Is Graded gold worth acquiring?

[doctorgolden]

Hi folks,

It's been a while since I last posted. Have a question for the seasoned ones amongst us here. 

I am definitely a 'stacker' and not one to flip - I'm buying PM to hold on to and to help preserve my family's wealth. At the moment, I only buy bullion grade gold/silver. I'm not a collector and certainly don't dabble in proof coins. My question is around Graded coins though - are they worth buying? I've had a dealer on the phone saying how they deliver higher returns compared to bullion grade coins. I've seen there is a significant different in the cost of Graded vs Bullion grade. But is it worth it? 

Related question - has anyone ever had any dealings with https://buy-bullion.co.uk/ (based in London)? 

Many thanks.

[Pete]

Sounds like a call from the likes of Harrington or Rosland.
They are selling no differently to the timeshare people promising value and great long term returns.

Personally I would stay clear of graded coins because the added value is only what someone else will pay.
Probably entail selling at an auction and once big fees are covered .....

I made the error of valuing proof gold above bullion gold and bear the scars so I can only assume graded coins ( unless rare collectible ) will be much the same. Others may disagree so my advice is be careful jumping in with wide open eyes.

Edited November 4, 2022 by Pete
typos

[GBStacking]

I'm a pure stacker myself, the only graded coins I have literally been acquired by chance as part of bulk second-hand orders. I would say that it's entirely possible that graded coin may return more than standard bullion. I would advise a great deal of caution with anyone trying to tell you they are a dead cert investment. If you buy the wrong series or the particular coin you have falls out of favour, then you could stand to lose quite a hefty chunk. 

[doctorgolden]

1 minute ago, Pete said:

Sounds like a call from the likes of Harrington or Rosland.
They are selling no differently to the timeshare people promising value and great long term returns.

Personally I would stay clear of graded coins because the added value is only what someone else will pay.
Probably entail selling at an auction and once big fees are covered .....

I made the error of valuing proofs gold above bullion gold and bear the scars so I can only assume graded coins ( unless rare collectible ) will be much the same. Others may disagree so my advice is be carful jumping in with wide open eyes.

Thanks Pete, really appreciate your response and you sharing your experience. 

[doctorgolden]

2 minutes ago, GBStacking said:

I'm a pure stacker myself, the only graded coins I have literally been acquired by chance as part of bulk second-hand orders. I would say that it's entirely possible that graded coin may return more than standard bullion. I would advise a great deal of caution with anyone trying to tell you they are a dead cert investment. If you buy the wrong series or the particular coin you have falls out of favour, then you could stand to lose quite a hefty chunk. 

Thanks GB.

[Shep]

2 hours ago, doctorgolden said:

I've had a dealer on the phone saying how they deliver higher returns compared to bullion grade coins.

Oh yes they certainly do…..for the dealer that is.

[dicker]

Not heard of “Buy Bullion”, which is a surprise as I do look around for dealers a fair bit.

Q- Is graded gold worth it?

A - Depends on what you are looking for.  
 

If your are stacking, it makes little sense to pay a premium for graded bullion

If you are a collector (Say of Sovs) then maybe. I really dislike buying graded coins but sometimes something comes up that is graded and too good to pass up.

As always, but the coin, not the grade!

 

 

 

 

[Stuntman]

My advice to you would be to keep it simple and just stack the raw gold coins at low premiums versus spot.

My advice would perhaps differ if you were a collector, but even as a collector I think it depends on (a) the particular coins in question and (b) your own personal aesthetic preferences.

Good luck either way.  

[MonkeysUncle]

I stick with bullion. You know with a level of certainty that a gold coin is quickly disposable of to a dealer for spot price or thereabouts if you need money in a hurry.

Your shiny proof or graded coin will cost you more and probably fetch no more than the bullion in the above scenario. You need time to find a collector who wants it to stand any chance of recovering your premium.

That's my tuppence worth!

