eBay Gold Prices

So, the price of gold dropped precipitously a few weeks ago.  One of the selling points that nearly every gold seller makes is that “gold coins tend to retain their value when the price of gold drops.”  So, I decided to test it.   When I was researching my “rooster” post a couple months ago, I took down some average prices of gold coins on eBay.  It’s not particularly scientific, but eBay can show you closed auctions and what they sold for, so you can put together a sample of 50 or a hundred retail sale prices and get a picture of actual money paid for a coin.

Since then the price of gold dropped, so now I had a good use for the data:   if I look today, a few weeks after the fall, will I see coins still priced about the same as they were pre-fall, or a softer fall, or no fall at all? Here’s the numbers:

Coin on eBay Feb Avg Apr Avg % Chg
20 Franc Rooster $345 $320 -7%
10 Franc Rooster $221 $204 -8%
$5 Eagle $460 $438 -5%
$10 Eagle $954 $809 -15%
Average per oz $1993 $1819 -9%

I sampled coins from a space of about three weeks, from just after the big drop, and I got the “average per ounce” based on the actual gold content of each coin.

When I sampled coin prices in February, the price of gold was $1591 an ounce, and had been pretty close to that through the sample period.   The price of gold has changed significantly in the past couple weeks, but we can see how close eBay stayed to the price of gold by using our average loss per ounce from eBay and see how close to the actual numbers we are.

7% $1479
8% $1463
5% $1511
15% $1352
9% avg. $1447

Well, now, that looks like a pretty even cross-section of prices that an ounce of gold went for over the past few weeks, doesn’t it?

At first glance, my reaction was, “woah, gotta buy some cheap $10 gold coins”, but like I said, I was rather unscientific: it’s likely that when gold hit the bottom, people went for the big coins first, and the average for $10 is a bit skewed versus the smaller 10 Franc coins which saw less of a drop.   What this sampling should show is that gold prices on eBay, and prices of gold coins in general, don’t necessarily keep their value when the market price of gold drops.   Coins are an easy way to be certain of how much gold you’re getting with a degree of protection against fakery, but it isn’t safer than a gold fund or buying bars of bullion from somebody.

(Footnote on the price per ounce on eBay: eBay coins on average carry a 20% to 25% premium, according to my sampling. Keep this in mind when buying – you pay more on eBay than at your corner coin shop)


You Can’t Take It With You!

See that guy?  That’s Walter Samaszko, owner of one of the biggest hordes of gold coins found in the United States in recent years.  Samaszko had packed them away in nondescript ammo boxes in his garage, for what purpose, we’ll never know.

You see, Walter passed away earlier this year, and the realtor preparing the house for sale found the boxes of hundreds of gold coins, U.S. and European and elsewhere, patiently waiting for Walter’s plan to play out.   A gold coin appraiser believes there to be at least $7 million in gold at scrap rate, and I’d bet at collector’s prices it’ll be even more.

Walter has a lesson for you all, though - if your fear of economic collapse outlives your ability to spend the gold, then you’re not getting your money’s worth out of your preparations.  Gold sitting in a garage doesn’t earn anything more than the inflation of a dollar: just imagine how much money he spent acquiring all that gold in the first place.   Walter had good intentions, but in the end, you can’t take it with you, so he failed to benefit from all of his planning efforts.