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Old 04-22-2014, 12:00 AM   #1
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Price question: 1/20 oz coin vs 1 oz coin

I'm looking to buy some more gold for my collection and would like to buy some smaller weight pieces. In particular I was looking at the Canadian Maples and when I compared the price I would be paying much more for 1 oz of gold buying smaller coins then larger coins.

At current spot price Apmex is selling 1 oz coins at about 1350 USD.
http://www.apmex.com/product/9/1-oz-...af-random-year

Their 1/20 oz coins (which I should need 20 of to make one oz) is ~90 USD per 1/20 oz which for 1 oz comes to a total of 1800.

Since gold is gold shouldn't they be the same price or am I missing something or doing something silly?

My main purpose for gold is as a backup if our paper currency fails. I feel it would be easier to use smaller denominations of gold vs larger ones.
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Old 04-22-2014, 03:49 AM   #2
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You are missing the fact that whether anyone sells 1oz or 1/20oz, the overhead and related costs are roughly the SAME PER COIN. Therefore, the smaller the coin, the higher the premium percentage.

To look at it in a different way, if you had to drive 50 miles to a job site, would you accept the same RATE PER HOUR for a 1 hour job as you would for an 8 hour job?
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Old 04-22-2014, 05:07 AM   #3
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Thanks for your reply. Then why would I be able to buy 24 Karot gold jewelry at spot price? Wouldn't it take a jeweler more time to create a necklace then a machine to press some gold into a coin?
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Old 04-22-2014, 06:29 AM   #4
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Premiums are always higher on smaller weight units. It's the same with premiums on silver bars too. 100ozt bars have lower premiums than 1ozt ingots.
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Old 04-22-2014, 07:38 AM   #5
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Originally Posted by mazztech View Post:
Thanks for your reply. Then why would I be able to buy 24 Karot gold jewelry at spot price? Wouldn't it take a jeweler more time to create a necklace then a machine to press some gold into a coin?
Jewelry has a very high mark up regardless of gold content. In the U.S. the normal mark up is 70%!
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Old 04-22-2014, 05:53 PM   #6
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...

Today I paid $145 each for (2 pcs) 1/10th oz Gold Eagles, or roughly 4.7% over spot at my "other" LCS (better prices but further away).

I priced out his 1 oz Gold Eagles, he wanted $1445, so the 1/10ths were almost surely as good as I will get (low premium).

***

My "main" LCS owner told me there is continuing talk about the US Mint stopping the 1/10ths (apparently the dies wear just as fast for the 1/10 as much as the 1 oz). Anyone here have any knowledge or insight on this?
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Old 04-23-2014, 06:35 AM   #7
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I haven't heard anything about that, but if they run out of gold, they will have to halt production (again).
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