PCGS Gold Coin Dealers Competing With Surging Bullion Values Posted by Brian Ford on February 10, 2014
Many of the gold coins listed on the Professional Coin Grading Service’s (PCGS) web site have been revalued at higher prices recently but according to many dealers competition remains fierce between the certified gold coin market and the gold bullion market. Both sides of the physical gold market suffered severe losses in 2013, and both have high hopes for 2014 as U.S. debt climbs and the Federal Reserve continues to taper quantitative easing in preparation for higher interest rates.
“Lots of today’s gold investors are first-timers, and they don’t really know about or understand the certified gold coin market,” said CGE analyst Brick Johnson. “People imagine a safe full of bullion bars and in some cases that mental imagery hurts them.”
Johnson says CGE’s stance is that investors who want a short-term gold investment should select bars or bullion coins because they carry the lowest premium and are most likely to provide short-term gains, but investors who bought gold bullion in 2011 at $1900 per ounce now face the options of selling at a loss, trading for PCGS coins or holding the gold longer.
“We never recommend certified coins for investors who tell us they plan to sell in less than one year,” Johnson said. “If you plan on keeping your gold for 3, 5, 10 years or more then you might do better financially with certified gold coins.”
Indeed, investors who bought PCGS gold coins like the MS61 Liberty or the MS62 Saint Gaudens at the same time as investors who bought gold bullion at $1900 per ounce have lost less money percentage-wise than their bullion-buying counterparts. “We’re a very customer service-oriented organization, all the way down to the fact that our brokers don’t receive commission-based pay,” Johnson said between calls from clients.
“We’ll do whatever the client wants but historically you’re better off financially with bullion if you’re a short-term investor, but the longer you hold the gold the better chance you have at outperforming bullion with common-date certified coins.”