[sovereignsteve]

When you are talking about graded coins, you are generally going down the collectable market. Like all things collectable, some go up in price, some don't. It depends entirely when you buy and at what price.
During the last 6- 8 years or so, some graded coins have made a healthy profit. We seem to be off the peak in general but historical graded coins continue to rise. The graded modern proof area certainly seems to have cooled substantially after the pumped-up period of a year or two ago.

It is a risky thing to buy already graded coins unless you have a good understanding of what you are buying.

[Silverlocks]

5 hours ago, doctorgolden said:

Hi folks,

It's been a while since I last posted. Have a question for the seasoned ones amongst us here. 

I am definitely a 'stacker' and not one to flip - I'm buying PM to hold on to and to help preserve my family's wealth. At the moment, I only buy bullion grade gold/silver. I'm not a collector and certainly don't dabble in proof coins. My question is around Graded coins though - are they worth buying? I've had a dealer on the phone saying how they deliver higher returns compared to bullion grade coins. I've seen there is a significant different in the cost of Graded vs Bullion grade. But is it worth it? 

Related question - has anyone ever had any dealings with https://buy-bullion.co.uk/ (based in London)? 

Many thanks.

In my opinion . . .

Graded coins likely have already had most of the value extracted by the vendor - generally folks only get coins graded when they think they can improve the value of the coin by doing that.  You're really buying into numismatic value, which means you're buying way above spot, much like you get with proof coins, which means you've got significant downside risk and potential issues with liquidity.

My two bob worth* on numismatics is that the high premiums on coins with numismatic value (rare, graded, proof or whatever) means that you're really in the business of understanding the collectibles market to make some call as to whether it's worth paying the premium.  Unless you're actively collecting rather than stacking, I'd say that sort of coinage is really for speculation rather than storage of wealth.  

For stacking, I think you need to keep an eye on the liquidity of what you buy.  It may be possible to make a few bob on trading in collectibles of one sort or another, and a number of folks here on TSF make a hobby/side hustle of wheeling and dealing in PM's.  However, if you needed to shift £20,000 worth of rare proof coins or slabbed MS66 Young Vic shieldbacks in a hurry you'd be at risk of taking a bath on the premiums.  

TL;DR: collectibles and numismatics are fine to wheel and deal in, but somewhat risky as a store of wealth.

* Note that I am not a financial adviser, nor do I play one on TV.  This is purely opinion and I encourage you to do your own homework and make your own decisions.

Edited November 4, 2022 by Silverlocks

[GoldDiggerDave]

7 hours ago, doctorgolden said:

Hi folks,

It's been a while since I last posted. Have a question for the seasoned ones amongst us here. 

I am definitely a 'stacker' and not one to flip - I'm buying PM to hold on to and to help preserve my family's wealth. At the moment, I only buy bullion grade gold/silver. I'm not a collector and certainly don't dabble in proof coins. My question is around Graded coins though - are they worth buying? I've had a dealer on the phone saying how they deliver higher returns compared to bullion grade coins. I've seen there is a significant different in the cost of Graded vs Bullion grade. But is it worth it? 

Related question - has anyone ever had any dealings with https://buy-bullion.co.uk/ (based in London)? 

Many thanks.

 

"but is it worth it?"........To whom? You really need to understand the market,  and regardless of the topic if someone is calling you you really need to wake up to the fact they might have their own agenda I'm sure someone could easily say that about double glazing they want you to buy. 

 

 

[MonkeysUncle]

Sorry, my brain now has an image of Harrington & Byrne trying to knock out limited edition proof uPVC double glazed units...

[Foster88]

My advice, if you’re looking to buy a particular coin that’s already graded is to see what they are selling for. Search past sold prices and auction results are a good place to start.

Always do your research first.

As others have said, prices will always fluctuate and some will do better then others over time.

[gji25]

8 hours ago, doctorgolden said:

Hi folks,

It's been a while since I last posted. Have a question for the seasoned ones amongst us here. 

I am definitely a 'stacker' and not one to flip - I'm buying PM to hold on to and to help preserve my family's wealth. At the moment, I only buy bullion grade gold/silver. I'm not a collector and certainly don't dabble in proof coins. My question is around Graded coins though - are they worth buying? I've had a dealer on the phone saying how they deliver higher returns compared to bullion grade coins. I've seen there is a significant different in the cost of Graded vs Bullion grade. But is it worth it? 

