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Gold, Practical Questions
Old 05-22-2019, 11:26 PM   #1
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Gold, Practical Questions

I am thinking about holding a small amount of my portfolio in 'hard' gold. So I am interested in whether to hold coins or bullion and legitamite sources.(APMEX?) How to minimize handling costs?
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Old 05-22-2019, 11:43 PM   #2
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Good luck..

I like the coins as one of the reasons to hold gold is the fear the world will nearly end. The paper money will be worthless so people will only trade real things like booze, food, ammo, guns, pots, and gold.

The coins are easy to carry in small amounts when out on a trading run, and you don't have as much an issue of getting change.
Besides the bullion bricks you see in the movies are surprisingly darn heavy, if you drop one of those on your toes, it will crush your bones.

I'm assuming you know all about the counterfeit gold around. Problem is, once you buy some, others will wonder if your's is real or not, sort of devalues it right away.

It's possible that in a true destruction of civilization, that even gold (which has no real purpose) won't be valued.

Silver has a real purpose and comes in smaller denominations.

So why do you want to hold some gold vs silver in real form?
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Old 05-23-2019, 03:55 AM   #3
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What about the GLD etf?
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Old 05-23-2019, 05:09 AM   #4
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I have small qty of silver bullion. 1oz rounds and bars are divisible and easy enough to carry. Gold isn’t nearly as divisible, so it’d be fine one or so large purchases.

I prefer bullion as coins frequently have speculative value, which will likely disappear in a black swan event. You can shop around at coin dealers for the best spot price markups.

But if catastrophe strikes hard enough to justify holding pm, then I expect canned food, bottled water, and a reliable shotgun with Boy Scout skills will be much more useful.
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Old 05-23-2019, 06:35 AM   #5
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I've used APMEX in the past and found them good to work with. Unfortunately, you pay a premium up front and have to take a discount when you sell. So you're in the hole right from the start. My personal belief is that it's not worth the trouble but it's interesting to have and to hold. I do believe it will hedge against inflation, but you can't (or shouldn't) really buy enough to make a practical difference if we were to have rapid, high inflation. And, as others have pointed out, it really bad situations, you can't eat it so I'm not sure how much real value it has during those scenarios.
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Old 05-23-2019, 06:52 AM   #6
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In a true SHTF scenario, it will be months before a stable trading system is in place, due to all of those who buy dinner on the way home from the office every night. They will be the ones, who will do ANYTHING to get what they want, and feed their families, causing chaos everywhere, and making it dangerous to venture out.
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Old 05-23-2019, 07:38 AM   #7
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In a true SHTF scenario, it will be months before a stable trading system is in place, due to all of those who buy dinner on the way home from the office every night. They will be the ones, who will do ANYTHING to get what they want, and feed their families, causing chaos everywhere, and making it dangerous to venture out.
This is not true even in the worst cases, such as Venezuela or Zimbabwe owning gold would have been a net positive to be able to avoid societal issues. It was years of a currency that became worthless. See this story in the Miami Herald. This story is from 2018 in the middle of the crisis and a man is calmly walking out of a pawn shop. And in some cases gold affords the opportunity to start somewhere anew:
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Back in 2015, he had to sell three graduation rings — one was his wife’s, one was their daughter’s and one was his — to afford plane tickets for their two daughters to move to United States, away from the Venezuelan economic and political crisis. “It’s harsh. I don’t regret it, but I feel sadness of having the necessity to sell them,” he said.
https://www.miamiherald.com/news/nat...222199935.html
I have been increasing my holdings of gold, I would prefer right now I think to be closer to my upper limit of 10 percent of assets, though I am several percent away from that right now.

I believe the best item to hold is gold bullion, and if you find the right coin shop you will be able to purchase it for a little less than APMEX, at present gold sells at APMEX for about a 4% spread on buy/sell.
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Old 05-23-2019, 08:14 AM   #8
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I bought coins from monex.com when I initially got out of the market before the dotcom bubble in 2000. I still have them.
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Old 05-23-2019, 08:24 AM   #9
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I've bought from APMEX, some from a local coin store, some from a guy at the local gem store (I invested in a crude volume/weight measurement device for detecting some counterfeits), and some from buy/sell/trade websites like bullionstacker or kitco. For the most part I stick to coins: krugs, maple leafs, US coins (I kinda like the older coins... premiums are down on them) and a few Mexican designs just because its fun to fondle a 1.2oz "wagon wheel" sized coin.



Fidelity offers gold and silver coins, but I haven't used them yet... maybe if/when I shift from some in my pocket to holding it in an IRA. They do charge storage fees etc.


