Lowest Premiums on Gold Bullion

Written By Luke Burgess

Posted April 4, 2016

I’ve been using the recent pullback in gold and silver prices as an opportunity to add to my physical bullion portfolio.

And I’ve found some pretty interesting deals I want to tell you about…

But first, let me tell you that I have no affiliation with any of the bullion dealers mentioned today. I am simply reporting what I’ve found to be the best deals as a customer myself.

When I’m buying physical bullion for investment, the first thing I look for is a low premium. The premium is an additional charge for physical coins or bars over a precious metal’s cash spot price.

Why do bullion coins and bars carry a premium over cash spot prices?

Well, it’s not free to produce a refined bullion product like a coin or bar. So the refineries and mints that produce gold and silver bullion charge dealers a premium right off the bat. Then the dealer adds to that premium for his/her time, risk, and profit.

In general, the premium for gold coins is much lower than for silver coins — especially right now. Some government-issued silver bullion coins are selling at a 40.0% premium over spot prices right now. And they aren’t special coins in any way.

Now, the premium for gold and silver bullion is generally going to depend on a few things:

Coin or Bar Size
Generally speaking, the premium for larger bullion coins and bars is lower than smaller weights. So fractional bullion coins (like 1/10-, 1/4-, and 1/2-ounce coins) are going to have a higher premium than full one-ounce coins.

For example, the premium on a one-ounce American Gold Eagle might be anywhere between 4.0% and 9.0%. But for a 1/10-ounce American Gold Eagle, the premium could be between 10.0% and 20.0%.

Purchase Size
The premium for gold and silver bullion will almost always depend on your purchase size. Larger purchases carry a smaller premium, and vice versa. The difference in the premium can be as much as 3.0%.

Method of Payment
Your method of payment actually makes a very big difference when buying gold and silver bullion. Paying with a credit or debit card or PayPal always carries a higher premium. Using an electronic check, bank wire, or simply paying in cash is always more affordable. And the difference in premium between the two options can be as much as 5.0% or 6.0%.

Other factors that can add to a bullion coin’s premium include any collector desirability. Shipping and taxes should also be considered part of a bullion purchase premium.

But here’s what I’ve found to have some of the lowest premiums for gold bullion right now…

The premium for gold bullion has increased significantly over the past few years. As mentioned, a one-ounce American Gold Eagle sells for 4.0% or 9.0% over spot prices right now — depending on how you pay and the size of your order.

However, there are a handful of “numismatic” gold coins that actually have lower premiums than their bullion cousins.

Now, these coins are generally considered “collectibles,” not investments. However, for various reasons, the “numismatic” coins we’re going to talk about today do not hold a lot of appeal to collectors.

That means there is little to no numismatic value added to them. And all can be purchased with premiums that are significantly lower than any other government or private bullion product.

APMEX is having a sale on one specific “numismatic” coin right now that works out to a premium of only 1.0% over spot prices.

(Links to all of the coins mentioned today are at the end of this article.)

Austrian Gold 100 Corona

Austrian Gold 100 Coronoa Obverse Austrian Gold 100 Coronoa Reverse
Photo Source: APMEX

The Austrian Gold 100 Corona was one of the few bullion coins available when Americans regained the right to own gold in December 1974.

These coin are minted with a 90% gold purity and contain 0.9802 troy ounces of gold — not a whole troy ounce.

Still, if you pay with a check or bank wire, APMEX currently has these at only 1% over spot, no matter how many you purchase.

Paying with PayPal or a credit card significantly jacks up the premium.

APMEX’s listing is for a “random” date coin in “AU” (meaning “About Uncirculated) condition. Most likely, these coins will have a date on their face of 1915. However, they will be what are called “restrikes,” which just means they were minted from old dies after the original minting of the coin ceased. In other words, even though these coins have a date of 1915, they were produced through the 1970s.

But still, if the idea is to buy gold at the lowest possible premium over spot, I think this coin has it hands down right now.

Even large 10-ounce secondary market gold bars are carrying a premium of over 1.0% right now.

The American Arts Commemorative Series Medallions

lowest premium gold bullion 5Photo Source: APMEX

The American Arts Commemorative medallion is a series of 10 gold bullion pieces that were produced by the U.S. Mint from 1980 to 1984.

These medallions were produced to compete with the South African Krugerrand, Canadian Maple Leaf, and other foreign gold bullion coins, like the Austrian Gold 100 Corona. The U.S. Mint didn’t begin the American Eagle bullion program until 1986.

The 10 medallions come in two sizes: one-half and one troy ounce. And due to a general lack of collector interest, these coins can be purchased for just over 1.0% of gold spot prices right now.

Provident Metals has random-date one-ounce American Arts Commemoratives for 1.1% over spot if you pay with an e-check or bank wire.

