Question from new investor

Discussion in 'Platinum' started by BullionQuestions, Dec 26, 2016.

  1. BullionQuestions

    BullionQuestions New Member

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    Hello everyone,

    I'm new to this. I have questions. Thank you in advance for reading this.

    I have about $15k that I can invest at this point. I have plenty of other assets (real estate mainly) and I'm interested in adding some metals. I already have some metals I got quite a while ago (about 20oz of Pt eagles, 10oz of Au Krugerrands).

    I'm thinking that now would be a good time to buy Pt. My logic is: Pt is about the lowest it has been in ten years right now. It's lower than gold, which is unusual. One long-term problem with Pt is that we may be using less of it for catalysts as we use less oil. What does this group think?

    I was looking at ways to buy platinum. Let's compare spot, bullion price, and coin price. Right now, on Kitco, we have:

    New York spot price, selling: 896.00
    Kitco sale price, per ounce, bar: 941.94
    Kitco sale price, Pt maple leaf: 981.69
    Apmex sale price, Pt eagle, qty 10: 1,098.99

    In terms of spot:

    Spot: 100%
    Kitco, pt bar: 105% of spot
    Kitco, Pt maple leaf: 110% of spot
    Apmex Pt eagle (qty 10): 123% of spot

    My understanding is that the various coins have no numismatic value. I fully understand there are costs of minting and distributing them. I fully understand that a quality coin such as an Eagle has better liquidity than a bar, because you don't really need to assay or weigh the eagle to buy it. And I appreciate the beautify of these coins.

    But 23% over the Pt value for the Eagle? And i notice that Apmex has even higher premiums for Pt Eagles in various graded conditions - you can pay 2x spot for an Eagle quite easily if it's in ideal condition, even though there's no rarity to these coins. I know it doesn't cost $200 to strike and distribute these coins, because production / distribution costs of a silver coin are the same as of a Pt coin (it's the same physical process), and silver coins don't get a $200 markup over spot, obviously.

    Can someone explain to me, or tell me that it's foolish to pay that much premium for the eagle and I should just get a bar or a maple leaf ?

    Thank you, and Merry Christmas
     
  2. sfstacker

    sfstacker New Member

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    Welcome to the forum.

    Well you are investing at a good time. PMs are low.
    Since you're mentioning Kitco and APMEX I'm assuming you live in the US.
    I follow about a dozen US based websites and cross reference their prices on things almost daily.

    APMEX generally has the highest prices of anybody. Even when they have a flash sale or some kind of holiday deal their premiums are the highest.
    I've found APMEX to be the cheapest place to purchase gold.
    Provident Metals has been the cheapest to order silver.
    JMBullion or Silver.com has been the cheapest when purchasing platinum (in assay cards)

    All websites are going to have high premiums for Eagles. Because of their high premiums I just can't myself to purchase them. You're basically paying for the prestige of it's design. Your cheapest option will always be their generic rounds or bars with the websites logo on them. Your best deals are going to be bulk buys. Some dealers give price breaks at quantities of 5-10-20. If you can, try not to pay more than $0.99 over premium. If you want to buy these coins as an investment in your future you best bet will be making one large order so you can get the price break and at the lowest premium. Don't pay extra premium for designs unless it really speaks to you.

    To start off try JMBullion - www.jmbullion.com/starter-pack/
    You can't find that link on their website. You have to Google it. What they sell is 10 oz of silver with their logo for ONLY the spot price. No shipping or extra fees (if pay by check/money order). Pretty good deal.
     
  3. FSF

    FSF New Member

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    If I were you, I would monitor specials on ebay. Not more than a few weeks ever go buy where a national dealer doesn't discount Maple platinum or the Australian Platypus for about the same price or even less than you can get a platinum bar for. You can also sometimes buy bars for close to spot, though I'm a coin from an established country kind of guy. What's more (if you are in the U.S., not sure about any situation for ex-U.S.), you can get cash/rewards back through a credit card purchase. In fact, just this past week, a major seller was selling the 2011 Platypus coin at about $45 over spot.

    Since we are flipping to a new year, I would anticipate plenty of specials on 2016 & 2017 coins in the coming weeks.
     
  4. sfstacker

    sfstacker New Member

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    As of right now APMEX is the only one advertising an "end of year" sale.

    Provident has their third coin in the Nordic Creatures series coming out.

    BGASC released a new prospector round $0.99 over spot

    And if I remember correctly from last year Silver Town and a few other websites had their American Flag design round/bar on sale for New Years and 4th of July.
     
  5. FSF

    FSF New Member

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    That's right now. If you monitor ebay on a regular basis, they come up regularly. Based on your post, you're apparently wasting you time in all the wrong places.

    For instance, they have tons of regular gold specials. Here is a 2017 gold Kangaroo that's been around for at least a couple of weeks at $30 over spot:

    http://www.ebay.com/itm/2017-100-Au...000000123|5374:Powered+by+Top+Bullion+Sellers

    After a 2.6% cash back for me on my credit card, I could buy it for spot.

    Platinum specials are less frequent due to the significantly less volume of investor transactions in platinum. But they definitely come around regularly if one has any patience.
     
  6. sfstacker

    sfstacker New Member

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    I wonder how that works? I've sold on eBay for almost 12 years so I know the fee system pretty well. I can't see how someone can offer PM's below or at their spot price and still make any money.
     
  7. FSF

    FSF New Member

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    Well for one thing, listing as a seller in the bullion category is apparently much cheaper, especially for powersellers who sell a ton. Even without the bullion category, their fees are substantially less than a small seller's. For another, and I'm speculating here, ebay might be passing along seller discounts to hit earnings' numbers or whatever. But trust me when I tell you that for the past 2-3 years that I've been stacking, it has been a very regular thing and much more so in the past year. In the past month alone, there are at least a half dozen instances of gold specials such as Maples for $19.99 over spot. AGEs for $29.95 over spot, AGEs for $39.95 over spot, Buffalos for $29.95 over spot and on and on. And this isn't random date damaged junk material. They're almost always doing brand new current year coins. Don't know all of the behind the scenes facts related to it, I just know that it goes on and has been going on for a while.
     
  8. sfstacker

    sfstacker New Member

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    There's no seller discount that I'm aware of that are in correlation to eBay meeting its numbers. I've been a power seller and the discounts from each tier are negligible. I've never sold bullion though. So who knows maybe they get to keep an extra buck or two in seller fees.
     
  9. FSF

    FSF New Member

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    I think there are sellers that get way more favorable rates than "power sellers". Sellers that negotiate with ebay directly because of the significant volume they do. The "whales" if you will. One clear indication of this to me is that I've consigned material to such sellers with 8% rates and they pick up everything including ebay fees and paypal fees and remit me 92% of the closing price. That can't leave them much for their services of scanning, listing, shipping, dealing with buyers, etc. So their fees must be pretty darn low to do that.

    I highly doubt ebay is characterizing any discount as being related to meeting earnings or revenue numbers so it makes sense that you wouldn't be "aware" of such a thing. And the fact that certain sellers may get this treatment does not mean that they are doing it for all of their sellers, even power sellers (which frankly doesn't take much of a seller to become one so I shouldn't have used that term to begin with). In any event, the bottom line is that at least a half dozen major PM dealers provide these types of specials on a regular basis especially around fiscal quarter ending and beginning times. And they only seem to do it through ebay as far as I can tell. They are NOT running them ever through their sites as far as I've seen (at least using credit card) so there's very likely some kickback from ebay.
     

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