We recommend that serious investors in gold and silver buy only bullion coins or bars. And within that category, buyers should stick with industry standard coins: American Eagle, Canadian Maple Leaf, Australian Kangaroo, South African Kruggerand.
We have seen numerous companies selling exotic or commemorative coins…French, Russian, Mexican, and many others. With all the product out there it can be difficult to know if your buying the genuine article. Remember you are buying to preserve your wealth, not for beauty or romance.
In gold, we recommend buying either the 1 ounce gold coin or bar, or 10 ounce or one kilo bars. In silver, we prefer the 1 once coin, or 10 or 100 ounce bars. We also carry $1,000 face amount bags of “Junk Silver.”
Naturally, we have have the ability to deal in almost any coin or bar that are commonly traded. While we recommend certain types of products, we would be happy to offer any item that our clients prefer.
Prices for precious metals are generally quoted as a percentage over the “spot” price. Spot is the price you see quoted on TV and Websites. It is an indication of the market only. Unless you are a mint, or trading multimillion dollar commodity contracts it is impossible to buy at spot.
Official mints turn raw gold into bars and coins, add a few percent for profit and overhead, and sell to a handful of wholesale dealers, which typically buy billions of dollars per year from the mints. The wholesalers add an amount for their risk, overhead and profit, and sell to large retail distributors, who deal directly with the public.
Euro Pacific Banks customers can expect to pay a price that is somewhere above the spot price and at the the low end of the range charged by retail dealers.
But price alone should not be the only consideration when purchasing precious metals. Availability of supply becomes critical during periods of rising prices and demands. Only dealers of good size and reputation may have access to the best product when you want it the most.
|$10,000 – 99,999||2.20%|
|$100,000 – 499,999||1.4%|
|$500,000 – 999,999||1.15%|
|$10,000 – 99,999||3.69%|
|$100,000 – 499,999||2.49%|
|$500,000 – 999,999||2.19%|
|$10,000 – 99,999||4.06%|
|$100,000 – 499,999||2.74%|
|$500,000 – 999,999||2.41%|
Why We Don’t Sell Numismatic Coins
We have nothing against collecting numismatic coins. Many are indeed beautiful, and have wonderful historic provenance. We think that, for two critical reasons, numismatic coins generally make for poor investments.
First is the mark-ups or commissions. It is not uncommon to see mark-ups of 20 to 35% on numismatic coins. That means that the underlying value of the coin may have to appreciate by 35% before you break even on a sale.
Would you buy a stock if your broker charged you a commission of 35%? We have our roots in the securities industry, where commissions are far lower, which is why we do not sell numismatic coins.
In addition, liquidity may be severely limited for little known, unusual or exotic coins. Unless the dealer has an immediate need for the coin you purchased, he may be reluctant to repurchase it from you. At that point you would be on your own to track down another buyer. Bullion coins are a fungible commodity for which there is always a ready, liquid, and transparent global market.
Reliability and Liquidity
Integrity and reliability cannot be taken for granted. The precious metals field is completely unregulated. Dealers of dubious reputation are not uncommon, as are investing schemes that sound good, but are often rigged to bilk unsuspecting buyers.
In times of economic uncertainty, shady operators take advantage of the urgent and emotional demand for precious metals by jumping into the marketplace. In such an environment it is incumbent on the consumer to only do business with trustworthy companies.
Peter Schiff is Chief Executive Officer and Owner of Euro Pacific Bank. Over the years Peter has developed a sterling reputation as a no nonsense straight shooter who zealously guards his public image.
Time and again he has shown his integrity by telling the truth, even if it costs him popularity or pecuniary benefit. His specific goal with Euro Pacific Bank is to bring honesty, integrity and fair pricing to the business.
Liquidity is an important factor often overlooked by many investors. There will come a time when you will want to sell. Ready, accessible, worldwide markets exist for the well known coins.
Liquidity presupposes a fast and efficient market, which may not exist for so for many of the numismatic and exotic coins that are offered these days. Often, the only buyer for your coins may be the dealer from whom you bought them. Not a healthy situation.
One ounce gold coins and bars, from well known mints are very liquid, and have ready markets anywhere in the world. Likewise, one ounce silver coins, or 10 or 100 ounce bars.
Euro Pacific Bank stands ready to make a two way street in precious metals products. We stand behind everything that we sell, and are happy to buy-back any gold or silver product purchased from us.