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 Specializing in precious metals, including gold, silver, platinum, bags of US coins, silver eagles, gold eagles,  bars.  Also collectible coins, military medals, swords, autographs, jewelry estate  & new, diamonds, sterling silver flatware & paper money
888 436  6463 (toll free)  or  888 GEM MINE   

 EVERYTHING YOU WANTED TO KNOW ABOUT INVESTING IN PRECIOUS METALS AND THEN SOME!!!!!

                        BY ART ARBUTINE

FORMAT:    The first part of this is information about the author, and his firm,  his economic ideas, and definitions.  If you are interested only in the merits and specifics of  the  different coins, and bullion items,  skip straight to the back pages,  but  you  might want to come back later, and read everything as you should find it informative, and interesting, especially if you are contemplating the purchase of coins and/or silver and gold bullion. 

BACKGROUND:    This  pamphlet was created by Art Arbutine based on his experiences buying,  and selling coins and precious metals since 1963. Art  is  a  retired USAF Master Sergeant,   and a 1971 graduate of the University  of  Tampa, with a Bachelor  of  Science degree,  magna cum laude,  in business, and economics.   He is a life member of  the  ANA (American Numismatic Association),  and many  other  coin,  watch  and jewelry organizations.    Upon retirement from the USAF in 1973 he and his wife Pat founded Belleair Coins Inc.  Art has been a lifelong coin collector, specializing in world crowns, and Spanish Colonial. 

BELLEAIR COINS INC: We are located just north of Saint Petersburg Florida. Besides coins we actively deal in silverware, crystal and china using the name, The Silver Queen Inc. We are strong buyers of all diamonds, pocket and wrist watches, estate jewelry, military items and other collectibles. We are #1 rated by The Jewelers  Board  of  Trade,  and  very  favorably  rated  by  Dunn and Bradstreet, with our annual sales of about $12 million. The numismatic staff includes me,  my three sons, and my brother.  My wife supervises the administration of both corporations.  My two nieces run our retail jewelry department.  We have four in the shipping department; six more who take or process the silver flatware orders.  My two grandsons do odd jobs around the store, and are learning the business.   As a long time coin collector who had limited funds for buying my coins, I often  encountered  the typical old time, impatient coin dealer who wouldn't give you the time of day unless you spent $100 the first five minutes in his store. I vowed that if I ever started a coin shop I would be friendly, patient and understanding  to everyone.   In 1973 I adopted the motto,  Honesty  ***  Integrity  *** Reliability, which all of us try very hard to live up to.  We are very active,  longtime members of two electronic trading networks,  Coinnet for coin and bullion; Polygon for jewelry and diamonds.  This makes us trading  partners  with  about  4000 dealers throughout the world.  We attend many coin, watch, and jewelry shows, and have had bourse tables the past 19 years at the Hong  Kong  International show each September and the same at the Singapore Coin show every February.    We are very competitive, and we know what we are doing,  and can hold our own with anyone.  Those who have dealt with us know we are reliable, honest and can be trusted.   My  oldest  son runs our silverware pattern matching division,  The Silver Queen Inc.,  probably the largest silver pattern matching service in the world.   If you want a price print-out of your silverware, crystal, or china pattern, and/or information on buying or selling silverware, call 800 262-3134 or got to http://silverqueen.com. If you have any questions about the  information written  here,  or if you want to buy, or sell coins, jewelry, watches, etc., call    888 436-6463.    

(End of commercial message.) 

INVESTMENT:  This is a buzzword that sets off alarms.  The Government, particularly the Securities and Exchange Commission, directs all sorts of scrutiny towards all who offer something as "an investment".  Since the title of this is how to invest,  I'd like to clarify what is meant here. We are not offering or recommending any specific item. Our staff has never told anyone they should buy this, or sell that or swap their silver for gold, etc.   The entire purpose of this essay is to give all the facts, as we see them,  and then let you decide if you want to put (invest) your hard earned money in some coins, or precious metals.

