Recently I've been thinking about buying a small amount of gold coins to store in a safety deposit box at my local bank. I just want to add a little diversification to my portfolio and I like the idea of having some physical assets. I have never bought gold coins before so I decided to do some research on how to get the best price when buying gold.
Gold is a precious medal and a store of value that is often purchased as a hedge against inflation. It's traded daily and you can find the latest quotes on gold prices on any major financial website. My goal is to buy gold coins closest to the quoted spot price per ounce of gold. In my initial research I've found 1 oz. gold coins like the American Eagle, Canadian Maple Leaf, South African Krugerrand, Chinese Panda, and American Buffalo coins for sale at online precious metals and coin shots for a 5% premium over the spot price.
The Pre-1933 Gold Coins Scam
I decided to call a company I found online that sold gold and other precious metals. After explaining that I had never bought gold before the salesman launched into a sales pitch I could not believe. First, he said with certainty that gold was going to go to $2000 an ounce very soon. Then he started giving me some story of how I needed to buy pre-1933 European gold coins to protect against confiscation by the US government. Now I knew that during the 1930's the U.S. did pass a law effectively confiscating people's gold and making it illegal to own gold. But his story of protecting oneself by buying pre-1933 gold coins sounded fishy. I did some research online and found one article stating this was a common tactic among some gold salesman to sell coins with a higher mark-up and commission and that there was no such protection to owning pre-1933 gold coins.
Buying Gold Coins on Ebay
I then looked into buying gold coins on Ebay. You can find a wide variety of types of gold coins on Ebay from American Eagle's to Canadian Maples to South African Krugerrands. Buying gold on Ebay sounds a little risky but there are a couple of things you can do to limit the risk such as only buying gold coins from power sellers who have a lot of positive feedback or buying individual coins in smaller weights/dollar values.
One tactic I came across to save money buying gold on Ebay was to take advantage of MSN's cash back program. This is a program that gives you a cash back rebate if you go through a paid search link on MSN or Live.com. If you search for "gold coins" on MSN you should see a cash back link alongside an eBay listing. When I checked, Ebay was offering 8% cash back through MSN link for purchases made within 60 minutes of clicking the link and buying a gold coin through a "buy it now" link. There are several conditions that apply so please read all the conditions on Ebay and MSN before making your purchase. You will need both a cash back account with MSN and an Ebay account to participate.
This is effectively a way to save 8% when buying gold on Ebay. The only problem is that most coin dealers on Ebay know this and they markup their coins so you don't really get a discount over what you might find on some of the online coin shops. However, a little while ago I heard of MSN offering 25% cash back on Ebay purchases which would most likely make it possible to buy gold below the spot price. Not sure if this was an error on MSN's part or a special promotion.
I'm still doing research into where I should buy my gold coins. I have been doing comparison shopping at a few online coin shops and one local coin shop. I'll update this post to let you know where I found the best deal. If you have any money saving tips for me when it comes to purchasing gold please leave them in the comments below. Thanks.
Recently I've been thinking about buying a small amount of gold coins to store in a safety deposit box at my local bank. I just want to add a little diversification to my portfolio and I like the idea of having some physical assets. I have never bought gold coins before so I decided to do some research on how to get the best price when buying gold.