Take special care to avoid offers of independently graded modern bullion coins that are IRS-approved for inclusion in IRAs, but priced at very high, and often unsustainable, premiums over their gold content. Much of that premium goes to the promoter in the form of mark-up and commissions. This includes common contemporary items sold as "first-strike", "early issue", "first release", Mint State 69, Mint State 70, Proof 69 and Proof 70, as graded by the independent grading services including the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC).
Quite often these items are promoted as exceptionally rare and desirable when in reality they are not substantially different from the typical bullion coin items priced on coin and bullion price page (See right, Related Links). At NGC, for example, 99.6% of the one ounce gold American Eagle business strikes submitted for review graded either Mint State 69 or Mint State 70 -- the two highest grades at the services. Fully 46% of submissions received a Mint State 70 grade, the ultimate rating. As for the silver American Eagle one ounce coins, 99.5% of submissions (or nearly 5.7 million coins) made the top grades of Mint State 69 and Mint State 70. Proof American Eagles, both gold and silver, obtain similar results when submitted to PCGS or NGC for grading.
Taking this analysis a step further, using these numbers as a guideline, anyone willing to pay the grading fees (about $25 per coin) could submit gold American Eagles to one of the grading services with a high probability of obtaining a similar result. In short, just about everything submitted comes out superior quality by the promoters' definition. What's more, numismatic experts know that if five times the number of coins were submitted, the grading services would likely report a high-end population roughly five times the current level.
These numbers are a testament to the U.S. Mint's coin-making prowess, but a blow to the promoters' definition of rare and desirable. It also greatly weakens claims of any future appreciation due to these items' alleged scarcity. In our view, the better approach is to stick with the ungraded, high-quality regular issue Mint items which trade in the marketplace at tight spreads. Avoid entirely the telemarketer manufactured grading, first-strike scenario and its heavy mark-ups.