Part 1 – Bright and Shiny Gold Commercials
We’ve all seen the ads on TV, sprinkled in between news programs. We are dazzled by stacks of gold coins piled on a table. The camera pans across an array of detailed, impressive color brochures. A minor celebrity you may have seen on an 80’s TV program comes on the screen and begins talking about the necessity of owning gold during these uncertain times. ‘You don’t want to miss out, so call this number right now and we’ll send you a free brochure!’
Before digging in, I will say that there are definitely some fine, upstanding coin dealers in the industry. There are, of course, the handful of “bad players” that have soured many people’s appetite for gold and silver investment out there as well.
The companies that you see on TV are able to afford these extremely expensive ads during prime time because they are doing one of two things. They are either charging a higher premium over the spot price for gold and silver bullion than would be typical with other bullion dealers, or their salespeople have been told to push their clients into “collectibles” or “numismatic” coins. Those coins, by their very nature, carry a higher premium than bullion products. That higher premium is charged at the time of sale, but may not follow with the item at the time when the consumer would like to liquidate. Salespeople on commission will make higher margins on these collectible items. We would advise people who are not coin collectors to insist on getting the lowest priced bullion coins and bars that they can and reject offers to buy into high premium coins.
For example, in the past, proof gold eagles have brought a higher premium over the spot price, for both buying and selling. Many dealers will talk people into these coins because their profit margins are higher when they sell these items. However, the collector market has softened dramatically over the past few years, as people have less discretionary income. Therefore, if you paid a high premium for a proof gold eagle 4 years ago, even with the 32% increase in the gold price since then, you may have only broken even on that purchase since the buy-back market on those proof coins has come down so much recently.
We encourage our clients to always do their research and price compare. It is very easy to look up coins on the internet and see what some of the online dealers are charging. With that being said, most published prices online are the dealers SALE price, not their buyback price. There is always a difference.
If you have questions about pricing and are thinking of buying gold and silver or selling coins you already own, please give us a call to check and see if what you are being told is reasonable.
We don’t publish our prices on our website since we don’t have an online purchasing platform, but we are always here as a resource for questions. Our firm has a no pressure approach and no one here is a commissioned salesperson.
Please give us a call if you have any questions about pricing at 602-840-5500. You can also email us at info@apmaz.com
If you are receiving this, you are most likely already an existing client of ours and are probably aware of this information. The people who really need to see this 5 Part Series of articles are your family and friends who may have mentioned that they are interested in gold and silver. Please consider sharing this with them.
Stay tuned for our next piece Part 2 – What You Need To Know About Precious Metals IRAs.
All my best,
Courtney Svendsen
-Jerry Williams’ daughter and APM Inc. owner since 2013. Proudly taking over writing the news people need to know as it relates to precious metals.