RECOMMENDATIONS: We rarely make recommendations but feel strongly that people  should  consider  putting  at  least 5-10% of their investment portfolio  in  bullion coins or other forms of precious metals.   This should  be  considered  a core holding as a hedge against inflation or “insurance” against some sort of financial disaster. Everyone has life insurance which is actually death insurance.  Usually, no one collects unless someone dies.   This is a very uncertain world.  The chances of being hit by a meteor or asteroid are remote, but not impossible.  The nuclear threat has abated somewhat,  and inflation appears to be under control, but remember the national debt is about six trillion dollars. This debt is not a myth.  It is actual, real money owed by the Federal Government to American and foreign individuals, to insurance companies and other financial institutions, foreign governments, and others,  in the form of currency, TBills and Treasury Bonds. No one mentioned will forgive the Government's debt.  They all expect to be paid. At no time in the history of mankind has such massive debt ever been repaid.  The first minute that the public sees inflation raise its ugly head,  they will start buying silver and gold and other hard assets as the  buying power of the dollar starts to diminish.   As this is written, the year 2000 is more than a year and a half away, yet some are buying gold and silver in advance of what they see, as  a  financial  disaster  in the making due to some expected computer foul ups.   The banking system is unbelievably dependent upon computers.    Imagine what would happen if Arab terrorists exploded a crude atomic bomb on Wall Street or if some militant  dissidents  decided to blow up the computers at each Federal Reserve bank,  all at the same time with oil-fertilizer bombs, similar  to the one that exploded at the Federal Building in Oklahoma City. All banks  would  be  closed  indefinitely,  causing a panic so great that bartering with silver coins might be a possibility.  This paragraph is meant to explain the reasons for owning at least some modest amount of silver or gold, not to scare anyone into buying it.

 HARD MONEY: This refers to gold, silver and other precious metals. Our present currency is now backed by Treasury Bonds or Treasury Bills. In other words it is paper backed by more paper, little more than an IOU. The dollars we spend today are not backed by the gold at Fort Knox  or our strategic silver reserves at West Point.    Some circulating paper dollars have a promise to pay the bearers on demand. Pay what?  We use fiat money, which is defined as money unconvertible to coins or specie of equivalent value.    Most hard money people feel that our dollar is near worthless and it's just that no one has caught on to it yet. Hard money  advocates  feel that the national deficit is so great,  the day will come when the government will have to repudiate the  U.S. dollar, renounce the national debt,  and start over again with money backed by silver and gold as it was in the US before the Federal Reserve act  of 1914.   The basic hard money premise is that some day a person will go into a bakery with a silver dime in one hand,  with a $100 bill in the other.  The baker will reject the $100 bill, as it is merely paper and sell the loaf of bread  for that silver dime.  This, of course,  would happen only during a run-away inflation, an event that has occurred at more than 100 times this century in different countries throughout the world. It could happen here.   Many expect it. The first sign that the hard money people might be right would be escalating inflation.

INFLATION:  The average person knows that inflation means high prices, but he doesn't really have a clue as to the reason.   My definition of inflation is a rise in prices  caused by an  increase in  money supply without a corresponding increase in the goods and services, (The Gross National Product).  Example: If you isolate a group of people and give each a dollar and an apple, what price would we expect for an apple? A dollar would be a likely answer.  Give the same group an apple and two dollars.  Then what price? Probably two dollars. Why? Because you have doubled the money supplies,  without a corresponding increase in goods (apples).   Another example is:  If an economy consists of 10 trillion dollars  in  goods and services,  and a government increases the money supply from  ten trillion up to $15 trillion, against no corresponding increase in goods and services, then you will have 15 trillion dollars chasing 10 trillion dollars worth of goods and services,   practically ensuring an inflation rate of about 50%.  For the last 50 years or so, our U.S. Federal Government has been spending more than they have been taking in  (increasing the money supply), causing  inflation,  and the massive national debt.  Inflation makes the dollar worth less and hard assets worth more (more in terms of inflated dollars). Note: June 2002

I  have added an article at the end of my comments,  that you will not likely see anywhere else.  It is thought provoking.

 STORING METALS:   Your 5-10% core holdings against financial  disaster should be stored some place you could get your hands  on them on short notice.   Monitored burglar alarms are incredibly cheap.  Get an alarm system,  and then hide at least some of the metals in your dwelling in some creative location,  difficult for a burglar to find.  If you have  very large holdings, the bulk becomes difficult. You should consider a safe deposit box at a local bank.   A small home safe is a bad idea as crooks will just haul the entire thing away.   The #1 cardinal rule in investing in physical metals is: take possession.  Be careful as there are various financial advisors, and  metals  companies that will store  metals, many of whom have turned out to be common swindlers.  We don't like the idea but there are legitimate firms who will store your goods for a small annual storage fee.  If you go this route, first check out the company thoroughly,  and then  make  sure  none of your metals are  commingled with other investors’ or the company's metals, but are in a secure vault in a box with your name  on  it,  and  cannot  be removed unless you sell or trade the contents.   There are legitimate,  secure institutions like the Bank of Delaware that will store metals for both dealers and the public.   Personally,  I feel that Delaware is too far away and metals should be close at hand. At one time there was a state sales tax on coins  in  Florida,  but not if the coins were stored out of state. Now there are no state sales taxes on US coins or any single purchase of coins or bullion that total $500 or more.  So, there is no  reason to store coins out of state to avoid the sales tax.   

