Gold Coin Insider Report

Gold Investing Insider Report
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Gold Coin Insider Report

Table of Contents
Gold Coin Insider Report ....................................................... 1 Bullion Coins ...................................................................... 7 Semi Numismatic Coins ..................................................... 8 Numismatic Coins or Rare Coins ..................................... 10 Which Coins are the Best?............................................... 12 How to Evaluate a Coin Dealer ........................................ 15 Coin Fraud and Counterfeits - How to Protect Yourself .. 18 Conclusion ....................................................................... 20

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Gold Coin Insider Report

The title might sound a little bold, but you’ll see that this report covers things that almost nobody else dares to say. You might already be a gold coin investor or you are just starting to look into it. Either way you’ll find a lot of information in this report which can be worth a lot of money and can make the difference between making a lot of money with your gold coin investment or just breaking even or losing your hard earned cash. A lot of the information presented is applicable for other coins as well. But gold coins have certain advantages. By investing in gold coins, you are using two principles to secure your investment. These are scarcity of gold and demand for collector’s items. Gold is valuable not because it looks good, but because it is scarce. It has attributes that make it valuable for certain industrial applications, like for example as catalyst in an array of processes, or in dentistry or in electronics or in fuel cell technology, just to name a few. But why invest in gold coins and not in silver or copper or nickel coins? Well, gold has one characteristic that really help: Gold does not oxidize. That means a gold coin in a given

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Gold Coin Insider Report

condition will stay in that condition and will not deteriorate or turn black, like for example silver. And why not platinum coins? There are no “real” platinum coins. Platinum coins were never used as real money. They are basically just commemorative medallions, which were given the artificial status of being legal tender, without any history. That makes these coins rather worthless for real coin collectors. They are not scarce and they would basically only appreciate in value based on the precious metal content. That leaves gold coins as the smart investment choice. You have on one hand a scarce precious metal. On the other hand you have with gold coins a collector’s item which is in high demand and which will stay in the condition that you acquired it in, provided you handle it with a little care. I am not saying that it is not good to collect other coins. There are actually many coins that are worth collecting from an investor’s point of view. But you would have to study a lot and you would need a lot of experience with coins if you want to make wise investment decisions about them.

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Gold Coin Insider Report

Therefore I’ll focus on gold coins as an investment vehicle. You can learn the basics pretty quickly and start to make good investment decisions in no time. Actually after reading this report, you’ll be already very well equipped and you’ll know more than many a gold coin salesman, or at least know more than the salesman wants to tell you. Not all coins are equal. If you invest in the right coins you can make a lot of money. Some coins that are not widely known are worth much more than their bullion price. Do you know which coins can give you the biggest earning potential? There are gold coins that look nice. Some even come in fancy boxes. But very often these coins are only valuable for the salesman that pushes them and wants to make you believe that you made a wise investment. It is true that gold usually does not appreciate in value over night and should be seen as a long term investment. You have to make sure that you invest in the right pieces. You don't want to find out in five or ten years that you fell prey to the deep voice of an expertly trained salesman and your rare coins turn out to be not so rare.

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Gold Coin Insider Report

There are basically three types of coins: 1. Bullion Coins 2. "Semi Numismatic" Coins 3. Numismatic or Rare Coins

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Gold Coin Insider Report

Bullion Coins A bullion coin is basically worth its weight of precious metals. That means a one ounce bullion coin will trade around the gold spot price. In order to buy those coins you have to pay a small premium of between 3% and 17% on top of the gold spot price. How much you have to pay depends on the type of coins, the dealer and market conditions. Bullion coins are also typically available in various weights. These are usually multiples or fractions of 1 troy ounce. Some bullion coins are produced in very limited quantities in kilograms and even heavier. Bullion coins sell for a premium over the market price of the metal on the commodities exchanges. This is due to their comparative small size and the costs associated with manufacture, storage and distribution. The margin that is paid varies depending on what type of coin it is, the weight of the coin, and the precious metal. The premium also is affected by prevailing demand.

