Company Commentary regarding Gold Bullion

General Gold and Silver Bullion can now be purchased directly through any stock trading account from the Wall Street discount brokers ... ticker symbol for Gold is GLD and ticker symbol for Silver is SLV . These are ETF's that track the “spot price” of both of these precious metals . This has basically made the purchase of generic grade bullion obsolete (unless we are dealing with an IRA retirement account where holding the physical metals makes long term sense-call for details 888.969.6465) ...  We still frequently supply bullion to our clients, but we strive to educate our clients that they can invest better.  

The Superior Gold Group specializes in having Numismatic collectible graded coins, so this commentary will have no effect on our core business.

Every day we get calls from people asking if they should buy bullion (Silver Eagles/Gold Eagles/bars of gold), or if they should buy Numismatics (Gold and Silver coins that are a cut above the rest in quality and therefore graded inside protective cases by companies such as NGC, PCGS and ICG).  We have outlined perspectives of each type below.

Bullion

• Bullion is popular because it trades very close to the "spot" price of Gold.  The price that is usually reported in the media.  People like bullion because they get the most gold and silver per dollar spent.  Since there is no premium for rarity, bullion follows the trading price of an ounce of gold or silver.

Consider Bullion’s other side

• Bullion is all about size and weight for the dollar spent, it tends to be heavy and difficult to transport.  It’s not unusual for gold shipments to have substantial weight.    This stuff is heavy and difficult to store. 
• Numismatics are always slabbed and graded with unique serial numbers, bullion is just a raw gold or silver and if it ever comes up missing, you can forget about trying to trace it.  Once it "walks away" without serial numbers , say goodbye.
• Bullion trades strictly based on the "spot" price of gold or silver. This is your catch 22 with bullion, because numismatic coins are a collectible, there is a premium for rarity.   Bullion has no rarity to speak of, so you are just paying for gross weight.  

In the collectible world of baseball cards for instance, a company named PSA has a grading system similar to coins and highly graded cards trade at a huge premium to bulk, standard cards.   While vintage baseball cards have enjoyed an extreme run up, collectible coins trade at far lower multiples.  Imagine trying to trade your Ted Williams baseball card for a loaf of bread in the times of a crisis.

The last issue with bullion is that it can be difficult to turn into cash.  While some dealers with padded mark-ups will gladly buy back the product at or below wholesale, many believe that liquidating numismatics is far easier to achieve.  We can speak from first hand experience that it is much easier for us to move collectible numismatic than an older hoard of bullion.  Since bullion has no rarity aside from the metal content itself, it is far more plentiful than numismatic coins.

Potential government confiscation of gold and silver is the fourth and potentially most damaging argument against bullion.   Going back in time to April 5th 1933 during the Great Depression, President Franklin D. Roosevelt (a Liberal Democrat) signed into law the hoarding of Gold Confiscation Act, forcing Americans to sell back all gold bullion to the government.  The government set the buyback price of Gold at $20.67 per ounce.  

As President Roosevelt was taking in all the gold at that fixed price,  the government "reset" the new price of gold to an incredible $35 an ounce, nearly doubling the value in gold overnight. 

While this might appear to be a huge mark against the purchase of any gold and silver investment, one must note that in passing the law, President Roosevelt exempted all numismatic gold coins.   The president said that since numismatics had a value above and beyond the spot price of gold, they could be kept by collectors.

Bullion investors cried foul seeing the price of gold rising while their hoards were back in government hands at the far lower forced "sell" price.

Numismatic investors smiled all the way to the bank as they got to keep their gold and watched the price of the precious metal repeatedly beat its bullion counterpart

Numismatic investors are still two steps ahead of their bullion counterparts.

While past performance is no guarantee of future results, one can understand that if our government were to once again confiscate all gold bullion (possibly as a way to counter the growing national debt), it would be difficult to include numismatic coins as each one carries it's own unique value. Caveat Emptor!