CONFISCATION:  This is a bugaboo that seems to concern many hard money persons.   By executive order of  President Roosevelt  in April  1933, "Persons  are  ordered  to surrender all gold bullion and gold  coins, except those of special  value  to  collectors  or  rare  and  unusual coins.". Intent was to free money that was thought to be stagnating in gold.   The nation was in the middle of the great depression, and this supposedly would stimulate the economy and spur economic recovery.  In those days the people lined up like sheep at the banks,  getting  less than the world gold price for bars and ingots.  At the time a $20 gold coin contained over $21+ worth of gold,  but  the  citizens got only a paper $20 bill. Many of the big banking institutions shipped those $20 gold coins to Switzerland and other European banks where they received the full $21+.  This is a reason that the greatest source for American gold coin has been from the European banks. By another executive order seven months later (after all the gold was confiscated) the dollar was devalued in terms of gold making a  $20 gold  coin  worth about $35 in paper dollars. The citizen who dutifully turned in a $20 gold coin had $20.  The person who didn't had a coin worth $35.00, which was several weeks pay for many.  Do you trust our government more today? Some hard money people feel that if there is a runaway inflation,   the congress might not take the responsibility for all that  deficit spending,  and blame gold hoarders, and demand government confiscation.  Personally I feel that this is an unlikely scenario.   For one thing the government will have a difficult time finding those who own gold, as there are no identification requirements when purchasing gold, and today's citizens will never line up like sheep as they did in the 1930's.   I feel that Government confiscation of coins and  bullion  should  be the least of worries. 

REPORTING LAWS:  Buying your coins or metals:  As previously mentioned there are no ID requirements when purchasing gold or any bullion.  You could buy a million dollars worth of gold bullion  by  personal check, and nothing is reported to Uncle.  The only time you would be required to show ID and social security number when buying metals,  would be if your purchases were $10,000 or more, and you paid by cash or cashier's check or travelers cheques or money orders.  This would be reported to the government as a cash transaction or equivalent of $10,000 or more. There is a government term called "related transactions". A large lump of cash cannot be deposited at one time, and used to spread  purchases over a period of time to circumvent the cash reporting laws.   Dealers are also required to report, "suspicious cash transactions".

SELLING  YOUR  COINS  OR METALS:  If a person sells any or more of the following in a single day, dealers are required to make reports to the Government: 

$1000 face in US silver coins

25 South African Krugerrands 

25 Canadian gold Mapleleafs

25 Mexican gold Onzas 

32.15 ounces of a .995 gold ingot (one kilo)

100 ounces of palladium bars

25 ounces of platinum bars

1000 troy ounces of silver ingots

 Note:  There are no reporting requirements when selling any US gold or silver Eagle bullion coins or any numismatic gold coins US or foreign. Family members can’t split sales to circumvent reporting requirements. The government term, "related transactions" applies here too. The sale of coins or bars cannot  be juggled around to circumvent the reporting requirements.

WEIGHTS  AND  MEASUREMENTS:  As you read through the various described coins you will see the abbreviation "AGW",  and this means Actual Gold Weight.   Any alloy is disregarded, and this is the amount of pure 24K gold contained within the coin. The AGW is expressed in troy ounces as all precious metals are  traditionally bought, and sold in troy weight and occasionally grams.  A troy ounce weighs about 10% heavier than an avoirdupois ounce (an ounce of food, postal letter, etc.).  Except for the US England and a few British Commonwealth nations, the rest of the world uses (metric) grams.  Many European silver and gold bars such as those issued by Swiss Credit are designated in grams, rather than troy ounces.  Some silver bars are offered to the public in grains, leading them to believe they are getting a very large amount of silver.  A few measurements follow:

