Precious Metals

We are dealers in gold, silver, and platinum metals including the following:

Gold: US Eagles, US Buffaloes, Canadian Maple Leafs, South African Krugerrands, Mexican 50 Pesos, Australian Nuggets and Austrian 100 Coronas.

Silver: Pure bars ranging from 1 ounce to 100 ounce in weight, as well as pre-1964 US silver coins in all quantities, US Eagles, and Canadian Maple Leafs.

Platinum: US Eagles, Isle Of Man Nobles, Canadian Maple Leafs, and Australian Koalas.

All bullion transactions must be done in the store. Payment may be made with cash, local cashier's check (made payable to us) or personal check. Personal checks must clear your bank before merchandise is delivered.

No charge cards may be used for precious metals transactions.

[Most Recent Quotes from www.kitco.com]

Please note that these metals prices are transmitted to us from an outside source and may not be valid for transaction purposes.

Frequently Asked Questions about Precious Metals:  Please Note - We offer the following information as a free source of help.  Although we have been in business for many years we do not believe we always have the best answer.  If you come up with better answers, please share them with us.  If you have a pertinent question which is not answered below please contact us and we'll do our best to help you.

1.  Q: What does bullion mean?   A:  In our industry bullion means precious metals - most usually gold, silver, and platinum.

2.  Q: What is a bullion coin?  A: This is a coin that has no collector value and has a market price based largely on the actual price of the metal it contains.

3.  Q: What does Spot Price mean? A: This is the price at which a metal is traded on the current day.  Be aware that many publications and news broadcasts give precious metals prices based on a future value.  Speculators and businesses which actually produce and sell precious metals often try to predict what the price will be at some time in the future and buy and sell precious metals based on this guesstimate, promising to deliver or receive the metal at the time and for the price agreed upon.  Dealers such as ourselves, who actually stock an inventory of precious metals, must use the spot price as the basis for all transactions.

4.  Q: What should I pay for gold, platinum, and silver relative to the spot price?  A: Generally most popular gold and platinum coins should be a few percent over the spot price.  This permits the dealer to make a few dollars.  Keep in mind that most always the dealer's cost is higher than the spot price.  In fact usually you can sell popular bullion gold coins back to a dealer for more than the spot price.  Silver is a little more complicated.   Because of higher shipping and storage costs the percentage markup for silver is greater than for gold and platinum.  Market conditions are always changing for silver, however, so we suggest you contact us by phone to determine the current situation.

5.  Q: Will we ever need to use gold and silver to do business transactions?   A: We don't see that happening any time soon in the US, but we do know that there have been countries in the recent past where it was very advantageous to have some precious metals on hand to make certain purchases.  It just makes good sense in our opinion to have some precious metals on hand just in case there is some economic turmoil.

6. Q: I have a wife and two kids.  There is barely enough money in our paycheck to pay for the essentials of life.  Should we also be buying precious metals? A: Of course not.  Buy the groceries, pay the rent or mortgage, etc.  Precious metals are in a category that is often called "non-productive" assets.  They won't make you any money unless the price of the metal increases.  However, don't spend all your future pay increases on the toys of life.  If you do well in your work, get a nice raise, and go out and buy a boat or a new sports car, or something of that nature - not only will your purchase go down in value (rapidly) but it also will cost a lot just to operate and maintain.   When you get more onto your feet - financially speaking - try taking at least a little bit of the excess and putting it into precious metals.  It will be a good habit.

7. Q: Why do you recommend gold and silver and not something else as an economic protection?   A:  Money is socially defined.  Here in the US at various times and in various places items as diverse as sea shells, lumber, corn, tobacco, and liquor have been used as mediums of exchange (i. e. money).  These were accepted as payment for goods and services simply because the society in which they were used accepted them as such.  In written history, no matter how far back you go, gold and silver have always been used as money.  Although there is no guarantee that will continue to be the case in the future, we feel it is a safe bet that if and when there is an economic crisis anywhere in the civilized world these metals will be what is turned to as "real" money.

8.  Q: How much of my portfolio should I invest into precious metals?  A: This really depends on several factors - your age and health, total assets, need for income from assets - to name a few of the more obvious.   If you are in a position to comfortably invest 10% of your net portfolio into precious metals we feel this is sufficient.  Keep in mind that buying precious metals is not considered an investment in the common meaning of the term. 

The ownership of precious metals should be considered more as a protection against economic disaster than as an investment.  Assuming there is no increase in their price, the cost of this protection includes your original purchase price, any lost interest or capital gains income that would have been derived from investing the money conventionally, and the cost of storage.  Like any insurance, you should feel that the money you pay out is a form of protection. 

I personally have a life insurance policy which is designed to pay off my debts should I die while owing money.  I do not want to burden my family with a lot of unpaid bills.  Each year as I grow older the annual cost of the policy goes up.  I can count up several thousand dollars in paid premiums which are not worth anything, but I am glad to have paid the premiums and had the peace of mind of knowing that my finances would be put into order if disaster happened.  Owning gold and silver is a bit like that.  You should be happy with the increased peace of mind that you can have by owning gold, silver, and platinum, but you should be even happier if the "precious metals insurance" is never needed.

