Find the Best Deals in Physical Gold
By Jeff Clark
When gold breeched
$1,000 an ounce this February, the mass media
was full of reports of unprecedented coin demand
and long wait times for bullion buyers. You
couldn't open the paper without seeing a piece
about the gold rush.
Although the press has now set gold aside for
hotter stories, I can tell you demand for gold
coins continues at unprecedented levels
worldwide, and production is still struggling to
keep up. Take a look at these reports from the
past 30 days:
* Sales of the
Austrian Philharmonic gold coin soared 544% in
the first two months of 2009 (vs. the same
period the year before), with production at the
country's mint running quadruple its usual
* The demand for Krugerrands is at its highest
level since 1986. The South African refinery
recently doubled production of blank gold coins
to 20,000 ounces per week.
* China, now the fastest-growing market for
gold, saw 2008 sales (measured in dollars) rise
by 50% over the year before – and total sales in
January 2009 were one billion yuan (US$146
million), 30% more than all of last year.
* The U.S. Mint sold 193,500 one-ounce gold
Eagles in the first seven weeks of 2009 –
equaling the number shipped in all of 2007 and
about matching the first half of 2008.
* Russia's Sberbank says it has "never seen such
strong demand for investment coins."
With this incredible interest in gold, it's
worth a fresh look at where to go for the best
deals in bullion... and what the wait times and
premiums are. Here are the dealers that have
consistently treated their clients (and our
readership) well over the years:
Kitco (Kitco.com; 1-877-775-4826). All bullion
products are available at Kitco and can be
shipped within 24-48 hours of a paid order.
Premiums are slightly higher than our other
dealers recommended below, but what's
particularly attractive at Kitco is that you can
get silver for less than 1% over spot... Its
pool account is currently charging only 14 cents
over spot (premium fluctuates daily), which is a
great way to build your silver holdings while
waiting for physical premiums to come down.
The Coin Agent (thecoinagent.com;
1-888-494-8889; firstname.lastname@example.org). Wayne
Lemonier currently offers immediate delivery on
paid orders for all gold coins except the Eagle,
which takes two weeks.
Premiums for gold coins are 6% over spot for
Maple Leafs, 6.5% for Philharmonics and
Krugerrands, and 7% for Eagles (one of the
lowest in the industry).
Silver bars are at the lowest premium we know
of: A 10-ounce silver bar costs $1.75 per ounce
over spot, and 100-ounce bars are only $1.50 per
ounce over spot. American silver Eagles are spot
+ $4.50, and silver Canadian Maples are spot +
$4. Shipping and handling for silver is $20 per
Border Gold (bordergold.com; 888-312-2288 ext.
7). Both gold and silver Maple Leafs are readily
available and can ship the day an order is paid.
Border told us premiums are slightly higher this
year than last because the Royal Canadian Mint
raised its prices.
Premiums on gold Maple Leafs are only 5.5%, one
of the lowest in the industry. Shipping and
insurance is $25 for one or two coins. A
one-ounce gold bar is spot + $25; 5-ounce and
10-ounce bars are available in limited
quantities at spot + $22 per ounce.
The one-ounce silver Maple Leaf is $4 over spot
for up to 99 coins and then $3.25 per coin. Both
10- and 100-ounce silver bars cost $2.50 above
spot, with the 100-ounce silver taking a week to
ASI (assetstrategies.com; 1-800-831-0007). Gold
Maple Leafs, Philharmonics, and Krugerrands can
be shipped immediately upon a paid order, with
American Eagles currently taking about three
One-ounce gold coins are 7.5% to 8% over spot;
Eagles are 8.5% to 9%. One- and 10-ounce gold
bars can be had at 6%. One-ounce silver Eagles
are $4.30 over spot. A 100-ounce silver bar is
$2.20 per ounce, and a one-ounce bar is spot +
$2.50. Costs for junk silver vary but average
about $2.20 per ounce over spot.
Some of our readers ask... why don't we
recommend any of the larger dealers?
Availability and premium are the primary
considerations in selecting a bullion dealer.
Some of the larger houses may match the prices
of our recommended dealers; however, there's an
intangible issue: the hard sell.
Many of the big dealers push high-margin
numismatic coins. So while you may get good
prices and delivery on your bullion coin, beware
the salesman who begins talking up rare coins.
You won't experience this with our smaller
dealers, and it's this no-hassle service that
gets our business. If you start to hear, "Hey,
my friend, I have a great deal right now on a
rare Swiss coin...," you might want to
reconsider where you shop.