If you want to own gold, this is how you should do it…Quite frankly, it’s unbelievable… Rare gold coins are selling as close to melt value as they possibly can.

Take one of the real “blue chips” of the rare-coin world… the $20 Liberty, made over 100 years ago. It has just under an ounce of gold in it.

Back in 1989, the wholesale cost to dealers on this coin (graded “mint state 63,” or MS63) hit $1,600. The price of gold on that day was $366 per ounce. So in late May 1989, a dealer had to pay 4.4 times the price of gold to buy this coin.

Today – nearly 20 years later – the wholesale price on this coin is a hair above the price of gold. There is practically no “collector’s premium” over the price of gold. It is ridiculous.

This is even more ridiculous: Some investors are buying South African gold Krugerrands and U.S. gold coins minted yesterday. These coins have no chance of trading at a premium to their melt value – they’re in near-infinite supply. The mints can simply make more of them to meet demand.

But if you’re buying MS63 graded $20 Liberties, you’re pretty much just paying the cost of getting it graded and the dealer markup. You’re paying nearly the same price as you are for modern gold coins.

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At that price, sell your Krugerrands. They’ll never go up in value. They’ll always be worth the price of gold. Take those proceeds and buy some rare coins!

As I said, I think the $20 Liberties and similar coins are an incredible bargain right now. But when a bull market finally takes hold in rare coins (we’re overdue… it’s been 20 years!), these “low end” rare coins aren’t what take off. The rare stuff is what really zooms.

The last three rare-coin bull markets have seen gains of 348%, 1,195%, and 665%. When they do take off… prices go nuts.

Right now, the rare-coin market can’t get any lower… Dealers are hardly making anything on these coins as it is. And the price of gold has sneaked above $900 again. In my newsletter, I’m returning our gold coins to a “buy.”

If you’re completely new to coins, then I suggest you read the new brochure that coin legend David Hall has posted on his website (www.davidhall.com) called “Long Term Wealth Builders.”

David works with coin dealer Van Simmons. Van has taught me more about making money in coins and collectibles than anyone. He’s more than a coin dealer… he’s a mentor of mine.

You can’t pick up the phone and call Warren Buffett for advice on stocks… or Bill Gross for advice on bonds. But the rare coins and collectibles world is small enough that you can pick up the phone and chat with the most knowledgeable man I know in collectibles. (You can reach Van at 800-759-7575 or info@davidhall.com.)

I am absolutely flabbergasted at how cheap rare coins are right now, trading closer to “melt value” than ever. You can make money in two ways here… If the price of gold goes up… or if the “collector’s premium” goes up (heck, it can’t go down from here).

My suggestion is to stick with a dealer you’re certain you can trust (Van is who I do business with)… and for the most potential for profit, buy a few exceptional coins instead of a large handful close to melt value.

It’s not often you can buy an asset when it’s the cheapest in its recorded history. But that is the case, right now, in rare gold coins. Whether you buy or not, you’re doing yourself a disservice if you don’t at least consider the idea.

Good investing,

Steve

Source: Don’t Hold Gold… Buy This Instead