9.  Q: Why gold and silver as a protection, but not platinum?  A: Good question.  We like gold and silver better simply because they have such a track record of being accepted all over the world and throughout history as stores of wealth and as mediums of exchange.  We once had a customer who escaped Vietnam as one of the "boat people."  He owned some gold, about nine ounces, which he used to pay his way out of Vietnam.  Once he got to this country and got established he saved his money and bought some more gold.  Why?  We feel the answer is obvious.  The gold he had accumulated back in Vietnam served him well when he needed it to save his life, and he just might find it handy to own gold at some time in the future

10.  Q: Where should I store my precious metals?  A: Many people use safety deposit boxes at banks, and we personally believe this is quite safe.  For those who are afraid of bank closures and/or government seizures of assets held in these boxes there are a couple of widely used methods that are effective but that have inherent risks.  One solution is to put a safe into your house and keep the metals there, and another is to bury your treasure where you can dig it up later. 

If you use the home safe method do what you can to conceal the safe, get a good one that can be anchored in place, and don't be bragging around that you have it.  Even a Class 30 jeweler's diamond vault can be defeated by journeymen safe crackers given enough time. 

Aside from concealing your safe, keeping quiet about having one, and anchoring it down, it is also a good idea to have another safe, filled with items of lesser value, and more accessible to the crook.  Let this safe not be anchored down.  If it gets carried off, so much the better.  If someone breaks into your house while you are home and forces you to open this "decoy safe" we feel it is a good idea to have some things of moderate value inside.  If it turns out to be full of worthless merchandise the crook(s) will likely be pretty sure there is another hiding place in the house.  In most cases they will know how to encourage you to help them find and open it.  We believe it is better to let them get away with several hundred dollars than to anger them or risk making them suspicious about other hiding places. 

If you use the buried treasure method, please have a fail-proof system for finding the goods later and let a couple of very trusted confidants know where it is hidden.  We have had many people come here and rent metal detectors to help them find their buried items because over the years they just didn't recall exactly how many steps and in which direction from that big oak tree the hole was.  Only part of the time are they successful in relocating the metals using a detector. 

Years ago we did some business with a retired prospector who didn't trust banks.  This man owned quite a bit of rural land and a fair amount of construction equipment, including bulldozers and backhoes.   Although he was in bad health he told no one where he buried his metals, and we are pretty sure he did bury them because he told us so.  We also think he buried them pretty far under ground, using his construction equipment.  When he died his secret of where the treasure was hidden died with him.  Maybe some day in the far future an archeologist will find the treasure, but who knows. 

In more recent case my sister, who helps elderly people liquidate their personal belongings when they need to move into care facilities, asked to use a metal detector.  One of her clients insisted he had buried a large quantity of silver coins under his front porch years ago.   He had dug several large holes looking for the coins and had hired a laborer to do even more digging, but no coins had been found.  My sister said she mostly wanted to use the detector just to convince the client that his memory had failed him.  She told me she was pretty sure there were no coins under the porch because the "whole place" had been dug up. 

Well, surprise - surprise.  The coins were there after all.  As the old man thought he had done, he had buried them.  Even though it looked like all of the dirt had been dug up from under the porch, not all of the spots had been checked.  This is more evidence for making sure you have a fail-safe method of remembering exactly where you have put your treasure.  Also, if you do bury precious metals we recommend that you put them into some sort of heavy plastic container that won't be damaged by soil conditions.  

One thing we definitely do not recommend:  Do not store your metals in a private vault.  Unlike bank vaults, these places are not closely regulated.  We know of such a storage vault in our own county that belonged to a company which went bankrupt.  Apparently they staved off financial ruin for a few years by selling off precious metals that were in their care.  'Nuff said about that!

11. Q: You accept credit cards for other purchases.  Why can't I buy precious metals with my VISA card?  A: Precious metals have a very small profit markup.  Our store pays VISA about 2.7% for using their service.  Currently our profit on a one ounce gold coin (not including shipping to us) is five dollars.  Obviously, if we have to pay about seven dollars to VISA to complete the transaction we wind up not making any money.  In fact we actually lose money.  All major charge cards have costs similar to VISA.  We are not singling them out to be picked on.

12. Q: What if I agree to pay a little more for my gold coins, say three percent, can we just add that onto the the price of the coins and then put them on my card?  A: Sounds good, but we have found out the hard way that this is not a good idea.  As you may know there is such a thing known as Credit Card Fraud.  It comes in a variety of forms, but one of the most common is to use someone else's card to make a purchase.  As gold coins have such a small markup, a person committing such a fraud can purchase gold coins from one dealer and then take them immediately somewhere else and cash them in for almost as much as the purchase price.   Potentially the poor selling dealer becomes the victim, even if he gets an authorization code from the charge card company.