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Gold Coin Insider Report

Semi Numismatic Coins A proper definition for semi numismatic coins is: Not scarce enough to be desirable by real collectors, but something a dealer can charge some premium for. Semi numismatic coins are basically bullion coins. Their real worth is whatever content of precious metals they have. In theory they can be collected and in theory they might appreciate in value. But in real life they are coins that are worthless beyond their precious metal content. Numismatics is the study or collection of currency, including coins, tokens, paper money, and related objects. Semi numismatic coins are then coins that are half collectible. Either something is collectible or it’s not. You can only be pregnant or not. The term semi numismatic has been invented by “smart” coin dealers. You can buy coins that are labeled semi numismatic, but the dealers that offer those coins will charge hefty a premium. That is fine, if you know what you are doing. But don’t expect these coins to appreciate in value beyond the price of gold, silver or platinum. Let’s say you buy such a coin and pay 30% -35% premiums above the spot price for gold. Then you
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Gold Coin Insider Report

have to sit and wait, until the spot price for gold has increased up to your buying price. You also have to calculate in possible fees for selling the coin. This premium is nothing unusual. The coin dealer has to make a living somehow. But if the coin dealer “educates” you and tells you that you are buying some kind of rare coin, then this is not straight forward. There are cases when it completely makes sense to buy bullion coins, for example when you want to put gold or silver into your IRA. Then you can only use certain coins. I.R.S. Publication 590, Individual Retirement Accounts Page 33: Investment in Collectibles, Exception “Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion.”

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Gold Coin Insider Report

Numismatic Coins or Rare Coins Numismatic coins or rare coins have a value beyond their precious metal content. These are coins that are actively collected. There is a market for these coins. Most of the time coins struck before 1933 are considered numismatic coins. These coins are often graded by independent grading services and stored in slabs so that you can see and handle them without damaging the coin. There are several grading services, but only two that are really worth using: PCGS (Professional Coin Grading Service) and NGC (Numismatic Guaranty Corporation of America). While owning graded coins is still no guarantee, it adds at least some certainty to the picture. The best is to learn all about coins and evaluate the coin yourself. But graded coins give some kind of measure. If a coin is graded for example MS-67, that means Mint State and the grade 67 out of 70, you know that you have a fairly decent coin. A different grading service might grade it MS66 or even MS-65, but you can be fairly certain that you have a very nice coin in mint state and most likely nobody tampered with the coin. That
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Gold Coin Insider Report

means you can sell the coin again in the future without too much problems. If you would have on the other hand the same coin, where some dealer only states that it is in mint condition, you can be in serious trouble if you want to sell the coin 10 years later, only to find out that your dealers opinion was way too optimistic. What does this mean for you? It means you should only buy graded coins (PCGS or NGC) and then the best state that you can get. When you buy coins for investment purposes, you should look for grades of MS-63 and above.

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Gold Coin Insider Report

Which Coins are the Best? Almost all rare coins tend to appreciate in value, especially if they are in excellent condition. Especially U.S. coins that were minted before 1933 tend to do well. In 1934 the U.S. government stopped to mint gold coins as legal tender. Also, in 1933 many gold coins were seized by the government and molten in order to handle the great depression. The scarcer a commodity is, the higher the price tends to be. As many gold coins were taken off the market forever in 1933, coins that were minted before that time tend to be more valuable. This is simply because there are fewer coins available. Another concept: Things tend to age. That means, the older something is, the less perfect the thing tends to be. Gold does not really age, as it does not corrode. If stored properly, gold coins can look brand new even after 100 years or more. But people are used to old things looking old. Therefore, if you own old coins in excellent condition, the value of these coins tends to be much higher. Rare coins in mint state can rise in value and usually do so.
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Gold Coin Insider Report

As time goes on, more and more coins get lost. Somebody inherits a rare coin and does not know what it is and gives them to their kids to play with. Or sometimes people hide coins, only to forget later where they were and finally they are lost forever. With rare coins you have an investment that is hedged on one side through the precious metal. Gold and silver have never lost their value completely, opposed to paper and other “securities” which can in fact lose all their value. On the other side you have a collector’s item. Coins have always been collected. This gives you the second build in security of your investment. Yes, it is true that the prices of rare coins fluctuate. And yes, it can happen that a coin that was considered extremely rare suddenly turns out to be not that rare, because somebody discovered a larger quantity in some long forgotten vault. But this does not happen very often and even if it happens, market factors tend to bring the prices back up fairly quickly. Gold prices have been increasing nicely during the last 10 years. If they continue to increase like that, your rare coins will also appreciate in value, as the gold or silver portion of your coins moves up with the bullion price.
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Gold Coin Insider Report

Good examples of coins to buy for investment purposes are the $20 Saint-Gaudens, the Walking Liberty half’s, Morgan silver dollars and Buffalo nickels.