31.1 grams = one troy ounce

28.3 grams = one avoirdupois ounce

480 grains = one troy ounce

1000 grams = 32.15 troy ounces (a “kilo”)

 CHOOSING A DEALER:   Naturally, since we are in the business of buying and selling coins, we do hope you will choose us.   Americans were not allowed to own gold from April 1933 until Jan. 1975. The average buyer is a bit nervous and inexperienced when it comes to buying bullion. In most large urban areas there are at least several dealers.    The coin business is always very competitive.    Gold and silver  are basically commodity items and as with all commodities,  the dealers have to work close and be very competitive or they won't get much business.    Most people choose a local dealer that they feel they can trust,   and with whom they feel comfortable.   There  are  many  good  bullion  dealers throughout the US who do a lot of business via the Internet, phone and mail,  but the only problem is that one can't  just  walk  around  the corner to make a fast transaction, or straighten out any problems face to face. People should shop around ask around and deal where they feel it is to their best interests.  The local dealer can be a great asset.

 PROMOTING:   Many people are naive and gullible and might fall prey to promoters. When we say "promoting" we are referring to the practice of taking some common numismatic items, or creating a silver bar or such,  and hyping it at very high prices via mail news print, or phone. Among the three types of promoters,  telemarketers are the  absolute  worst! Some offer coins or bullion at skyhigh prices. Others offer good deals but they abscond with your money.   Slick talking phone operators will offer very enticing gold or silver commodity options. If they actually place your order, (most don't),  they hide their enormous  commissions within the option  contract  making  it  unlikely  you will ever see a profit.   Legitimate  commodity  brokers or coin dealers never solicit business on the phone.   If one calls you, hang up immediately.   Most everyone has seen a full page newspaper ad promoting, "America’s First Coins",  or "a horde of recently discovered silver dollars",   or some ingot that looks like a $100 bill, or large hockey puck sized pound or half pound "coins".  These are promoted at enormously inflated prices. Don't  bite!   The third type of promoter is the coin dealer who has a monthly, or quarterly newsletter.   He can't sell the same items every issue,  so he looks for some common coins that are available in  large quantities and then they are hyped as "a unique opportunity", or great potential" or as a  "triple play",  etc.    This type promoter usually prices his material at 20-50% above normal retail. If any promoter has something that really interests you, and you are tempted to go for it, check with  your local commodity brokers  or coin  dealers  for  their opinions.  In fact, it is a good idea to consult with a full-time coin dealer before buying from any sources unfamiliar to you.    There is a major credit card company that currently markets older U.S. gold coins  at double retail, even higher.   You may have seen their advertisement in the airline flight magazines.

         S I L V E R     C O I N S     A N D    I N G O T S 

U.S. COMMON SILVER COINS: These are the coins we used for change until 1964. This category has very little numismatic premium. Their value is the 90% silver content. A slang term for these coins is "junk silver", but dealers usually refer to them  simply  as, "90%".  These are often traded among dealers by the "bags", or "half bags".  The bag refers to $1000  face  value in a cloth bank bag.   This weighs approximately 55 regular pounds, and 720 troy ounces of pure silver.    Dealers usually deduct a few ounces for wear on the coins,  using 715 troy ounces when figuring the troy weight of a "bag of silver".   If silver is $5.00 an ounce, then multiply $5 X 715 to determine the metal (intrinsic) value of the silver in a bag of coins.  During inflationary periods there is usually a great demand for silver coins; then bags are bought and sold at a big premium over the actual value of the silver.  When the demand diminishes, bags trade at or below the silver price and are often sent to the refinery and melted.  Silver coin is an excellent way to invest in silver.  American 90% silver coins are widely recognized, extremely liquid, and can be broken down into small denominations, as small as a single silver dime.    Dealers will always pay higher for bags or half bags, opposed to just a few silver coins at a time.  The only drawback to the silver coins is that they are quite bulky.

 40% SILVER-CLAD HALVES:   These are half dollars dated 1965-70.  After silver  coins were  eliminated in 1965,  Congress  decided,  for  some obscure reason,  to continue a  small  amount  of  silver  in the half dollar. These contain outer layers of 80% silver, bonded (clad) over a core of pure copper. The ASW (Actual Silver Weight) is .148 troy ounce in each coin.  Most all these get melted.   The only advantage of clad halves is the very low risk.  If you pay 65¢ per coin and silver drops below $3.50 the most you can lose is 15¢ per coin. The big drawback is even greater bulk than in 90% silver coins.  Our opinion:  This is not the way to go.

