Whether you’re new to investing in gold or a seasoned pro, it’s good to keep up with the best way to save on your gold purchases. The world of gold buying can be full of facts and figures and contradictory advice. You’ll find tons of personal anecdotes and different recommendations if you look online. How can you know the best way to save?
In this post, we’ll be breaking down the purchasing of low premium gold into something simple and straightforward. If you’re new to this, start with the first point. If you’ve been around the gold buying block a few times, skip ahead to the Saving with Low Premium Gold section.
Low Premium Over Spot
Two of the first terms you’ll hear when looking into buying gold is “premium” and “spot”. A “coin premium” is the additional cost of a bullion coin over the market value of the precious metal within it. The “spot” price is referring to the current market value of the asset in question. For example, take a look at one of the most popular and valuable gold bullion coins on the market. The American Eagle 1 oz Gold Coin from the US Mint is popular the world over. At this time of writing, the current spot price of gold is $1204.50. That means if you were to purchase gold right now for immediate delivery, you’d pay $1204.50 for one ounce of it. But if you look at the price for one ounce of gold in the American Eagle coin, you’ll see it costs $1266.03 for one. The coin premium here is the difference between the spot price and the coin’s total cost. So here, it’s $1266.03 minus $1204.50, making it $61.53.
Why this difference in price? Especially because you can look at three other one ounce gold coins and see that each may have a different premium over spot price. You’re essentially purchasing one ounce of gold right, so shouldn’t they all be the same? Not quite. What you’re paying for here is the manufacturing and creation of the coin. As well, the supply and demand of the coin can have a direct effect on the price.
The important thing is to go into any gold purchase aware of the gold’s spot price.
Saving with Low Premium Gold
One thing to keep in mind is most numismatic coins are worth far more than just the value of the precious metal on its own. But every now and then, it is possible to find certain coins for close to their melt value. If you come across a low premium numismatic coin, you’re looking at two big benefits. First, a growth in the spot price, and second, a growth in the numismatic value.
When gold is at a low point, especially if it is a significant historical low, taking a look at US vintage coins is an intriguing option. Because numismatic coins are finite, there’s always a chance that demand for a certain year or release could spike in value. For example, the gold eagle is released every year. However, the $20 double eagle is no longer being created. If the demand for this specific coin grew, there’d be a huge spike in premium.
Even if a demand like this didn’t occur, the coin’s value could still grow against a stable or weak spot price.
Low premium coins offer an extra hedge than other products. Even better, they provide an excellent opportunity to round out and build your portfolio.
One way to get a lower price is to order a larger bullion product size. You can usually achieve the lowest premium over spot price with the largest privately minted bullion bars. For gold, this would be the one kilo gold bar. For example, if you look at this gold bar available on our site, you’ll see that by purchasing it, you are able to purchase gold as low as $7.22 per ounce over the spot price.
LOW PREMIUM GOLD
Bullion Exchanges is one of the largest and most reliable precious metals retailers in New York City’s Diamond District. We ensure a pleasant and secure retail and online shopping experience. You can purchase this exquisite new coin available to you today online at BullionExchanges.com. We offer free US shipping on all orders over $75 USD. Alternately, complete your purchase of this exquisite coin at our retail store in the heart of Manhattan, at 30 West 47th Street, open Monday-Friday from 9am-5pm EST.