Listener Question:
“I inherited a collection of gold coins from my parents who always told me to hang onto them—gold was the ultimate backup if the US dollar ever lost value. For decades, I’ve held onto them, and recently had the collection evaluated at $250,000. Now that I’m 68 and gold prices are high, is it time to sell? Given today’s economic and political environment, does selling now make sense? I’ve spoken to an auction house that charges a 20% commission. How do I know a fair fee from one where I’m being taken advantage of?”
Gold’s Role in a Portfolio
Gold has always carried a reputation as a hedge against uncertainty—whether inflation, market volatility, or geopolitical instability. It’s no surprise that your collection has gained so much value in recent years.
But it’s important to remember that gold is far from “steady.” In fact, gold is just as volatile as stocks. Prices swing significantly year to year, which means holding a large position comes with its own risks.
That raises the question: do you need $250,000 in physical gold right now?
Holding Gold vs. Simplifying with ETFs
Owning physical gold comes with costs—insurance, safekeeping, storage fees, and the logistical challenge of eventually selling it. If your goal is simply to keep gold as an inflation hedge, shifting some or all of the collection into a gold ETF may be more practical. ETFs offer the same exposure without the hassle of storage.
On the other hand, if your goal is to keep gold as a “true backup” in case of extreme scenarios, it may make sense to retain a portion of the coins—perhaps $50,000 worth—while selling the rest.
A diversified portfolio can certainly include gold, but it rarely makes sense to hold a large portion of wealth in physical bullion.
Taxes on Collectibles
Before selling, review the step-up in basis from when you inherited the coins. Your taxable gain will be the difference between their value at the time of inheritance and their current value.
It’s also important to note that gold, as a collectible, is subject to different tax treatment than traditional investments—capital gains rates on collectibles can be higher. Given the dollar amounts here, consulting with an advisor is worthwhile.
Auction Fees: What’s Fair?
A 20% commission for an auction house is unusually high for gold. For furniture, art, or antiques—assets where demand is uncertain—such a fee might be justified. But gold is a commodity. Its value is clear, and buyers are plentiful.
If some of your coins carry value beyond the gold content (for example, as rare collectibles), an auction house could help maximize their sale price. But even then, a 10% fee is more typical.
With a collection valued at $250,000, the auction house stands to make a very healthy return, even at a lower rate. It’s worth negotiating.
What This Means for You
Selling now could make sense if:
- You no longer want the burden of storing physical gold
- You want to rebalance your portfolio into more productive assets
- Or you simply want to capture today’s high value
If you do decide to sell, avoid overpaying in fees. Push for transparency, negotiate the commission, and make sure you understand both the seller’s and buyer’s premiums.
Gold can play a role in your portfolio, but it shouldn’t play a starring one.
This post was adapted from a recent episode of the Scholar Wealth Podcast. For more insight, listen to the full episode.