 COMMON DATE U.S. SILVER  DOLLARS:  These are very popular coins.  They contain .77 oz.  ASW,  and almost always have a large premium over the silver content. With silver at $5 an ounce they contain about $3.85 in silver, but often sell for almost double that.   When the silver price shot up during the "gold rush" of 1980, the premium for silver dollars over silver was practically nothing. Why pay a high premium now if you are going to get only the  silver  price  if  silver takes a big jump?

High grade numismatic,  or rare dated silver dollars, were a different story.   They rose dramatically higher as silver increased.    We say, common dollars, no.  High grade or rare date, yes.

 100 OUNCE SILVER BARS:  These are very popular with people who want to buy a lot of silver.  The buy-sell price difference is very small, and the bars are very compact.  A #10 safe deposit box will hold more bars than a person can lift.  Buyers should purchase widely known, accepted brands such as Englehard,  Johnson Mathey, Sunshine  Mining, etc.  Odd brands and older bars that are not exactly  100  troy  ounces  will be discounted when they are sold.  One can also purchase 1000 ounce bars, and they are a bit cheaper than 100 ounce bars, but due to the massive size and weight (about 70 pounds) they are not recommended.

 GENERIC  ONE  OUNCE SILVER ROUNDS OR BARS:  The rounds are always .999 silver and weigh a troy ounce. Silver bars have been minted by various “private mints" and refiners since the middle 1960's.  Many ingots are from the  1965-75 era,  and  have  some commemorative or special event theme and were called "art bars".   At one time these were collectable but  most are now worth only their silver content.  The one ounce bars and rounds are almost always accepted by dealers,  and there have been extremely few problems about weights or fineness. These are especially popular because the premiums over silver are relatively  small,  25-75 cents per ounce.  These are a good buy, if the premium stays this low.

 ONE OUNCE SILVER EAGLE COINS: These are legal tender $1 coins, sold at $1.30 over the silver price by the US Mint only to dealers since 1986. Coin dealers generally sell small quantities retail for $2 over silver and rolls of 20 coins for about $1.75 over. This is a  high premium to pay over the silver price.   Our opinion:   It's nice to own  American silver like the one ounce Eagle coins but if silver rises to $10-15 or more, dealers will likely  not pay more for silver Eagles than generic rounds or ingots, so why pay a big premium now?  However, the Eagle is preferred over all others at times when the premium is very low.  This is based on our observations during the "gold rush" of 1980, and other bullion surges since then.     Note: (June 2002) We have a new, recent article on this website, “Investing in US Eagle Coins”.

 CANADIAN SILVER COINS:  These might be OK for Canadians in Canada, but the American dealers look at them as undesirable 80%  scrap silver.  A dollar's worth of Canadian silver coins,  including the silver dollars is .6 ASW.  The Canadian government also has a one ounce bullion coin, the Silver Maple Leaf, with a $5 face value.  This is recommended only  if you can avoid the very high premiums charged  by  the  Canada Mint.

MEXICAN SILVER COINS: This includes the government issued "Onzas", 100 Pesos, and Libertads.   Some of these are actually popular in southern California, Texas, and Arizona but generally fall into the undesirable category at most coin shops.  The one ounce Libertad is one troy ounce of pure silver, and is usually sold around the price of common generic rounds.   The other coins are .900 and .720 fine silver.  Promoters do  occasionally hype some Mexican issues,  but  unless  you  really  like Mexican coins, stay away. 

STERLING SILVER MEDALS AND BARS: These were issued by "private mints", and some sets of these have interesting themes such as space,  trains, planes, automobiles, guns, etc.  A few actually have a small collector value,  usually very small.  The vast majority are melted.    Sterling silver is 92.5% silver, 7.5% copper. When silver makes a fast move up,  all the  refineries  become overloaded, and the prices dealers pay for sterling silver is greatly discounted.   This has happened as recently as April, 1998 when silver rose from about  $5 to  $7 in a few months.   If you love trains, find a set of, "Famous Trains" ingots,  then it is a good investment.  Otherwise, buy coins or widely recognized forms of .999 silver.

