Fair Price for Gold Nuggets?

We are often asked questions about buying and selling gold as coins or as nuggets.  Here is one of  the most recent emails and our reply.

QUESTION:

Subject: gold purchase pricing

i've been looking at nuggets for investments        i have an alsaka

prospector who has offered 1 gram avg size nugs  @ 1.5 oz for

$4925   which they say will be roughly 45 nugs.     at $1850  or so it

seem like 1.5 oz has a value only @$2800  not $4900

a friend whom own a coin shop tells me thats  too high, as my plans

r to buy around $10,000 worth before the end of the month

my delema is, is this good info,  or is he trying to discourage me on

nugs cuz he wants me to buy his .999 coins??

                                                   buzz

Answer:  

I'm afraid your Ak prospector friend is trying to rip you off.

He is effectively charging you 3283 per oz when the melt price of 24k gold is 1790 per oz. today.  Nuggets do sell for a premium over spot if of good character, purity and size.

The going fair rate for typical placer gold nuggets of this size when sold by reputable dealers at full retail is somewhere between 10 and 20% over spot price. Anything more is a complete rip off unless they are of specimen quality (think museum grade) which is highly unlikely.

You should also be aware that gold from Alaska is almost always less pure than gold from California. Ak gold can be 18k or far worse in some cases. Ca gold is rarely below 20k.   If reselling as a nugget to another collector it matters less but if planning to hold them and melt later it will be a large factor. We do not advocate buying large natural placer gold for melting - you will lose value. They are meant to be kept intact and resold as collectible items.

You can compare our nugget prices here:  http://www.goldfeverprospecting.com/buygoldnuggets.html

Whether you buy coins or nuggets is a whole other issue.  If planning to melt them down - avoid nuggets as you will take a loss.  If planning to resell them intact to other collectors they could be a great investment.  Even more so, if you can fashion them into value added jewelry or partner with someone who can.

Buying coins or bullion  is a no brainer - buy them as close to spot price as you can. You have to allow for a little dealer mark up - usually no more than 10%.  And do not be scammed into paying a premium for "historic" or rare coins. Those are almost always a bad investment and pure hype. 

Personally I always prefer a natural nugget over a run of the mill mass produced gold coin.  There is no hope of ever having anything unusual or special with a man made minted coin.  Every nugget is unique and has its own character - this appeals to collectors. 

best

Harrigan

Gold Fever Prospecting

www.GoldFeverProspecting.com