Related question - has anyone ever had any dealings with https://buy-bullion.co.uk/ (based in London)? 

Many thanks.

Short and simple imo  NO

[LawrenceChard]

10 hours ago, doctorgolden said:

Is Graded gold worth acquiring?

Hi folks,

It's been a while since I last posted. Have a question for the seasoned ones amongst us here. 

I am definitely a 'stacker' and not one to flip - I'm buying PM to hold on to and to help preserve my family's wealth. At the moment, I only buy bullion grade gold/silver. I'm not a collector and certainly don't dabble in proof coins. My question is around Graded coins though - are they worth buying? I've had a dealer on the phone saying how they deliver higher returns compared to bullion grade coins. I've seen there is a significant different in the cost of Graded vs Bullion grade. But is it worth it? 

Related question - has anyone ever had any dealings with https://buy-bullion.co.uk/ (based in London)? 

Many thanks.

9 hours ago, Pete said:

Sounds like a call from the likes of Harrington or Rosland.
They are selling no differently to the timeshare people promising value and great long term returns.

Personally I would stay clear of graded coins because the added value is only what someone else will pay.
Probably entail selling at an auction and once big fees are covered .....

I made the error of valuing proof gold above bullion gold and bear the scars so I can only assume graded coins ( unless rare collectible ) will be much the same. Others may disagree so my advice is be careful jumping in with wide open eyes.

9 hours ago, GBStacking said:

I'm a pure stacker myself, the only graded coins I have literally been acquired by chance as part of bulk second-hand orders. I would say that it's entirely possible that graded coin may return more than standard bullion. I would advise a great deal of caution with anyone trying to tell you they are a dead cert investment. If you buy the wrong series or the particular coin you have falls out of favour, then you could stand to lose quite a hefty chunk. 

7 hours ago, Shep said:

Oh yes they certainly do…..for the dealer that is.

6 hours ago, dicker said:

Not heard of “Buy Bullion”, which is a surprise as I do look around for dealers a fair bit.

Q- Is graded gold worth it?

A - Depends on what you are looking for.  

If your are stacking, it makes little sense to pay a premium for graded bullion

If you are a collector (Say of Sovs) then maybe. I really dislike buying graded coins but sometimes something comes up that is graded and too good to pass up.

As always, but the coin, not the grade!

6 hours ago, Stuntman said:

My advice to you would be to keep it simple and just stack the raw gold coins at low premiums versus spot.

My advice would perhaps differ if you were a collector, but even as a collector I think it depends on (a) the particular coins in question and (b) your own personal aesthetic preferences.

Good luck either way.  

5 hours ago, MonkeysUncle said:

I stick with bullion. You know with a level of certainty that a gold coin is quickly disposable of to a dealer for spot price or thereabouts if you need money in a hurry.

Your shiny proof or graded coin will cost you more and probably fetch no more than the bullion in the above scenario. You need time to find a collector who wants it to stand any chance of recovering your premium.

That's my tuppence worth!

5 hours ago, sovereignsteve said:

When you are talking about graded coins, you are generally going down the collectable market. Like all things collectable, some go up in price, some don't. It depends entirely when you buy and at what price.
During the last 6- 8 years or so, some graded coins have made a healthy profit. We seem to be off the peak in general but historical graded coins continue to rise. The graded modern proof area certainly seems to have cooled substantially after the pumped-up period of a year or two ago.

It is a risky thing to buy already graded coins unless you have a good understanding of what you are buying.

5 hours ago, Silverlocks said:

In my opinion . . .

Graded coins likely have already had most of the value extracted by the vendor - generally folks only get coins graded when they think they can improve the value of the coin by doing that.  You're really buying into numismatic value, which means you're buying way above spot, much like you get with proof coins, which means you've got significant downside risk and potential issues with liquidity.