             G O L D    C O I N S    A N D    I N G O T S 

The US gold one troy ounce “Buffalo” was released in June 2006 to compete with the Canadian Maple Leaf and other pure gold coins.  It is the first ever American coin that is .9999 pure gold.  When these were first released it seemed “everyone” wanted some.  This was written three months later and there since we have seen no great demand for the buffalo over any other.  There are no fractional Buffaloes and none planned.  They are available only in the one ounce size.  We see no great advantage to owning this over any other one ounce gold coin.  Our advice is still to buy the gold coin that has the smallest premium over the gold price

SOUTH AFRICAN KRUGERRAND: This 22K gold coin contains an ounce of pure gold and is alloyed with approximately 1/10 ounce of copper.  It is no longer produced, but there are millions in the U.S.    Most all are in mint condition, and the dates on the coins mean nothing.  This coin is very popular, because it is universally known and sold at the smallest fraction over the gold price.  Because of a low premium this is a good buy. 

U.S.GOLD EAGLE: When the government created this $50 gold coin in 1986 it was meant to compete with the Krugerrand,  so they made it the same physical size, same fineness.   The  only  difference  was to add a 3% silver alloy which gave the coin a more golden look as  opposed to the coppery-gold appearance of the Krugerrand.   The government sells gold Eagles only to big dealers (distributors) at  3% premium over the gold price. Fractional Eagles are also available, but sold at a much higher premium and are recommended only for gifts & jewelry. Eagles generally sell for about $12.00 higher than the  Krugerrand, but some of that is usually recovered when selling back to the dealer.  Personally, I'd go for the cheaper gold because if gold does go up, and people react like they did in 1980, an ounce of gold will be an ounce of gold and no one will care what it is. Some favor the Eagle over the Krugerrand because they feel the Krugerrand would be subject to possible confiscation but the gold Eagle, a legal tender coin, would not.  I'm a skeptic to this theory. 

U.S.$20 GOLD COIN: This .900 fine gold coin contains .9675 AGW and was last made in 1933.  The numismatic value varies greatly due to demand, availability, condition, and the price of gold.  In 1980 when gold was very high, common $20's sold at just a little over the gold price.  In 1998, with gold at about $270, the premiums over gold are almost $150. Though this contains about an ounce of gold, it is really a numismatic item, and not recommended for those who just want to own gold.   These have a strong appeal to collectors and have been a good investment for many.  Not recommended here, though, unless the premium gets very low, then they are a "best buy".  If it ever gets to where $20’s and Eagles are about the same price definitely buy the $20 gold coin.  June 2002: this theory has  proven  itself  correct.    When this was written the premiums on common $20 gold coins was about $150 per coin.   Now it is about $30, just on a small rise in gold.

 CANADIAN  GOLD MAPLE LEAF:  This 24K, $50 face value coin contains one ounce of .9999 gold.  It sells for about the same price as the US gold Eagle and is very popular in the orient and places where people prefer  fine  gold.   This, the Eagle, and Krugerrand are just about a toss up as to the best way to go.  Buy whatever is the cheapest.

 AUSTRIAN OR HUNGARIAN 100 CORONA: These are .900 fine gold, .98 oz AGW coins.   Austrian or Hungarian coins have the exact same physical size and content.   Both are official government restrikes, made many years since 1908 or 1915.  There is nothing wrong with the coins but the odd size, .98 oz, makes it hard to figure the gold value.  Not recommended unless you can get them below their actual gold value. 

CHINESE  ONE OUNCE PANDA:  This is a large 24K one ounce gold coin, no alloy, made since 1982. The Chinese change the designs of the Panda on the coins each year giving some of them considerable numismatic value. In fact,  many Americans bought one every year to get each new design. The first issue, 1982,  was selling for over $2000 and the premium for even the common Pandas was $50 or more. Then the June 1989 massacre of the dissident Chinese students in Tiananmen Square ended popularity of the Panda gold coins,  and now most trade just a little over the  gold price.  The 1982 date and few others still have some numismatic value. Pandas are a good deal if they can be found at a low premium.

 MEXICAN 50 PESO:  This .900 fine gold coin was widely bought & sold in the U.S. before  1975 when it was not legal for Americans to own gold. The AGW is an oddball 1.205 troy ounces.  They are somewhat popular in Texas, California, and Arizona.   Occasionally the Bank of Mexico buys these coins at a premium.    Because of odd weight and the fluctuating premium, most buyers will avoid this coin.   No one likes the odd-ball weight.  Only recommended if really dirt cheap.