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Gold Coin Insider Report

How to Evaluate a Coin Dealer As you have to put a lot of trust into a coin dealer, you should evaluate beforehand whether the given dealer is any good. It boils down to common sense. There are many coin dealers around. Some good, some bad and some are plain ugly. You have to judge for yourself. Here some points that you should look at: Does the dealer use things resembling U.S. Mint? There are dealers that try to give the impression that you are buying from the U.S Mint or as if there is some kind of endorsement by the U.S. Mint or the U.S. Government. A company that needs sly tricks like that is probably also sly and dishonest in other parts of their business. Is the dealer honest and telling you the truth? There are many dealers that outright lie to you. For example if a dealer starts to talk about “semi numismatic coins”, it should trigger a red flag. The question is not whether they say there are honest. The question is simply do they try to lie to you.

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Gold Coin Insider Report

Is the dealer trying to sell fear? The world is sometimes scary and there are things happening that probably don’t make you happy. But if the dealer chimes in with this and tells you how everything is gloomy and the future is bad and the government might confiscate assets, you should know that that particular dealer is not working for you, but against you. Decisions that are made out of fear are usually not very wise decisions. Are the terms and conditions only written in their favor? Yes, any company that wants to do business successfully needs some kind of written agreement. But some companies just go overboard with this. For example if you cannot cancel an order once placed, something should smell fishy to you. Some dealers are in business for a long time. But that does not mean that they are good. Fidel Castro was in charge of Cuba for a long time, but he was probably not the nicest head of state to say the least. A good coin dealer will give you honest advice and teach you true data. If the product is good, you don’t need expertly trained
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Gold Coin Insider Report

salesmen. There is nothing wrong with a salesman, but there is a lot wrong if a sales person tries to lure you into something that is not good for you. Every company needs to make a profit. But some companies try to make a profit by deceiving their customers. If you take a look, you will recognize the black sheep. Just make sure you see them before you hand them your hard earned money.

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Gold Coin Insider Report

Coin Fraud and Counterfeits - How to Protect Yourself There are counterfeit coins. There is no question about it. You can learn how to recognize counterfeit coins, but it is a lengthy process, as you have to study a lot until you can accurately distinguish between authentic and counterfeit coins. There are counterfeits out there that even can fool experts. But experts with the proper equipment can accurately spot false coins. The majority of all counterfeit coins are sold on eBay. Sellers create “private” eBay auctions, claiming to sell coins from an estate or have noreturn policy. If you want to play it save: Just don’t buy on eBay. At the time of this writing, eBay charges huge fees. A seller has to pay total of 12% of the value in eBay and PayPal fees (eBay 9% and PayPal 3%). This is often more than the profit margin for a coin, especially a bullion coin. The only way how sellers can live with these fees is if their purchase price of the coin was very low. But if the purchase price is way below the spot price for gold, go figure. Because eBay provides minimal protection against numismatic and other fraud and because
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Gold Coin Insider Report

it's so easy to scam others on eBay, it's safest to buy only from sellers you know or who are recommended to you by reputable sources. Yes, there are a few dealers that also have an eBay presence. In that case, it might be fine. But I suggest contacting the dealer and asking for special payment arrangements. R ecently eBay removed check and bank wire from their recommended payment methods. If a seller would advertise that they also accept checks or bank wires, they would risk losing their account. But for you as a customer it is completely OK to ask for other payment options. With this you can save the 3% PayPal fees, which adds up fast. Also, if you only buy graded coins (graded by PCGS or NGC), you reduce the possibility for fraud and counterfeits enormously. While it is probably possible to copy PCGS or NGC slabs, these companies have lists with all the coins that they have ever graded. You can look up a coin (online, free) and immediately see whether it is a genuine coin and was slabbed and graded by the company. These two companies also have a lot of experience and the trained staff necessary to detect counterfeit coins immediately.

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Gold Coin Insider Report

Conclusion Investing in coins can be very rewarding. If you stay away from so called semi-numismatic coins, you are already 80% ahead of the game. If you then use a little common sense and not try to snipe coins on eBay for the least money and buy your coins instead from a reputable dealer, you are further ahead. Coins appreciate in value because they contain precious metals and because the coin itself is sought after by collectors. Precious metals get more expensive mainly because there is limited supply. Gold is not only used for coins and jewelry. There are a lot of industries that need gold in order to manufacture their products. One example is electronics. Aside from economies that are not as stable as they could be, gold is in high demand because a lot of high tech products contain gold. If you focus your investment strategy on rare coins and only buy the best possible grades, the chances are extremely high that you will build yourself a winning portfolio that will more than keep its value and most likely outperform any other investment.
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Gold Coin Insider Report

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