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-   -   Anyone own Gold/Sliver Bullion Bars? (https://www.early-retirement.org/forums/f28/anyone-own-gold-sliver-bullion-bars-31320.html)

JohnDoe 11-14-2007 07:07 AM

Anyone own Gold/Sliver Bullion Bars?
 
Where did you buy from? How can you tell you have pure gold and silver? Did you pay a prem over spot? What size bars do you own? Do you keep it in a Safty Dep box?

I have a friend who is a "coin" dealer trying to pedal this stuff.

JD

fluffy 11-14-2007 01:29 PM

I would imagine your local gold/silver exchange business would be a good place. I sold a gold bullion coin (a South African Krugerrand that we happened to have) recently and got almost 99% of the spot price. I would imagine you'd pay similarly low premium when buying. And I was just selling a single coin -- not any kind of volume even. Anyway I'd start by shopping around with local businesses like that.

av8r 11-14-2007 09:59 PM

I started buying gold coins a couple of years ago when I started having a bad feeling about the dollar. I had a bunch of cash that I didn't want to keep as cash, but didn't want to invest it conventionally either. I started buying gold coins at the local coin and stamp dealer. He gave me prices just above spot prices. Of course in retrospect, I'm really glad I did it.

I do keep the coins in a safety deposit box. You can buy bars if you want, but coins are a little more user friendly. American Eagles are not pure gold, but they make up for it by being slightly more than 1 ounce coins. Krugerands are the same. Canadian Maple leaf gold coins are 99.9% pure and are of course exactly 1 ounce.

Helena 11-14-2007 10:05 PM

I would buy coins over bullion... but not at the top of the PM bubble !

pedorrero 11-14-2007 10:24 PM

Agreed so far....for the small investor, coins always recommended over bars or other forms. You can also buy by mail (registered) from reputable dealers. I've done this several times with no problems (in the low $400s -- looks good in hindsight!) . Some firms have been around a long time so they should be reputable. Selling coins probably could be done the same way, but I've always sold at a local dealer. You can also buy (indirectly) with a couple of gold ETFs nowadays.

JohnDoe 11-15-2007 07:04 AM

Thanks for the info.

So a dealer who sold you the coins would buy them back whenever you wanted to sell?

I doubt I would do it as an investment. It would be more for fun. There is no sense buying now at the top. I'll just keep an eye on the PM prices for a while.

JD

ziggy29 11-15-2007 07:42 AM

I dabble in it from time to time. I wouldn't buy right now. I don't think gold is at a top (I think it was driven down artificially for many years, and recent events plus the dollar's decline have made it hard for central banks to keep it down), but even if it's in the intermediate stages of a raging bull run (as I believe) I think the rally is tired for now and needs some healthy consolidation.

I bought some gold early this year when gold was around $600 an ounce -- mostly four-coin U.S. and British gold proof sets which were purchased for an average of about $30 over spot per ounce. Still, I only have about 1% of my net worth in physical precious metals and about 2% in gold mining stocks and mutual funds. It's worked well as "insurance" against economic fears and a declining dollar over the last few years, but in those small quantities it's not going to make me rich.

martyb 11-15-2007 07:44 AM

A few year ago, when the spot price for silver was in the $4 range, I used to buy Silver American Eagles (1 oz, $1 US Mint coins) for about $1 over spot from a coin dealer in PA and resell them on Ebay for a pretty decent profit, frequently double my cost plus S/H. I bought them by the 20 coin tubes and then sold them one or two at the time in protective acrylic capsules, usually getting anywhere from $8 to $14 apiece from "collectors".;) I also bought a fair quantity of 20 coin tubes at about $120 per tube, put them in my safe deposit box until spot prices doubled, them sold them by the tube on Ebay at more than 2X what I paid for them. I bought and sold some commemorative silver coins as well, and did pretty good there too. The American Eagles are generally considered bullion, although they are a legal tender U.S. coin, however there is also a pretty good market for the coins by collectors. They usually sell for a good bit more than the spot price. Certain years had lower production numbers and really bring much higher prices. 1996, for example.

JohnDoe 11-15-2007 10:36 AM

So even though I'm buying coins, that may or may not be legal tender, they are always valued by the weight * spot, plus any collective value?

audreyh1 11-15-2007 11:15 AM

The nice thing about the gold and silver coins - is that they're really pretty!

LOL!

Audrey

cute fuzzy bunny 11-15-2007 11:22 AM

1 Attachment(s)
This would seem to indicate that the current inflation adjusted price is pretty dang high vs historic levels and trends. That it might head up from here is very speculative.

Seems to me that there is one big spike when we had the big inflation hump in the 70's...probably because everyone went with the "buy gold to hedge inflation!" line of thinking. Then around 2000 when asset allocation really came into vogue and everyone wanted someplace else to go in a sliding equity environment.