My two bob worth* on numismatics is that the high premiums on coins with numismatic value (rare, graded, proof or whatever) means that you're really in the business of understanding the collectibles market to make some call as to whether it's worth paying the premium.  Unless you're actively collecting rather than stacking, I'd say that sort of coinage is really for speculation rather than storage of wealth.  

For stacking, I think you need to keep an eye on the liquidity of what you buy.  It may be possible to make a few bob on trading in collectibles of one sort or another, and a number of folks here on TSF make a hobby/side hustle of wheeling and dealing in PM's.  However, if you needed to shift £20,000 worth of rare proof coins or slabbed MS66 Young Vic shieldbacks in a hurry you'd be at risk of taking a bath on the premiums.  

TL;DR: collectibles and numismatics are fine to wheel and deal in, but somewhat risky as a store of wealth.

* Note that I am not a financial adviser, nor do I play one on TV.  This is purely opinion and I encourage you to do your own homework and make your own decisions.

2 hours ago, GoldDiggerDave said:

"but is it worth it?"........To whom? You really need to understand the market,  and regardless of the topic if someone is calling you you really need to wake up to the fact they might have their own agenda I'm sure someone could easily say that about double glazing they want you to buy. 

2 hours ago, Foster88 said:

My advice, if you’re looking to buy a particular coin that’s already graded is to see what they are selling for. Search past sold prices and auction results are a good place to start.

Always do your research first.

As others have said, prices will always fluctuate and some will do better then others over time.

1 hour ago, gji25 said:

Short and simple imo  NO

You have been given good advice by everybody there.

I would recommend you read this first:

https://www.chards.co.uk/blog/advice-guide-for-uk-bullion-investors/1041

There are a number of sales-focused "dealers" out there. They seem to be very successful, but employ experienced, trained salespeople whose main interest is earning themselves fat commissions. Most of them will not give you advice which is good for you. Some of them operate "bait and switch", this involves drawing you in with a seemingly good value offer, before talking you out of it, and doing a hard sell on you to buy higher premium stuff which they make much more profit on. "Bait and switch" is unethical, and possibly illegal. Many salesmen will tell you lies to get you to part with your money.

For once, I won't comment individually on any of the 3 dealers mentioned, but I don't think there's much difference between any of them.

😎

Edited November 4, 2022 by LawrenceChard

[SidS]

All I've got to say about buying graded coins is, buy the coin, not the slab.

Graded coins can appreciate in value (they can also go nowhere or even backwards). The weird obsession with population comparisons, finest known and CACs and rarer holder types, is totally there to manufacture 'rarity' to drive up prices and should be avoided at all costs.

For those who collect US coins, I'm sure the whole extra raft of series speciality strike types adds even more layers of 'rarity' to push prices even further: micro varieties, double strikes, full bell lines, full heads, full bands, full steps - and can you see the statue of Lincoln sat inside the Lincoln memorial on the cent?

Edited November 6, 2022 by SidS

[Chorlton]

For graded coins you need to understand what you are buying and get them for a good price. Also best to go for the highest grade as anything less quickly becomes close to an ungraded equivalent and harder to sell on. The benefit and drawback of graded coins is you know what you are getting but may not learn much from the process. That being said a good graded coin is useful as a point of reference for assessing ungraded coins.

[doctorgolden]

On 04/11/2022 at 15:37, dicker said:

Not heard of “Buy Bullion”, which is a surprise as I do look around for dealers a fair bit.

Q- Is graded gold worth it?

A - Depends on what you are looking for.  
 

If your are stacking, it makes little sense to pay a premium for graded bullion

If you are a collector (Say of Sovs) then maybe. I really dislike buying graded coins but sometimes something comes up that is graded and too good to pass up.

As always, but the coin, not the grade!

 

 

 

 

Thanks mate

[doctorgolden]

Thank you all for your input and advice. Really is appreciated and I'm grateful of this community. Most (if not all of you) just reaffirmed my own feelings on the matter and I stuck with my gut, and strategy to stick with what I know, and have given Graded a wide berth. It may be for some folk, but not for me.

Thanks again.

Edited November 11, 2022 by doctorgolden

[StackemHigh]

Only If the price is right.