OTHER GOLD COINS: There is no shortage of selections here. You can buy any of the following gold coins:  sovereigns,  rubles,  ducats,  lire, francs, rands, marks, shillings, etc., etc.  Many of these coins are a promoter’s dream.  They have old dates and a lot are very available in quantity in uncirculated condition.   Take the Russia five rouble gold coin as an example:   It is circa: 1897,  and almost  always  found in uncirculated condition and can be bought a little over the gold price. Promoters get them slabbed,  (Graded by a grading service),   and then promote them at inflated prices  because they are choice uncirculated, even though most come uncirculated and no one cares.  If you can get a good buy on any world gold coins, go for it.   Be cautious buying gold coins at the flea markets, auctions  or from strangers.   Counterfeits are not usually a great problem among dealers, but they exist.  If you are offered "deals" check with a coin expert before buying.

 GOLD BARS:   Swiss Credit and some American refineries make die struck .999 gold bars that have certificates matching the number on the bars. It's a little more risky buying bars as opposed to one ounce coins, as some bars can be tampered with rather easily. The premium on gold bars is generally a little more than the Krugerrand, and a little less than  Eagles or Maple Leafs. Stick with coin unless the bars are real cheap.

           P L A T I N U M     A N D     P A L L A D I U M

 PLATINUM  COINS:  There are four to choose from:  the new US $100 face  platinum  Liberty coin, the Canadian platinum Maple Leaf,  Isle of Man Noble, the Australian Koala, and a couple others.  They all contain an ounce of pure platinum.   The Isle of Man Noble is currently about $10 cheaper than the other three, and would be my choice,  just because it is cheaper, but it's a toss up.    Russia supplies most of the world's platinum.  Production and distribution are seldom stable. The price of platinum fluctuates much more than gold or silver,  and  buying  it is usually more speculative than the other metals.

PLATINUM  BARS:   Several refineries make high quality, ounce platinum bars, die struck, serially numbered with certificates.     Some sell a little higher than others, why, I don't know. If the premium is higher on the coins, we recommend the cheapest bars.

 PALLADIUM:  This metal seems to be almost completely controlled by the    Russians. Shipments are often withheld; contracts are delayed; and the situation is often unstable. Palladium rose dramatically above gold in May of 1998,  (the first time in history), and almost caught platinum.  This is an industrial metal.  Its  main  consumption  is  in catalytic converters with a few  applications  in dental alloys, and in jewelry. Don't even think about it.

 CONCLUSIONS:  If you are thinking of buying just bullion, consider the advice offered here;  use common sense; then buy something with a very low (or the lowest) premium over the metal price.  If you are thinking of buying numismatic coins,  then disregard the metal content  and buy something really collectable.  During the  "gold rush"  of  1980,  the demand for rare numismatic coins was great;  prices sky rocketed.  The same was not true with common coins with some bullion content and some collectors value. Example: Take a typical coin hyped by promoters as a "triple play". The coin has, (1) $5 silver content, (2) $4 face value, (3) $5 numismatic value. Thus the "triple play".    If you were to buy this coin for $10 and the silver price doubles,  the  numismatic value will be absorbed and the coin will still be worth only $10. EVERY coin like this became scrap silver as metals  increased  during  the  "gold rush" of 1980,  and it is my opinion one should avoid coins like this, unless you enjoy collecting them.   Buying metals is like shopping for anything. Learn all you can about what you are buying. Shop around and then make an intelligent decision.   

Addendum:    The preceding was written in 1998, and little has changed as to my advice on what to buy, however since the Twin Towers tragedy, the threat of terrorism is very real, not  just  theoretical  as I had speculated a few years ago.  In  recent  years  I have told people who asked that I didn’t think there was any great reason to put money into metals,  as that market has been dormant for the longest time;   there was little inflation; people throughout the world seemed happy to just own US $100 bills. The fundamentals for buying metals at the time were just not there.   Several  weeks  after  9-11  I  announced on a major electronic trading network that I have changed my mind, and  the basic fundamentals for owning metals are in place.  Since then gold has gone up about $60 an ounce. The “War on Terrorism” isn’t going to be cheap.    Our role as policeman of the world has expanded.  Where  is  the money coming from, to fight the war on crime,  the war on drugs,  the war on poverty, and other Federal projects?    These are all budget  drainers and  sure  to cause inflation,  which  means  to  protect yourself you should now seriously consider purchasing precious metals  as  a  hedge  against upcoming inflation.

Art Arbutine, June 2002