Other than that it looks like a good place to slowly lose money to inflation, with periodic unexpected hikes due to non financial situations...every 30-40 years or so.

Seems a bit of a long holding time.

FinanceGeek 11-18-2007 10:45 AM

Why not buy GLD? Far less worries about spreads/commissions/postage/sales tax/theft, etc.

Course, I'd be looking on the short side 'bout now if I were a speculator.

FIREd 11-18-2007 03:13 PM

I inherited a few gold coins and bought a few more in 2003-2004 from an reputable online coin dealer. I bought specifically 1 oz Maple leaves (99.999% pure gold). I paid spot + 1-2% if I remember well. I inherited Gold Swiss Francs, but those have a relatively low purity. I also bought some silver in the same period but I don't buy silver coins. I prefer to invest in good quality sterling objects (trays, bowls, flatware...) that I can actually use (as opposed to coins that just sit in a box). In my neck of the wood, antique stores used to sell many sterling silver artifacts below spot but they caught up since last year and jacked up their prices dramatically. I used to roam antique stores with a small electronic scale and a calculator to calculate the actual value of the silver content and when I found an object I liked for a good price I would buy it. I try a keep about 1.5% of my networth invested in precious metals. In the past two years though the price of precious metal increased so much that I did not have to buy any new gold/silver piece to keep up with my increasing networth.

martyb 11-18-2007 04:23 PM

Quote:

Originally Posted by JohnDoe (Post 578731)
So even though I'm buying coins, that may or may not be legal tender, they are always valued by the weight * spot, plus any collective value?

Yes, and no, and yes.......Depends! You can buy gold and silver coins for purely the bullion/per ounce value. Basically what they would be worth if melted down and sold as a lump of metal on the spot market. You could buy a $1.00 face value Silver American Eagle coin that is newly minted or from a year's minting that has no special significance because a high number of that coin were minted, and you would still pay not the $1.00 face value, but a little over the "spot" price. I don't even know the current spot prices, but let's say silver is currently $14 per oz. You're gonna pay about 1% or so over the $14 per coin. You will get somewhat of a break buying in large quantities. If you're buying coins that were minted in a year when production was fairly low, then demand for that particular year's minting for that coin is higher, driving the price for that coin higher. I remember when I could buy a 2001 Silver American Eagle coin $1 coin for about $5 to $6 but the exact same $1 coin with 1996 stamped on it was going for 5 to 6 times that amount. There are several different values and markets for coins. The face value, the numismatic value, and the bullion value. Face value is obvious, it's stamped on the coin. This value goes out the window when somebody decides for whatever reason that coin is desireable as a collectible. There are different levels of "collectibles" as well. Someone who is into collecting truly rare and highly valuable coins, as in hundreds to thousands of dollars type coins, would laugh at the lesser collectors who are grabbing up and paying inflated prices for modern collectibles like the Silver and Gold Eagles, the American Buffalo coins, etc. But....there's clearly a market for the modern stuff, and the only slightly older stuff too. People pay higher and higher prices every day for these coins on ebay and other auction sites. Many on-line coin dealers trade in this type of coin everyday and it's probably a good bit of their bread & butter I would think. People every single day pay more than an item is really "worth" simply because they want it. What you don't want to do is sell a gold or silver coin strictly for the bullion or spot price without knowing whether it might have a higher market value as a collectible. I've seen $20 face value coins sell for thousands of dollars, even though they would have been worth maybe $300 in melted down form. You gotta know what you're selling or it'll cost ya! I didn't even mention how the value is further escalated when a person pays to have a coin rated by the PCGS and gets a high rating. That's when the price shoots even higher! There's a lot of money to be made buying and selling coins, and a lot of it is related to the fact that people are more than willing to pay more than they should. I guess emotions are part of it, the excitement of a really cool coin they want. There's also the aspect of newbies in the collecting world who just are too easily parted from their money.

martyb 11-18-2007 04:32 PM

Here's something interesting. Go to The United States Mint Home and check out the prices for some of the gold & silver, and platinum American Eagle Proofs and Uncirculated coins as well as some of the commemoratives.etc. Those are not the prices you would pay if buying the coins in bulk from a dealer for bullion. Note that the Eagles are $1 denomination coins! So if you walked into the 7-11 with a Gold Eagle Proof $1 you just paid $789.95 for, all you'd get for it would be a Coke and a pack of crackers! Unless the guy behind the counter had a clue! If I were the clerk, I'd probably let you have a 6 pack of Cokes and maybe a moon pie as well!

