Several responses to the original question suggested that buying
casting grain or bullion from refiners is cheaper than buying coins.
I have not found this to be true – at least when buying in 10 ozt or
less quantities. The markups from refiners and especially jewelry
suppliers run from high to ridiculous, for what they consider to be
small quantities! I have consistently been able to buy bullion coins
at 2% over the spot price of gold, or less, delivered. Often, I can
get under 1.5% over spot. If someone knows of a refiner or jewelry
supplier with this low a markup for casting grain, I’d sure like to
know about it!
Sometimes you run across great deals – right now, I know a dealer
with Krugerrands at just $2 over spot – this is 0.65% markup (and if
you buy 10, shipping is included). How can you possibly beat that?
(of course, the reason he can sell them so cheap is he bought them
before the recent gold runup, so he’s making his profit, but it does
say something about his business practices that he doesn’t
automatically add a fixed markup over current spot. A lot of dealers
do, so you need to shop for price.)
As someone else mentioned, I also like the Krugerrand 22kt red gold
alloy for fusing, bezels, and general 22kt work. (It’s alloyed with
copper, by the way, for the person who wondered about it). But I
also buy Maples and Eagles, generally whatever I can get for the
lowest markup. Often, that’s tended to be the K-rands, as they are
less in demand from collectors/hoarders, for some reason. I also
always check to see if I can get “blemished” coins, or less than
brilliant uncirculated condition, which is typically what the coin
dealers quote. I usually can save a few bucks that way, too – since
I am melting them, what do I care about minute blemishes.
Someone else mentioned alloying issues, with other than 24kt coins.
Not really an issue, in my opinion – all you are doing is carating
down, it’s the same basic calculation as making 14kt from 18kt.
Alloy compositions on all common bullion coins are published and easy
Now, if you are buying 50 or 100 ozt at a time, then maybe this
doesn’t apply to you…! But for the small shop, I think some
careful shopping for coins saves some real money. If you are making
your own stock anyway, why pay a premium for the basic metal? And,
one more advantage – if you decide you need to sell some gold at
some point, coins bring a large premium over grain or fabricated
goods, when you are selling. The refiners discount heavily when you
sell to them, but the coin dealers pay much closer to spot. I can
sell a K-rand to the dealer I mentioned above, today, for 2.9% under
the gold spot, and a Maple or Eagle for $1.00 under spot. How much
do the refiners pay you for your excess gold, in small quantities?