They were just not importable during the boycott.

G

Dean said:

Any gold coins to avoid? Gold has always been kind of a mystery to me, I worry about buying gold but it not being as pure as labeled even with coins. Any weight to that thought?

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There used to be a kit marketed that had thickness and width slots cut into for most of the common coins. Dimension and weight are constant - any variation and it would be verifiable with this test. Not made anymore, as far as I know. You could of course do the same test with a micrometer and scale.

Coins that are the right size but not gold will weigh far less. There are some good counterfeits around for common coins but none will pass the weight test. About 20 years ago, someone hit town with genuine coins, in this case 50 peso from Mexico, that had been carefully drilled into the side, hollowed out and filled with lead. Looked good on the outside, since they were real coins, but weighed quite a bit less. The mex 50p has lettering on the side instead of the reeding we have, so there was spaces in between letters to drill into.

Governments are in the business to sell the coins they make. If even one underweigtht or under carat coin got out, no one would ever accept them again. That would cost far more than they could steal. Same for private mints. We took 100 1 oz silver rounds from different makers and weighed them to see how they would weigh out. Always came out at 101 to 101.5 oz per 100. Gold coins are all individually weighed at the mint. They have had a hard time for a couple of years getting enough blanks from private industry that would meet their strict tolerances.

For ease of use and familiarity, I would stick with the big three - Eagles, maples and k-rands. You can insist that they be weighed in front of you. I have had customers do that.

Coins to avoid? Not really anything that I can think of. The ones that are most recognized are the best ones of course, and you might find dealers wanting a larger bid/ask spread for lesser known ones. As a side note, the russian chevronets, which are just under a quarter oz, made in the 1970's are slightly radioactive. At least they were when they were marketed. You would have to have VERY sensitive equipment to find that. The reason? They used to use low power nukes in some mining operations back then. No reason to worry about them, they might even be totally clean these 30 years later. I've got one or two of them just for fun.

G

Dean said:

What gold coins are the most recommended. Golden Eagles, Canadian, South African, are they all the same?

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Coinguy said it right about what is better and all. It's up to you preference wise. On another note The silver 1 OZ has a face value of $1 U.S. This is legal tender. You can legally buy something with it, unlike the other coins or rounds, you may get. The Gold 1 OZ has a face of $50 and Platinum 1 OZ $100 face.

Now at this point it would be real dumb to go to Wal-Mart and use these for money. If hyperinflation were to take hold it would be worse. On the other hand, things may need to be readjusted and price may be set accordingly. Someone mention on another thread about the cost of clothing through out the years. How an ounce of gold would get you a nice suit, with shirt, tie, sock and shoes. Years ago when an OZ of gold was pegged at $35, this would easily buy all this stuff in 1935. So if you had lots of "junk" silver coins (Pre 1964 90%) and the the silver, gold and platinum Eagles, you could start a mini economy in your area, buy using these coins. You could even legally buy from a current store, if you wanted to take the hit.

I have been into K-rands for a long time, i wear a 1/2 oz all the time as a necklace, and so does my wife, and both of my parents. I also like the eagles. Not to sure on the buffalos though... Seen a few infomercials that are selling gold clad reproduction buffalos, so it makes me curious how many fakes are selling on EBay. Find a good local dealer, and also get a test kit.

Also silver coins and sterling silver is also a good buy. For silver coins look for dimes and quarters that are pre-65. Only WwII nickles are 20% weight. Sterling silver is .925 meaning 92.5% silver, so when weighing the silver items take into the account the purity levels. Also, if your thinking about melting sterling, a little advice, some items will be weighted like candle holders, and knives have silver plated bladed, so don't melt until you remove the weights. Antique stores are great for looking for old sterling silver. I have three stores where I can take a small scale so I am trying to find below actual spot priced items. Most stores won't care cause they know you will buy if you find something. Last week I found a tray with 8 cups for $165, once I weighed just the cups, none weighted, I found that there was close 10 troy ounces of silver (after impurity weight) spot was at $28 and change, bought it immediately, melting it this next week into 1/2 ounce bars.

BillS said:

I've read where people have speculated that retail stores would start accepting junk silver during hyperinflation. A 1963 dime is worth about $2. That's worth enough money to buy a loaf of bread today. That will most likely be true when a loaf of bread is $20, or $200 or $2000. Hyperinflation is a 100% certainly. It's just a question of when it starts. People need to be prepared for it. Junk silver dimes are the best way to make small purchases.

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I agree at some point people will start taking silver and gold over FRNs however I personally don't think it will happen that quickly... or at least not in the day to day stores. The, shall we say, grey or black market "stores" will probably be the first. How soon the mainstream stores do is hard to say. You'll probably be better off trading wtih mom and pop places, farmer markets or direct with the farmer.

If course we're all just speculating at this point although information from those who have lived through a collapse (Ferfal, for example) did say gold eventually became a fairly common currency for some. In his book he talked about those who would go shopping with a gold chain and then cut off X number of links to pay for the goods, just don't flash too much or you wouldn't make it home.