Gworker 11-19-2007 12:16 PM

I inherited a coin collection and now I'm kind of in to saving silver coins and am buying a few silver eagles every now and then. I may try to buy some of the smaller gold coins just to have. Not a big investment just to have a few and maybe in few years they might be worth more.

Of course then I think: I inherited one collection who will get mine if I die? I don't have kids, what's the point of collecting more stuff? But I buy a few coins a month, hold on to them, and see what happens. Plus it keeps me busy organizing them and researching the older ones on the internet and in books.

martyb 11-19-2007 03:26 PM

I would appreciate it if you would leave them to me!

Milton 11-19-2007 04:23 PM

Quote:

Originally Posted by JohnDoe (Post 578658)
I doubt I would do it as an investment. It would be more for fun.

Unless you enjoy accumulating piles of coins like Scrooge McDuck, I don't really see the fun. :confused:

mathjak107 11-19-2007 06:27 PM

Quote:

Originally Posted by JohnDoe (Post 578273)
Where did you buy from? How can you tell you have pure gold and silver? Did you pay a prem over spot? What size bars do you own? Do you keep it in a Safty Dep box?

I have a friend who is a "coin" dealer trying to pedal this stuff.

JD

i once bought them from fidelity investments and took delivery. bad move. i had to pay sales tax in my state for taking possession. i wouldnt do it anymore. gld works just fine

mathjak107 11-19-2007 06:32 PM

the thing about gold is to make it work you have to treat it like any other investment. you have to adjust it every so ofton buying more when it drops and selling some off when it rises . even if you bought it at the high in the 70's thru the years by adjusting your portfolio back to the proper percentages you would have been adding more and more cheaper priced gold to your mix. even now you probley would have made alot of money had you bought it back at that orig 850 price. examples are always given comparing the price now to the price in the 70's but not rebalancing your portfolio all these decades would be stupid for any asset class in your mix. the truth is you would have done just fine holding gold had you rebalanced every year.

cute fuzzy bunny 11-19-2007 07:01 PM

That strategy would have required an awful lot of patience from 1980-2001.

Might also have been a bit troubling from the mid 30's to the late 70's, when gold lost half its value against inflation.

Interesting indicator. My FIL, who lives in the heart of the original Gold Rush Country, bought a few gold coins a couple of years ago. On seeing that the price of gold was up a bit from where he bought, he went back to the dealer he bought the coins from. Wouldnt buy them back. At any price. Went to several other coin and precious metals storefronts in town (a common item around here) and was also turned away.

mathjak107 11-20-2007 02:55 AM

well i wouldnt go back to the 20's and 30's as until the 70's the price was fixed by the gov. but running forward from the 70's like all long term investments no doubt it would have taken patience.

but a mix like harry browns permanet portfolio ,25% in each catagory, long term bonds, stocks, gold and cash wouldnt have done to bad rebalanced yearly. it was just a longer wait than most of us want.

cute fuzzy bunny 11-20-2007 10:06 AM

Such a mix has produced a long term net return of about 1% over treasuries with far more volatility. After inflation, you'd see about a 2.5% SWR.

I guess thats better than "done bad", but its a good far cry from "good".

mathjak107 11-20-2007 06:14 PM

if i remember from the last time i looked from 1982 to august 2006 the return was about 6.5% and with the run up in gold and stocks since then i bet its closer to 7%. i dont think treasuries returned 6%

cute fuzzy bunny 11-20-2007 06:32 PM

Check the after tax numbers.

Great portfolio idea for the 1800's or maybe even the 1950's. Not so sure its that great now. In fact, prior to the gold run-up of the last few years, it sucked for decades.

mathjak107 11-20-2007 06:43 PM

i have to agree, that i think it lagged up until recently

cute fuzzy bunny 11-20-2007 09:44 PM

Then now must be the time to buy, while the irons hot, eh?

JohnDoe 11-22-2007 06:35 PM

You don't have to pay any taxes if you sell your metals for a gain, correct?

Martha 11-22-2007 07:50 PM

Sorry, the tax is pretty high, at the collectibles' rate of a maximum 28% rather than the 15% capital gains rates maximum, for assets held more than a year. If less than a year it is taxed at ordinary income rates.

ash 11-23-2007 10:20 AM

Quote:

Originally Posted by cute fuzzy bunny (Post 580477)
Check the after tax numbers.

