Expert: Joe Hylas - 12/13/2008

Question
QUESTION: Hi Joe,

I'm looking to add another $20 Double Eagle to my collection. For my search, I have 3 criteria I'm trying to meet:

1. A Double Eagle that has good value, with nice upside potential.
2. A Double Eagle graded MS-64 by either PCGS or NGC.
3. I'm trying to keep the purchase close to $2,000.

With that criteria, I've narrowed my search down to a couple of coins:

1. A 1910-d NGC MS-64 Saint Gaudens priced at $1875.00. I believe this coins price doubles in MS-65?.
2. A 1910-s PCGS MS-64 Saint priced at $2370.00. For this coin, I think the price jumps to nearly $7,000 in MS-65?.

In your opinion, which of these 2 coins is the better investment?. Do you feel they are priced fairly?. Also, what is your overall feeling about investing in Double Eagles?. Or do you recommend people investing in bullion coins instead?.

I thank you very much for your time and input,

Best Regards,
Mike



ANSWER: Hi Mike,

I am a long time numismatic dealer so naturally you would think that I would push the numismatic aspect.

However, in this market, with the uncertainty of the world economy as a whole, I think bullion is the safest route to take.  Think about it; you are talking about spending 2-2.5 times the gold value for the numismatic coin.  When gold makes it's breakout move, will the numismatic piece perform as well?

If gold goes to $1600, will your 1910-S St G in MS-64 be worth $3,750?

Certainly I do not have a crystal ball, but for safety and liquidity sake, I am advising 90% of my clients to buy bullion coins.  The other 10% are wealthy enough to wait out anything that happens and would never have to sell the numismatic pieces.  If you do go for the numismatic pieces, be really picky about the quality.  There are MS-64's and there are MS-64's just just miss MS-65.  Always get the Premium Quality piece even if it costs you a little more.

I hope this helped you.

Regards
Joe Hylas

---------- FOLLOW-UP ----------

QUESTION: Hi Joe,

Thank you for the sound advice. The way you explained things, it makes perfect sense buying bullion coins over numismatic pieces with the present state of the world economies.

Joe, which type of bullion coins do you recommend the most?. I'm guessing the gold buffalos and the gold american eagles are more or less the same?. Also, do you recommend buying raw uncirculated coins as oppposed to certified bullion coins from PCGS or NGC?. I checked on Ebay, and certified bullion coins sell for a tidy premium over raw coins. In your opinion, is it worth it, spending say $1200 for a PCGS certified proof 70 gold buffalo?. The proof coins sell for more than the uncirculated;do you think it's worth it?.

Joe, to sum it up, should I be buying raw gold bullion coins, or certified bullion coins(MS-69 or 70), from PCGS or NGC?. Also, based on current bullion prices, what's a fair price to pay for raw and certified one ounce bullion coins?. Lastly, what are your feelings on buying gold bars from a company such as Credit Suisse?. Or do you stick with the U.S. gold bullion coins instead?. I hope I haven't asked you too many questions. I'm just trying to get expert advice before making any major investments.

Once again, I thank you very much for your time, and the valuable information you've imparted to me.

Best Regards,
Mike

Answer
Good Morning Mike,

Buy raw coins, there is no sense paying for certification.  From your standpoint, it doesn't matter if the coin is MS-69 or MS-70, you want the gold.

Basicly, all 1 oz bullion goins are in heavy demand, I have been quoting 2-3 week delays in delivery.  The most readily available is the US Eagle, however they are more expensive than the Krugerrands.

Currently, Eagles should run you about 13% over the spot price, this used to be 6-7% before the demand increase.  Krugerrands are running at about 10111% over spot.  In the long run, pay the extra few % points and get the gold in hand.

I have been doing hundreds of ounces each week since the economy started to fall apart.  The dollar is in a downward spiral and honestly, I don't foresee anything good coming out of it.  I think gold is the only insurance that the everyday "joe" has under the circumstances.

If you like, call me on Monday in the office.  I will be in at about 10 AM EST  800-474-6960

We can get you started on this. Hvae your funds available for overnight bank check or wire transfer.  We will book the trade, lock in the prices and delivery will be 2-3 weeks out.  The good thing is that you are locked in to the price no matter what happens.  And don't worry about me, I am a US Mint Referred Dealer.  There aren't too many fo us and we take this as a huge endorsement of our credability.  I have been trading metals since 1978 and been dealing in Eagles since their debut in 1986.

I look forward to speaking with you and helping you achieve your goal.
Have a great weekend!
Regards
Joe Hylas
Omega Precious Metals
www.AllCoins.US