Is purchasing physical metals (Gold, Platinum, Silver) ever a good idea?

[braumeister]

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Originally Posted by MichaelB My brother has a couple of estate sale businesses as clients. He asked them what they do, they both named the same coin dealer.

Thanks, that's a good suggestion. I'll look into that.

[Big_Hitter]

Are you guys trying to sell the coins for numismatic value or just the value of the metal?


When I bought mine, it's just the value of the metal plus a little "extra" for coin form - Gold Eagles, Vienna Philharmonics and Silver Eagles.

I used to use a silver eagle as a ball marker (back when they were worth $6) but someone swiped it.

[braumeister]

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Originally Posted by Big_Hitter Are you guys trying to sell the coins for numismatic value or just the value of the metal?

If a coin has a published wholesale value of $20 or more, and the melt value is around $10, it seems worthwhile looking for something closer to the former.

[eytonxav]

For us, we inherited our gold coins, so holding has both sentimental and collection value vs the physical value of gold.

[Big_Hitter]

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Originally Posted by braumeister If a coin has a published wholesale value of $20 or more, and the melt value is around $10, it seems worthwhile looking for something closer to the former.

agreed - when I was in the market I was looking at buying bags of 90% silver coins but decided to get the silver eagles instead. sounds like yours may have some numismatic value, mine are just metal.

[Badger]

I have never considered purchasing any precious metal in anticipation of some kind of financial or government collapse. I might, however, stock up on beans if the future appeared to be that bleak. They would be more than worth their weight in gold but I don't think I would trade.

Cheers!

[jerome len]

I've been buying gold since it was $300 an ounce......I've never sold any gold.....ever.
Now I give my kids an ounce of gold each Christmas; my grandchildren 2 ounces of silver.
My reason? Look at the world and all the chaos.....and if they don't need it.....I ask them to pass it on to their children. But.....I don't consider gold as an investment.....I use Vanguard and Fidelity for that

[EvrClrx311]

What are peoples thoughts about the possibility of space mining? There are so many opinions and variables at play here, and I understand some think it is absolutely absurd, but there are real companies spending millions right now planning out a path forward to extract resources from asteroids. Obama passed a law recently stating that essentially space rocks are fair game to claim rights to... as in, they don't belong to anyone. Does this concern anyone? Despite peoples beliefs as to the feasibility of such a technological adventure... it is already impacting the markets in a real way. The reason Platinum is sitting lower than gold right now is in large part due to a report released in 2011 showing that a space rock which flew by very close to earth contained more platinum than all that has ever been mined on earth.

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On July 17, platinum prices plunged to their lowest level in 6.5 years. That same day, NASA identified UW-158, a half-mile wide asteroid hurtling by Earth's orbit that so happened to contain an estimated $5.4 trillion worth of platinum. Coincidence? Well, consider this: According to the U.S. Geological Society, the world mines a mere 190 tons of platinum each year due to its extreme rarity. By comparison, the "Platinum Asteroid" is estimated to contain 90 MILLION tons of platinum in its core. At that rate, it would take 468,750 Earth years to excavate the asteroid's natural reserve. "This has made [US-158] one of the primary targets of the asteroid mining company, Planetary Resources," writes a July 20 article. So, it stands to reason: If, one day, robotic mining succeeds, platinum will no longer be a rare precious metal as the “astronomical” surge in supply dilutes prices. Read more: http://www.elliottwave.com/freeupdat...#ixzz40XBhAB3A Follow us: @elliottwaveintl on Twitter | ElliottWaveInternational on Facebook

Now, it seems absurd that that information alone would tank the price of platinum... but it essentially has. The reason I think it's absurd is because it shows that emotions play into the pricing point. The logistics of actually obtaining ALL of that platinum from a rock that is now heading VERY fast away from earth and won't return until 2036 is ludicris... but the report itself had a major impact on the market for platinum. At least many people are pointing to that as the reason why platinum has dipped so substantially. If that same rock had gold in it (which many do) would we see the same thing happen to the global gold price? Speculation... yuck.

Cost/Reward? Obviously there is a huge cost in going to an Asteroid, mining for precious metals and returning them to earth. This is also a bit of a self defeating en devour from a supply and demand side of things.

I'm just rambling. Personally, I think it would be at least 60 years before autonomous robots could successfully mine anything from asteroids... so not in my lifetime. However, I am interested in how the development os such technologies may impact the market for precious metals based on these speculations as to what it'll do to the global supply.


Gold does have very valuable properties as it relates to electronics and space travel (anti corrosive properties). Platinum as far as I can tell is really only used to catalytic converters.

[Done]

I inherited a significant amount of gold and silver in the mid 2000’s and it was by far my best performing asset through the recession and up to 2012. I happened to sell most near its high but still keep 5% of my investable portfolio in gold coins and an ETF. This portion has done poorly for the last 3-4 years as equities climbed -- and it delivers zero income. Gold also has a higher max capital gains tax rate since it is considered a collectible.
https://www.bogleheads.org/wiki/Gold#Taxation

So I can't recommend a substantial amount in asset allocation, but the timing happened to be in my favor. Demand for gold is unpredictable as it is used in jewelry, industry and central banks, and is a hedge against the dollar. It is marketed as a vehicle for safety but it does not always respond that way.

[sengsational]

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Originally Posted by scrinch ... So what about the middle ground, where the dollar tanks and we get 100-200% inflation for a couple of years before the situation stabilizes? That scenario has occurred in many, many places over the recent (and ancient) past, usually when a government overspends and then coins or prints more money to pay its bills. That could end up in a devaluation of currency by a factor of 2 to 5, say, like in the Asian crisis of 19 years ago, or perhaps more like in the cases of Argentina, Chile, Venezuela.