For SHTF I don't view gold/silver as being used to buy a ham sandwich but more as a currency that will convert into "something else" that survived a crash or whatever will eventually rise from the ashes. "Don't put all your eggs in one basket" applies to countries and currencies too.
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Old 05-23-2019, 08:58 AM   #10
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What about the GLD etf?
Note that many of these sell off small portions of their gold holdings in order to pay fund expenses. Those sales, which may happen monthly, are taxable to the holders of the fund, leading to many tedious calculations of cap gains or losses on your tax return.
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Old 05-23-2019, 08:58 AM   #11
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The best way to minimize handling costs is to buy only the most popular bullion gold coins like U.S. Gold Eagles, Buffalos or Canadian Maple Leafs. These coins are the most common bullion by far, and have the lowest premiums over spot of any of the minted gold coins you can buy. That means when you sell them, they have the lowest numismatic value relative to the spot cost of gold because they are so popular and easy to transact. (Gold bars have a lower premium over spot but they are generic and not as desirable to hold or to transact.)

Everyone buys Eagles, Buffalos and Maple Leafs, so you'll not be stuck with those coins trying to get a premium on the sale to make your money back. The semi-numismatic and numismatic coins - those that are priced well above their spot cost - are a different game and are not advisable to hold unless you are a collector. They have much higher premiums over spot and are much harder to transact profitably than bullion. Gold bars are not a bad way to hold gold, but you'll have a more limited market for them when selling than bullion coins. It's a lot easier to buy than it is to sell...

Also, the amount of bullion you purchase makes a difference - and it's state by state. If you purchase or sell more than $1,000 in many - but not all - states that purchase or sale is non-taxable. Sales tax can take a huge bite of your profits, so know the law for your state to understand how to avoid taxation on your sales. Places like APMEX offer different prices to sellers depending on the amount you are selling. I always sell to them in $10K+ lots to get the best price but the transaction becomes reportable to the iRS. Interestingly, if you care about IRS visibility, American Eagles are exempt from this reporting... From JM Bullion:

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Gold coins with fractional denominations; Gold and Silver American Eagle Coins; any pieces of foreign currency that were not mentioned in the IRS’s Reportable Items List; and any pieces of US currency that were created subsequent to the list’s creation are all exempt from reporting through a 1099-B form. However, any of the coins or bullion pieces that are mentioned on the IRS’s Reportable Items List are subject to reporting, provided they meet the prescribed quantities. These include 1 oz Gold Maple Leaf Coins; 1 oz Gold Krugerrand Coins; the 1 oz Gold Mexican Onza Coins and any US coin composed of 90% silver, as well as all precious metal bars and rounds.


Interestingly, I always thought that the shipping of heavy metals would be a huge cost and would cut into my profits, but the USPS has a surprisingly cheap way to ship and insure precious metals.
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Old 05-23-2019, 09:04 AM   #12
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I have had good luck buying gold coins and small bars (1 oz) from APMEX before. I would recommend them.

But I have also sold gold and silver in the past year and this is where you have to be very careful. In my experience, one ounce gold bars in assays are by far the best investment They are very liquid, I paid a smaller premium on the buy side than for coins, and I sold them at a very good price relative to market. I never had an issue finding buyers for my bars in assays.

For coins, it has been a different experience. I took more of a hit on them because they are halfway between collectibles and precious metals. So their price is more subjective. I paid a higher premium for coins than for bars on the buy side, but that premium often disappeared on the sell side when I went through dealers (they will use any way possible to lower the value of the coin - often playing on subjective factors like condition).

If I had to do it again, I'd go only with bars in assays.
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Old 05-23-2019, 07:20 PM   #13
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If going into Gold for SHTF scenarios mind as well stock up on water purification, and food as well.
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Old 05-23-2019, 07:26 PM   #14
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If going into Gold for SHTF scenarios mind as well stock up on water purification, and food as well.
Ammo, antibiotics, medical supplies, toilet paper...
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Old 05-23-2019, 07:35 PM   #15
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Ammo, antibiotics, medical supplies, toilet paper...


And small bottles of alcohol
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Old 05-23-2019, 08:00 PM   #16
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And small bottles of alcohol
Small? C'mon, you can clean wounds with it, light fires, drink it, etc. I was thinking more like a barrel.
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Old 05-23-2019, 08:02 PM   #17
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All my gold is wearable. Like around my neck, wrists, fingers, etc.
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Old 05-23-2019, 08:03 PM   #18
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For bullion, US Gold Eagles 1986 to current dates are the way to go, IMO. They are 22k and come in 1/10, 1/4, 1/2 and 1oz coins and don't typically carry any premium. Older gold coins have numismatic values so you'll pay a premium for them depending on dates, mint marks and grades. Super easy to buy and sell in coin stores or coin shows. Good rule of thumb is to pay no more than ~$10 over spot for a 1oz coin.

Some people also buy Canadian Gold Maple Leafs. (They are very pretty coins) They are easy to buy and sell here in the US too, "however" they are 24k gold and are very easy to scratch/damage and need to be handled very carefully.
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Old 05-23-2019, 08:14 PM   #19
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Yeah me thinks I'll get one of those 20 piece 1 oz gold eagle mint packs and toss it in the safe.
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Old 05-23-2019, 08:25 PM   #20
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Yeah me thinks I'll get one of those 20 piece 1 oz gold eagle mint packs and toss it in the safe.
You should be able to get a roll of 20 for under 26k at today's price.... Good news is, it won't take up much room in your safe.
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