This post is by Bernie Carr, apartmentprepper.com
Many prepper sites recommend buying gold as part of your portfolio. On the other hand, many other people have never thought about buying gold, and have never gone to a place that buys and sells gold.
I had an opportunity to visit a gold dealer during my lunch hour a few days ago. My co-worker, who is a coin collector, mentioned he was on his way to the gold dealer to check out a certain coin. I figured it would be an interesting to tag along, and check things out for myself.
Jewelry Store-Like Atmosphere
We drove for about 15 minutes before arriving at this free-standing two-story building, with a marquee showing the price of gold for the day. There was a police car parked out in the parking lot and only a few parking spaces were left. It looked like a few other customers were using their lunch hour to visit the gold dealer. We entered a set of double doors, and found another locked door inside. A lady working behind a glass window looked us over then buzzed us in. Inside we saw wood shelves with glass cases along each wall with various items on display. There were various types of rings, pendants, necklaces and even Faberge eggs on display. In short, the place looked a lot like a jewelry store, without all the emotional advertising to entice you to buy. The dealers were very matter of fact about doing business, they were straightforward and did not seem to care one way or another if you made a purchase or not. In the middle of the room were more glass cases and several customers were being helped with their transactions. One lady was unwrapping various types of silverware-cups, gravy bowls, saucers etc. and appeared to be selling the pieces. Another man had a bag full of gold jewelry and was getting a quote on selling them.
Selling and Buying Gold Coins
The person being helped ahead of us was selling gold coins. They appeared to be American Eagles. They checked the latest price of gold and quoted him $1,250 per ounce. He seemed pleased with that and sold his coins. He was paid in cash and the gold coins exchanged hands. It looked amazingly easy to sell gold coins at this dealer.
My friend looked at various coins. They had the Buffalo and Eagle coins in various sizes, 1 ounce, half ounce etc. The lowest denomination they had that day was the Chinese Panda coin at 1/20 ounces. My friend was looking for Eagles at the low denomination but they only had Pandas.
I spoke with the lady behind the counter regarding pricing, and she explained that you get more gold for your money if you buy the higher denominations, such as the full ounce or even over one ounce, since the markup for these items is not as high as for the little 1/20 coins. However, I was thinking if you were ever in a situation where you need to use the coins as currency or barter, the small denominations would still be good to have, as you would not want to have to cut the larger coins into pieces. But that is just my prepper mind thinking through possible scenarios.
Apparently their inventory varies daily, it just depends on what people come in to sell that day. One lady came in and sold her Krugerrands, and the coins were immediately set on display for the next buyer.
If you are curious about the current prices or metals, visit Kitco.com.
I asked my friend if he ever went to pawn shops to buy gold coins; he said he has checked out a few but he was convinced the places he went to were not giving him a fair deal so he preferred the gold dealers. He had also tried calling some of those newer gold outfits that have sprung up in recent years (remember those gold parties a while back?), but he also did not have a lot of faith in them. He asked me if I wanted to look at anything else, but my curiosity was satisfied so we left. Neither of us bought anything but I was glad I went, as I now know where to go if I am ever in the market for gold.
Next time, we will discuss what to consider before buying precious metals such as gold or silver.
All good information! But, the amount value of gold or silver purchased or sold can trigger federal reporting requirements. As with any cash purchases of $10,000 or more in the United States during a 24-hour period, an IRS report is required if cash is used to buy gold and silver bullion and coins. Some individuals want to avoid this reporting lawfully, and plan ahead to keep their purchases under the $10,000 amount. Also, the mint of gold and silver bullion and coins can trigger other reporting requirements. Asking for “exempt” bullion and coins (including American Buffalo gold coins, American Eagle gold or silver coins, Australian Perth Mint coins, Austrian gold coins, Canadian Silver Maple Leaf coins, Chinese Panda gold or silver coins, and all fractional gold coins) is a good way to avoid reporting as they weren’t included in the original federal reporting laws. Apart from the reporting requirements, it is always a good idea to monitor the gold and silver markets (especiallly their historical prices) for a week or more to learn when the next likely “best time” to buy or sell bullion or coins occurs.
Hi David, Thanks for sharing your thoughts and advice on this topic. A lot of readers are curious about buying gold or silver, but may be hesitant and have not gotten around to it. That is good information to know about the reporting requirement of such purchases. I appreciate your comment!
I go to my local coin shop every week. I ALWAYS pay with cash. I say how much silver I want, pay for it and walk out. No tracking at all. There is a double door that they have to buzz you in, but no cameras to record you.
Been buying from this store for years, it’s the premier coin store in my area. Everyone I know that buys silver and or gold shops there.
I have also bought silver from a pawn shop I trusted, but after 60-years in business they closed a few weeks ago. The pawn shop guy always matched the coin shop price. He was a good and honest guy. I guess that’s why they lasted 60-years.
Hi Chuck, That’s a shame your trusted pawn shop had to close. It is hard to fine one that is trustworthy. Thanks for the comment.
In New York State, if you buy precious metal “bullion” — that is, bars or coins which are valued for their metal content only and have no collectible or numismatic value — AND if the purchase amount is over $1000, then sales tax is waived; the dealer does not charge you sales tax on the transaction. I don’t know what the rules are in other states but I’m sure a phone call to a dealer would soon clarify things.
Hi Ron, Being able to avoid sales tax is a great deal. I’d have to check if the no sales tax over $1000 is done by dealers here. Thanks for the comment.