I think something like this is probably more than ten times as likely than the direction most posters here take whenever financial instability is mentioned: guns, bullets and whiskey. And it's understandable....most posters here are savers, and savers need financial stability to feel good. Even the thought of financial instability causes a "throw up your hands and give-up" mentality....everything is lost, savers and non-savers are on equal footing....all that saving for nothing. It's too much to bear.

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Originally Posted by Lsbcal Has anyone here actually tried selling their coins? I think there is quite a spread and also some shady characters out there.

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Originally Posted by braumeister Thanks, that's a good suggestion. I'll look into that.

I did some research into that recently. Not for me, but for someone I'm helping out.

Some modern mainstream 1oz coins can be purchased for as little as 2% above spot. That's because minting adds value. So the market value of the coin might 1.02 * spot price. If you end-up with the spot price in your pocket after all is said and done, you've paid a spread of about 2%. But that kind of deal is only available with the mail order outfits (kitco is an example). If you walk into a coin shop, they'll take you for about 3.5 or 4% (if they're not trying to rip you off). I was surprised to see that the spread was the smallest on old non-collectable quality english sovereigns.

[VFK57]

I know 2 persons who lived through USSR political and economic collapse. They told me that the only currencies acceptable for food, clothes, services of any kind was jewelry and Gold. I still think that despite the fact that Gold is not investment at all, it is worth to keep some coins, just in case. Also I heard a story like one businessman in early 1900s came to New York where 1Oz gold coin would buy a night in best hotel, nice dinner etc. Today, a century later, 1 Oz Gold = $1,227 what surely would buy you a nice hotel room, good dinner with some change. Of course a century ago $20 per 1 Oz vs $1,227 today - here is the 100 years inflation.

[braumeister]

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Originally Posted by sengsational Some modern mainstream 1oz coins can be purchased for as little as 2% above spot. That's because minting adds value. So the market value of the coin might 1.02 * spot price. If you end-up with the spot price in your pocket after all is said and done, you've paid a spread of about 2%. But that kind of deal is only available with the mail order outfits (kitco is an example). If you walk into a coin shop, they'll take you for about 3.5 or 4% (if they're not trying to rip you off). I was surprised to see that the spread was the smallest on old non-collectable quality english sovereigns.

I think you're right, in terms of what you're talking about, but let me give an example of what I encountered. Just a typical coin I have.

1885-O Morgan dollar, condition EF45. Should be worth about $28, but I'm offered $10. I can appreciate that the $28 is selling price and the dealer needs to make a profit, but I think he ought to be very happy with 75% profit (paying me $16).

There aren't that many coins, and it's not much money in total, but I'm severely annoyed at how mercenary some of these small coin shops can be.

[braumeister]

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Originally Posted by VFK57 one businessman in early 1900s came to New York where 1Oz gold coin would buy a night in best hotel, nice dinner etc.

This is a well known comparison, and you're absolutely right.

The standard way of putting it is that an ounce of gold is worth the price of a good men's suit. This has been true for centuries.

[soupcxan]

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Originally Posted by braumeister I can appreciate that the $28 is selling price and the dealer needs to make a profit, but I think he ought to be very happy with 75% profit (paying me $16).

If he buys your coin, it may sit in the display case for a year, and meanwhile it is tying up his working capital, and he has overhead for the store to cover...rent, insurance, salaries, etc. So maybe his expected margin on your coin is not all that crazy. Or maybe he's just trying to rip you off, I don't know.

[GravitySucks]

I have no precious metals but am thinking I should hold enough to bribe a border guard if I ever need to get outta Dodge.

[CherylGrrl]

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Originally Posted by calmloki Back in 1999 we bought some physical gold and a generator and water purification tools and MREs and some .22 bricks and space blankets and all manner of fun stuff to seal in 5 gallon bug out buckets. Not an investment. be.

I'm glad I'm not you.


Sent from my iPad using Early Retirement Forum

[calmloki]

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Originally Posted by CherylGrrl I'm glad I'm not you. Sent from my iPad using Early Retirement Forum

Me too! I like being me. Care to expand on why you feel lucky you dodged the being me bullet?

[dtbach]

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Originally Posted by Al in Ohio Every major nation state keeps tone of gold on hand. Even China went on a massive gold buying spree several years ago to increase the amount they have on hand. The reality is that all governments view gold as the only true monetary standard. It's been that way for centuries. It ain't gonna change. If you don't get, you don't get it. Historically gold has caused huge armies to move into battle and launched thousands of ships. Large sums of cash have caused ... Well a few handfuls of robbers at any one time to pull off some noteworthy bank vault heists. You figure it out. Sent from my iPad using Early Retirement Forum

Historical when? Medieval ages? Not true for the Revolutionary, Civil, WWI or WW2 (or anything since 1600). And when was the last time that armies or air forces targeted gold mines in a war? Last I checked it was always factories and oil fields/refineries.

[gerntz]

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Originally Posted by EvrClrx311 Gold does have very valuable properties as it relates to electronics and space travel (anti corrosive properties). Platinum as far as I can tell is really only used to catalytic converters.

Pt is made into jewelry. My mother's rings were of Pt.

[gerntz]

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Originally Posted by Done So I can't recommend a substantial amount in asset allocation, but the timing happened to be in my favor. Demand for gold is unpredictable as it is used in jewelry, industry and central banks, and is a hedge against the dollar. It is marketed as a vehicle for safety but it does not always respond that way.

Au isn't much "used" for anything. It's retained. Very high recycle rate - highest around.