Where to buy gold coins cheaper?

Why?

Currently gold is a hot investment topic. One of the ways to invest in gold is by buying physical gold bullion coins. Why should one buy those coins on eBay?. Because they are cheaper.

Usually dealers sell gold bullion adding gold spot price and their commission. Commission is usually 3-5% in respective dealers but may be much higher. On eBay I try to buy coins for spot price or lower (sometimes). I've noticed that Krugerrands are always overpriced and it is difficult to make a good deal. But Gold Maples are not so popular and can be purchased for reasonable price.

eBay account

If you already have an eBay account skip to the next section. If not read below. Registering on this auction site is easy. I won't describe the process because it is not a purpose of this article.

Here is the important thing - create an account on PayPal. It is the easiest and safest way to pay for your purchases (and also to receive money for your sales). They can either register your credit/debit card which is charged after you pay for an item or you can provide your bank account details and PayPal sets up a direct debit. It is worthwhile to spend some time and do it properly because then we can access to often cheaper eBay deals.

Things to consider

Postage. If you're buying from abroad ask the seller before bidding if he will post to your country. Usually there is no problem if you're willing to pay higher posting fee. Unfortunately some dealers add a disclaimer in auction description that they will not dispatch coins outside UK. It is difficult and expensive to send recorded delivery abroad. Sellers fear that they may be accused of not posting the coin and asked for refund. While in reality they did but the conman on the other side received the package but also wants his money back.

Currency conversion. If we're buying in foreign currency, for example from States (US dollars) or Ireland (Euros) we have a small risk of rate change. eBay already shows price in your currency (Sterling), together with original price, but this is an average rate and it may change by the time your account/card is charged. If exchange rate goes up you win, if it goes down you'll pay more. And if you're paying by a card which currency is different that PayPal charges you, you'll face another fee from card company.

Seller. Check his/her track record: how many transactions one had, how many items sold, what is the feedback score and comments. You will find ordinary people who are selling one or few coins - their auctions usually start low and the market (demand) does the rest. We will also find dealers that trade coins for living and their prices are higher. Products they sell are usually "buy now" offers with set price. And this price is in most cases very high, much higher than gold spot price plus reasonable margin in my personal opinion.

Bidding. What I am about to say is true not only for bidding for gold coins but in general. Be calm and reasonable, do not take part in bidding war. Do not wait until last seconds to post your bid because then emotions kick in and they are a bad advisor. If someone puts a higher bid than yours, you may be tempted to increase yours and win. It is not a problem to buy a coin, the real problem is do make a good deal. With the current price of gold around £840 (for latest see chart on the right) it is not an art to buy an ounce for £1000. But to do it for or below spot price is an achievement. I encourage you to look for this kind of deals.

Payments. Let me stress it again: always use PayPal. They cover you in case something goes wrong, it is called "eBay Buyer Protection". If someone offers you a deal too good to be true it is too good to be true. Walk away. If they ask to send them a cheque or cash - run away. I once had this offer to buy 1 oz Gold Maple Leaf for £700 while spot price was around 10% higher. But the seller had just 1 feedback, doesn't accepted PayPal and wanted cash in the post. I've pulled out. After few days I've received an email from eBay that this seller account was suspended and he was suspected of fraud.

Coin. Before bidding check if the coin really exists. Especially when buying from a someone with questionable reputation: few feedbacks, never before sold gold, all transactions were for small amounts of money. I'll always ask for a photo of the coin in a background of latest local newspaper. This way you can easily establish that seller has the coin and is local and not just downloaded the image from the Internet.

Check. Always check coin after delivery. You can use a device called The Fisch. The problem with this gauge is that one works only for one type of coin (sometimes more). To check Maple Leaf 1/10oz, 1/4oz, 1/2oz, 1oz you need 4 detectors. Another 4 for Krugerrands. And what about other coins or other weights like 1/20oz? The Fish measures weight, diameter, thickness and shape using cleverly designed gauge. I do the same but using more basic tools. They are cheaper and more versatile, without limitations I can check any coin. For weight I have precise (0,01g) digital scale. For diameter and thickness I use digital calliper. Website Only Gold contains all those parameters for most popular coins.

Good luck and happy bidding!