In the world of finance, the word “arbitrage” refers to buying something in one market, and simultaneously selling it in another, profiting from a temporary price difference. According to Investopedia, this form of profit is considered practically risk free for the investor/trader. 😀 Well I have recently found such an arbitrage opportunity in the gold bullion market.
Introducing the 2014 Howling Wolf 99.999% Gold Coin
Several days ago I went out to buy the 1 oz. pure gold 99.999% – 2014 Howling Wolf coin made by the Royal Canadian Mint. The Howling Wolf gold coin cost me $1,389 CAD to purchase. The slight premium over the spot price of gold is due to the spread charged by the broker and the unmatched purity of the coin (most bullion is only 99.99% pure gold.) Details below with proof of purchase.
If you live around Vancouver you can buy it from the VBCE, which is where I bought my coin. The current quoted price on their website is about $1,400 CAD. In Calgary albern.com currently sells it at $1429 CAD. In Florida, gainesvillcoins.com sells this coin for $40 over spot per oz. If you live around Toronto you can visit the Canadian Bullion Services to buy the coin. You can also order it online and pick it up in their store or have them mail it to you. In fact many of these companies I mentioned ship worldwide. There are hundreds of dealers across North America so this coin is relatively easy to obtain.
Howling Wolf .99999 Gold Coin Review
This is one of the best coins I’ve ever seen. The design of the wolf on the reverse side is very detailed, and the finely wrought texture of the wolf’s coat and the realistic portrayal of its gaze is almost lifelike. 🙂 The obverse side of the coin features the exquisite profile of Queen Elizabeth II and stamps for the year, and the face value of $200. The face value is what makes this coin legal tender so there are no taxes, tariffs, or customs charged on this coin. It also means this coin will always be worth at least $200 CAD, which is nice to know in case gold ever falls below $200/oz. Haha, yeah right. 😛
Each 2014 Canadian Gold Howling Wolf coin comes sealed in an uncirculated assay card, signed by the chief assayer, which is basically a quality assurance expert who makes sure each coin meets the highest standard of purity and quality. 😀
Personally I’m going to hang on to this coin and maybe give it away on this blog some day. However if you want to make some quick and easy money, you can try to sell this coin on eBay for a premium. 🙂 Below is a step by step tutorial for anyone who might be interested.
How to Make Money From this Coin
We’ve already went over where to buy the coin. You can Google “bullion dealer in (your city’s name.)” to get started. 🙂 The price of gold is constantly fluctuating but as of this post gold is currently at $1350/oz CAD ($1200/oz USD.) With a slight premium the Howling Wolf coin can be found for about $1,400 CAD each. 🙂 Next, sign up for an eBay account if you don’t already have one, and list the coin on it for $1,700 CAD, or whatever the equivalent USD amount is. According to previous listings that sold on eBay, buyers are willing to pay about $1,700 CAD for this coin. 😀 The last one that was sold actually went for $1,725. And at the time of that transaction the spot price of gold was about the same as it is today.
So to summarize.
- Step 1: Buy 99.999% howling wolf gold coin for $1400 from bullion dealer
- Step 2: Sell it on eBay for $1700
- Step 3: Make $300 in profit before fees 😀
<edit> Thanks to some smart commentators below, it’s estimated that about $200 in fees will go to eBay and PayPal after selling the coin for $1700. This means the final profit on this coin flip 😀 will be roughly $100. </edit>
Of course you can also use leverage to potentially increase your investment gains. For example, borrow $7,000 on a bank loan or line of credit. Buy 5 of these coins at $1400 each. Sell all 5 coins on eBay individually. Thus, make $500 in profit before interest expense. That’s a lot of profit without even using any of your own money. Reminds me of my first swing trade lol.
However there are risks to this bullion arbitrage plan. Since now that I have revealed this secret, the eBay market will probably get flooded with 1 oz gold howling wolf coins. 😕 If that’s the case then you’d need to drop your price down to about $1650 in order to make a quick sell. But at least you’d still make a profit. Another risk is eBay fraud so make sure you’re dealing with a reputable buyer. The price of gold could also fall dramatically after you buy the coin and are not able to liquidate it on eBay without taking a loss. 🙁 There’s also the small possibility where you can’t even get rid of the coin at all. However personally I don’t think owning some physical gold bullion for awhile is necessarily a bad thing. 🙂
Random Useless Fact:
In the entire written history of Canada, there is not a single incident of a person being killed by a wolf.
You don’t practice what you preach. Have you actually tried this method and successfully completed a $300 gain?? Now you’re telling your readers to go and make $300 easily off by buying the Howling Wolf Gold coin and selling it off Ebay? What if the Ebay buyer says they never received your coin and pulls the Paypal buyer insurance claim on you? Then what? You lose your coin and don’t get payment from buyer… Just saying!!
Thanks for raising that important point. What a lot of eBay seller do is make shipping insurance mandatory. This way the item is tracked and requires the signature of someone with an ID that matches the name on the package, which proves the buyer received it. And if it gets lost in the mail the carrier will pay for any damage. This protects both seller and buyer. 🙂 Sellers can also mention in the description that the coin will only be sent to verified PayPal addresses to make it safer. eBay has other tips on its website about how to conduct safe transactions. Most fraudulent activities seem to be conducted by the selling party, and eBay just bans their IP address for life. I think someone buying a $1700 item would be more nervous than someone selling it. But scammers come in all variations on the internet lol. Legitimate people can decide if the risk is worth the reward for themselves.
Great lil idea. Arbitrage exists especially with unknowing consumers. Reminds me when the iphone 6 came out, people would line up and buy them and make a craigslist ad selling them for $200 over the list and they would do this for 3 days straight making thousands of dollars. Most people thought they were all sold out but little did they know Apple store had lots of stock.