[RDHC]

I think it may sometimes depend on how difficult it is to acquire a coin with a design (or whatever) that you especially want. For me, the various proof gold Britannias over the last 40 years or so would be a case in point. Starting rather late at this game, I don't think I could have acquired the 2001 and 2005 one ounce  examples without shelling out for graded coins; non-graded ones simply were not available. I remain very happy with my acquisitions, both at reasonable prices, one from a dealer (deep cameo 69) and one through this forum (deep cameo 70).

[AndrewSL76]

Late to the discussion, but here is my view.

I collect graded coins (mainly PCGS) and I stack bullion. My attitude towards buying is totally different when ‘collecting’ or ‘stacking’. My passion is half sovereigns and I would happily pay premiums for a rare, high graded half sovereign, but for anything that is bullion, I would not pay above the odds on spot price. 

In terms of collecting - there are the different population reports from the main grading companies and so you can see what is common or not. It makes me smile when you see people listing an MS65 coin and they say ‘super high grade’ but then you look at the population report and there are 87 of them in 65 and 32 in 66 and then only four in 67. The money being asked for the 65 is what you would pay for the 67. The key here is to do your research, understand the population reports, the scarcity and how rare the coin is before buying. If someone tells you a graded coin is ‘rare’ then do not be afraid to question it and check the population reports. For me, building a collection, I want to have top and high grade coins, but I am equally happy to buy an MS63 until a more reasonable priced MS64/65 coin comes along (which it inevitably will if the population reports high numbers).

For stacking, I am lucky to have easy access to Hatton Garden and you can always find going coins at spot price or thereabouts. There are of course times when the dealers are either not selling (because they bought at a higher price) or they are selling high about spot (for the same reason) but generally you can always get something there. The other day I bought a bullion 2012 QEII Sov for spot. It’s in fairly good condition but still, spot price regardless of the design. Had the dealer wanted even a small premium I would have passed.

And, yes, I agree with everyone above. If someone calls you to tell you about an investment opportunity ask yourself this: if the investment opportunity is so good, why are they having to flog it over the phone to me?

 

 

[GoldenGriffin]

Graded coins aren't everyone's 'cup of tea' so to speak.  I grade collectable coins only.  I don't grade bullion, unless it was a really old coin worth grading and like @AndrewSL76 I grade with PCGS and use their reports.  They're really useful to compare and use as a guide to value a coin.

Grading collectable coins offers another dimension to collecting, making a coin more rare...

For example, if there was a collectable coin with a maximum mintage of 1,000 and overtime 100 coins did not sell and were melted down.  Only 100 coins were graded at their highest grade, 200 coins have grades 1 below the highest grade and the other 600 coins were not graded.

Official maximum mintage figures are then updated from 1,000 to 900.

100 / 300 graded coins are graded top grade (may not be a 70 as it depends on the age of the coin). 

200 / 300 graded coins are now looking more rare / more collectable compared to 1 coin out of the original 1,000 and to me, this is where the new dimension comes in when grading.

The other 600 coins have not been verified through a professional grading company and aren't included in the 'scarcity' figures, so to speak. 

I would never buy from any pressured sales person and only buy what you like and feel comfortable with.

[Shinus73]

My approach to silver and gold has evolved over the years.

I started out as a stacker of the cheapest possible bullion (coins mostly) and was initially entirely disinterested in proof coins.

I now mostly stack / collect graded proof 1/4 oz gold, sovereigns etc, although my silver purchases still include a lot of 10 oz bars and junk silver.

Some observations for graded coins (in the UK):

Stick to Royal Mint coins, despite the frequent problems - many people will fawn over your lovely Libertads, but nobody will pay what you want for them.

Never pay RRP for proof gold 1/4 oz coins from the Mint - wait a couple of years and you will pick up the same coin (graded) for significantly less.

Always pay RRP for special design Sovereigns from the Mint - wait a couple of years and you will pick up the same coin (graded) for significantly more.

Silver - unless you get a PF70, the best you will do is get your money back.

Stop buying and grading proof silver coins (this is a message I really should listen to, but won’t).