13. Q: If I can't use my charge card, then what do you accept as payment? A: If you want immediate possession of the precious metals you can pay with cash or a cashier's check from a local bank.  The check must be made out to our company and not to yourself.  You may also pay with a personal check.  If you pay with a personal check we will not deliver the merchandise to you until ten working days have passed.  You will own the metals at the time of payment.  Fluctuations in the precious metals market will have no effect on your taking delivery once the holding period is over.

14. Q: I have heard that all large cash transactions must be reported to the IRS.  Is this true?  A: By law, any cash purchase of over ten thousand dollars is reportable.  According to the IRS this requirement is to help discourage illegal drug trafficking and money laundering.   There is certainly nothing illegal about buying more than ten thousand dollars worth of metals and paying with cash, but we do have to report it when that happens.

15. Q: How about if I give you a cashiers check for $6,000 and cash in the amount of $4500.  Is that reportable?  A: Not at this time. According to the Patriot Act cashiers checks are not reportable as cash. Please note that it is possible for the regulations to change from time to time. We try to keep this site current, but there is sometimes a delay in posting the latest changes.

17.  Q: Do I have to pay sales tax on my bullion purchase? A: The state of California does not require that sales tax be collected on purchases of over one thousand dollars.  Amounts lower than that are taxable.

18.  Q: Why does silver have so much of a greater price difference percentage-wise than what a dealer will pay me for it and he will sell it to me for? A: Silver is much lower in price than either gold or platinum;   hence much more of it is required (weight wise) to have the same value as gold or platinum.   As you can readily see, it is much more expensive to store and ship silver than the same dollar amount of gold or platinum.  Storage and shipping costs are what drives up the cost of ownership.

19.  Q: Do you ever have "Deals" on precious metals?   A: Once in awhile someone tells us they know where they can buy gold for a ridiculously low figure, say $100 per ounce, because someone is in financial trouble and needs quick money.  This is always some sort of idle gossip or worse yet a scam.  If someone has precious metals and needs money all they need to do is sell off what they have to at fair market value.  If you hear about some sort of great deal on any precious metal, be prepared to be cheated should you decide to get involved.  Earlier today we made several purchases from customers and needed to put money into our bank account.  We readily located another dealer who bought several thousand dollars worth of gold from us.  We delivered the merchandise, put his check into our account, and kept right on going. 

A few years ago a very nice older gentleman told me that he would buy all the Mexican 50 Peso gold coins we could get him for $250 each.  At the time they were worth about $400 each and could be sold for that amount practically anywhere in the world.  Naturally I politely told him we just couldn't sell him any for the price he was willing to pay.  He kept giving me a knowing wink, telling me he would be available in case I got in any extras that I needed to sell fast, that here was his phone number, and he would be waiting for me to call.   I finally got him to leave the store.  He hasn't been back, and I haven't called.

20. Q: How do I know I am getting genuine merchandise and not worthless junk.? Do you give certificates of authenticity with what you sell? A: First and most important, deal with a reputable dealer!  There are small scales and measuring devices available to determine the genuineness of gold coins. One popular brand is marketed under the name of Fisch. To locate them we recommend doing an internet search for their address. A word of caution: do not use one of these scales to verify the genuineness of collector coins. Gold US counterfeit coins, for example, almost always will pass the test. The reason is simple - they are made from real gold. They have been counterfeited from real gold because their collector value is greater than their metal value.

No, we don't give out certificates of authenticity - and for a very understandable reason.  What if you buy a genuine coin from us and we give you a certificate.  Later on you sell the coin but have misplaced the certificate (no matter to us or any other dealer because the only concern is that the coin itself is genuine).  Someone else finds the certificate, takes it along with a piece of phony gold and sells it to another person.  Now we have a bad situation.  Our certificate is with a counterfeit coin.  We don't want that to happen.

21.  Q:There is no precious metal dealer in my area. Can you sell to me through the mail? A: Generally the answer is no.   We do have customers who have moved away from us to such areas and we have continued to sell to them.  Also on occasion we have shipped gold to a customer because he has a friend or relative who recommended us.  If you just can't find a place to do business where you live you are welcome to contact us and we'll try to help.  We are increasingly aware of companies on the internet who want to sell gold and silver through the mail.  We do not know enough about any of these to either recommend for or against them, but we do caution you to be careful to get good references before dealing with anyone in this manner.

22.  Q: What do I need to test gold for .999 fineness?  A: This is not practical for anyone other than a refinery or an assayer.  According to John Herlivec of San Diego Refining a "fire assay" can test gold to .999 fineness.  A laboratory scientist using a spectroscope can test gold to .9999 fineness.  If you are interested in testing "pure" gold coins to see if they are not counterfeit, the little scales mentioned above seem to be quite accurate.

23.  Q: How many ounces of silver are in a $1000 face value bag of 90% coins?  A: Approximately 715 oz.

Back to the Home Page

Copyright 2004 Escondido Coin & Loan, Inc. All rights reserved.
Revised: September 25, 2009