Good tip on selling coins over bars on ebay. I bought a bar once and got dinged with sales tax once. Lesson learned!
Gold is getting at some good levels and I think imma pick some more up soon.
I remember people lining up very early at the launch of the iPhone 6 and 6 plus. But I didn’t know Apple stores were withholding their stocks. Not sure if smart tactic or unethical business practice lol. I have about 1% of my portfolio in physical silver and gold. Collecting them is like a hobby to me so I don’t include their value in my monthly net worth calculations.
Just out of curiosity, doesn’t ebay charge you a percentage? if so, how much is that and doesn’t that reduce your potential profit? (I’ve never bought or sold anything, so these are real questions btw). Thanks
Good observation, Chris. 🙂 I totally forgot about how high the eBay fees can be. I don’t remember how how their commission structure works exactly but according to eBay’s estimator selling the coin for $1700 would cost $170 in fees. That’s a lot more than I expected. Brian linked to another calculator which produces an even higher fee. I think it depends on assumptions like shipping charges, but overall I’m sad to admit that the real profit at the end of the day is more like $100. I will make a couple of edits to the post. Thanks for your helpful input. 😀
Have you figured what the eBay and Paypal fees would be? That $300 profit would get eaten away really quickly. Using the calculator finalfeecalculator.com/ and saying shipping costs nothing and cost you nothing that $300 profit is quickly taken down to $80 (sales price $1700 initial cost $1400). Not really worth it IMO.
Maybe that website is garbage… but it doesn’t make the flip seem quite as worth the effort
Thanks for taking the time to look that up, Brian. 🙂 Yikes, the fees are quite high aren’t they. That certainly caught me off guard. 😐 I agree. Now the arbitrage looks less interesting. It might be worth it for someone who has a lot of extra time but probably not worth it for many people who have busy lives 🙂
Ebay’s current fees for coin & currency are 6% and Paypal charges 2.9%. That takes ~$150 out of profits, plus whatever it may cost for shipping and insurance.
That’s good to know. Thanks for the hard numbers. The combined time to buy, list, and ship the coin will probably take 1 hour or so. Making $100 or $150 for one hour of work isn’t too bad. It’s just not as great as I initially thought 😕 And like anything else in life, there are no guarantees. 🙂
After reading the comments and eBay fraud, it looks like riskier business than penny trading 😀 . Quick money always comes with big risk. So, lets make slow but steady progress.
Looks like I will still need to rely mostly on my dividend portfolio to retire. Too bad there’s no such thing as a free lunch. But if there were I’d like to be the first to discover it. 🙂
I’ve dabbled a good amount in hustling via eBay and stopped because charge-back fraud is super-obnoxious. If you’re going to do this — or perhaps continue to do this — you’d better be vigilant about making sure your eBay buyers have long positive histories. You’re protected a little bit because they have to give you a physical address in order to receive the coin, but at $50 margin per item, you just need one transaction in 30 to go sour before you’re back where you started.
Now, if you’re already one of the group of power-sellers who eBay treat like gold, you might be safe… Anyhow, good luck
Thanks for the advice, Mario 🙂 I’ve only done a few dozen eBay transactions and all of them were small items but it sounds like the e-commerce space can be a really big arena where you have to know what you’re doing. Maybe sellers will have better luck with Craigslist or Kijiji lol.
“[…] and the unmatched purity of the coin (most bullion is only 99.99% pure gold.)”
Just so you know, when a 1oz bullion is made, the total weight of pure gold (100%) is equal to a FULL troy oz. So even if you have a 1 troy oz gold bullion with a purity of .925, you still have a full 1 troy oz of gold in it, the bullion total weight would be a little more than 1 troy oz in this case.
BTW, you have a lot of “negative” comments in here, but I still think this is an opportunity. Yes selling on eBay has some risk implied and you have to be aware of this, but some people are still willing to pay 1,700$ for this beauty… so if you can find them out of eBay (kijiji, personal webstore like I built, etc.), or manage the risk… some big money can be made!
That’s a great piece of info about bullion purity. 🙂 Managing risk is the hard part, but it’s necessary in dealing with any kind of investments.
It does sound like a tempting way to make a little extra cash.
But personally, I would recommend not letting it distract you from your main trade. You will find (and probably already found) that the more you work at your main job, upgrade your skills and even side jobs in the same trade/industry; the more valuable you will become. Your skills will improve, you will become more efficient, you will become faster and more knowledgeable.
It may be a far more profitable way to earn cold hard cash, instead of trying to compete in the gold merchant industry.
I have an uncle obsessed with minimizing his taxes. He spends a lot of money on accountants, devotes much time getting through audits. Always moving funds around between shelf companies. Running around trying to make everything look non-arm’s length. And that’s all good and everything; but it just seems like it’s a larger opportunity cost since it’s taking him away from the one thing he is most good at…. farming!
I think so too. I’m going to keep my coin and wait for it to appreciate instead of trying to resell it any time soon. A simple options trade would easily grant me $100 anyway if I wanted the money, and is way less hassle than brokering gold. Hopefully your uncle has made enough money over his career to retire comfortably soon. 🙂
Haven’t looked into holding physical gold or silver. The idea of getting a safety deposit puts me off. 🙂
It’s kind of a novelty thing for me 🙂 but not everyone is interested in this type of thing. Some people only buy the silver coins. The 1 oz maples are just $20 each right now. No big deal if you lose a few.
I’d like to know more about the banana. It’s a rather curvy banana. Did you put it there for scale?
Yup, I included the banana for scale. 🙂 It was a 7 inch organic Cavendish from a local IGA Marketplace. I ate it yesterday.
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