For the one-half ounce American Arts Commemorative medallions, Provident also seems to have the best deal with a premium of 2.6% over spot for any quantity — again, if you can pay with an e-check or bank wire.

To compare, among the lowest premiums for brand-new half-ounce bullion coins is the Gold Canadian Maple Leaf. However, the absolute lowest premium I could find for those is just over 6.0%. And that requires a purchase of 40 coins or more — in other words, a +$26,000 investment.

Another one-half ounce gold coin series with very low premiums is the “First Spouse” commemoratives.

Beginning mintage in 2007, these coins will feature every First Lady who lived in the White House. The 2016 coins feature Pat Nixon, Elizabeth Ford, and Nancy Reagan.

Exciting, right?

Well, collectors don’t think so, either. So the premium for these coins is generally very low. That said, however (and speaking as a collector), there are some good-looking coins in the series (in my opinion) — although they feature the allegorical Liberty, and not the first wives.

2007 Thomas Jefferson’s Liberty
2007 Thomas Jefferson’s Liberty
2008 Andrew Jackson’s Liberty
2008 Andrew Jackson’s Liberty
2008 Martin Van Buren’s Liberty
2008 Martin Van Buren’s Liberty
2010 James Buchanan’s Liberty
2010 James Buchanan’s Liberty

1930 Uruguay Gold 5 Pesos

1930 Uruguay gold peso 1 1930 Uruguay gold peso 2
Photo Source: APMEX

These coins have a bit of an interesting story. In 1930, 100,000 of these were made in Uruguay to commemorate the centennial of the Uruguayan Constitution — but only 14,415 were released at the time.

The remaining 86,000 coins were retained by the Uruguayan government. Rumor has it that these coins were eventually sold to the Argentinean Central Bank in 1998.

These coins were minted with a gold fineness of 0.9167 and contain 0.2501 troy ounces — comparable to a quarter-ounce gold bullion coin.

APMEX currently has a sale on these with a premium ranging between 6.5% and 11.5% over spot gold prices.

That is significantly higher than any of the coins we’ve talked about so far. However, for a one-quarter-ounce gold American Eagle or Canadian Maple Leaf, the premiums range somewhere between 8.0% and 16.0% right now.

I purchased a few of these myself over the weekend and will post a blog about it on the Energy and Capital website later this week after I receive them.

In the meantime, I urge all readers to own at least some physical gold.

Estimates suggest that all of the available aboveground gold in the world totals only 6.4 billion ounces.

And with a total world population of 7.4 billion people, that means that less than one ounce of gold exists for every person.

Shouldn’t you have at least one ounce in your possession?

Below, I’ve outlined how the premiums compare for the gold coins we’ve talk about today and added links to the web pages where they can be found. However, these premiums will change over time, especially the coins on sale. So please be sure to compare up-to-date prices.

The range in premiums below represents the difference between purchase quantity and method of payment, and they are current as of April 3, 2016.

One-Ounce Gold Coin Premiums (Random Date)
  Austrian Gold 100 Corona* American Arts Commemorative medallion American Eagle Canadian Maple
APMEX 1.0% to 5.0% 2.0% to 6.5% 4.1% to 9.1% 2.9% to 7.8%
Provident Metals 1.2% to 5.6% 1.1% to 5.4% 4.1% to 8.8% 2.7% to 7.0%
JM Bullion n/a n/a 4.0% to 9.0% 2.9% to 7.3%
* The 0.9801 toz. AGW was considered in the calculation of the premium.

Half-Ounce Gold Coin Premiums (Random Date)
  American Arts Commemorative medallion First Spouse Commemorative Coins American Eagle Canadian Maple
APMEX 2.9% to 7.1% 3.8% to 8.6% 7.0% to 12.3% 7.0% to 12.3%
Provident Metals 2.6% to 6.9% n/a 7.3% to 14.1% 7.0% to 13.5%
JM Bullion n/a n/a 6.4% to 11.7%* 6.2% to 11.7%*
* Premiums are for 2016 dated coins

Quarter Ounce Gold Coin Premiums
  1930 Uruguay Gold 5 Pesos* American Eagle (2016 date) Canadian Maple (2016 date)
APMEX 6.5% to 10.8% 10.0% to 15.4% 10.0% to 15.5%
Provident Metals n/a 10.0% to 16.7% 9.0% to 15.9%
JM Bullion n/a 9.0% to 14.9% 8.2% to 13.9%
* Coin is actually 0.2501 toz. AGW

Until next time,

luke signature

Luke Burgess
Energy and Capital

P.S. I also posted a blog this weekend that briefly talks about the lowest premium for silver bullion coins. You can check that out here.

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