Taxes on gold appreciation!? :)

One of the benefits of actually holding gold itself is the privacy if offers! One has the choice to pay taxes on it or not.

mathjak107 11-23-2007 10:45 AM

if you sell thru any reputible place like bank or brokerage its reported when you trade it in. if you dont and take it somewhere priviate good luck as you will be offered way way below spot for sure. either way it will cost you dearly

ash 11-23-2007 11:03 AM

Quote:

Originally Posted by mathjak107 (Post 581109)
if you sell thru any reputible place like bank or brokerage its reported when you trade it in. if you dont and take it somewhere priviate good luck as you will be offered way way below spot for sure. either way it will cost you dearly

There are several reputable coin dealers where I live and none of them report anything below $10K annually in transactions. Margin from spot price from all of them has been excellent in my experience.

cute fuzzy bunny 11-23-2007 11:12 AM

Hmm, I guess I could sell my equities and not report those on my schedule D. That'd be as effective and just as legal.

But then again we were talking about the "permanent portfolio" allocation scheme and presumably the fund that follows such a scheme, and also presumably legally reporting our taxes so we dont get a free early retirement courtesy of the feds.

Rebalancing such a construction and taking occasional withdrawals for living expenses produces a lot of (legally) taxable events.

mathjak107 11-23-2007 12:05 PM

i had bought years ago from fidelity and benham capital. fidelity though was a mistake as i took delivery and had to pay sales tax. i didnt feel like shlepping to fidelity to sell them so i sold them thru deak international.....

what a 2nd mistake that was. i got way lower than spot and for the record they did report it

ash 11-23-2007 02:13 PM

Quote:

Originally Posted by cute fuzzy bunny (Post 581119)
Hmm, I guess I could sell my equities and not report those on my schedule D. That'd be as effective and just as legal.

Except isn't there a paper trail there? And possibly reporting to the IRS (I really don't know)?

There are other benefits to privacy, besides income tax issues.

cute fuzzy bunny 11-23-2007 02:18 PM

Well congratulations. This is the first time I think anyone on the forum has ever espoused the potential for tax evasion as a benefit of an asset class...

ash 11-23-2007 02:23 PM

Quote:

Originally Posted by cute fuzzy bunny (Post 581175)
Well congratulations. This is the first time I think anyone on the forum has ever espoused the potential for tax evasion as a benefit of an asset class...

Actually, I did no such thing. I merely said that privacy offered the investor choices.

For example. "What if" the government suddenly decided to confiscate gold again? Privacy gives you choices. "What if" the government decided to increase the capital gains rate to 90%? Privacy gives you choices.

Yes, those are highly unlikely scenarios. BUT, privacy gives you flexibility and freedom if those were ever to happen.

You can keep things private and still pay every cent the government says you owe in taxes.

youbet 11-23-2007 02:45 PM

Quote:

Originally Posted by ash (Post 581176)
Actually, I did no such thing.

Yes you did! :2funny:

But, no big deal.

cute fuzzy bunny 11-23-2007 04:07 PM

Its okay Youbet, I'm ready to be tagged back in... ;)

Quote:

Originally Posted by ash (Post 581176)
Actually, I did no such thing.

I'm a little confused then. You claimed that gold isnt tax inefficient because you can private sale it without the sale being recorded, yet you arent saying that?

What the heck ARE you saying?

Or did you miss Marthas post that when legally reported as a sale, that you'd pay about twice as much in taxes on gains in gold than pretty much any other asset class?

I guess I'll hang on to my good performing, tax efficient, non-private asset classes...

ash 11-23-2007 04:11 PM

Sorry if I've been confusing. I certainly don't want to advocate that anyone break the law, because there are consequences for doing so, especially for tax evasion.

With that said, IF someone is going to invest in gold, why not purchase gold privately and anonymously, without any paper trail? What you choose to do with the gold in the future is a bridge that can be crossed then, but owning it privately breaks no laws and gives you future flexibility.

cute fuzzy bunny 11-23-2007 04:27 PM

Aside from being illiquid, inconvenient, limited to local market pricing and the potential for loss or theft, I guess it'd be a great idea.

ash 11-23-2007 04:34 PM

Quote:

Originally Posted by cute fuzzy bunny (Post 581194)
Aside from being illiquid, inconvenient, limited to local market pricing and the potential for loss or theft, I guess it'd be a great idea.

Whether one should invest in gold is another question, and a good one, about which you raise good points.

I was only offering an opinion that if one is going to invest in gold, why not do so anonymously and privately.

cute fuzzy bunny 11-23-2007 04:51 PM

My comments had to do with buying, holding and selling physical gold, not anything having to do with whether to invest in it or not.

ash 11-23-2007 05:04 PM

Quote:

Originally Posted by cute fuzzy bunny (Post 581203)
My comments had to do with buying, holding and selling physical gold, not anything having to do with whether to invest in it or not.

Oh, I see, I misunderstood. Okay, my thoughts:

"illiquid, inconvenient" - While gold is highly liquid in one sense, true, you can't trade actual gold privately from your computer in your PJs.

"limited to local market pricing" - Perhaps. But If you're reasonably close to a major metropolitan center, I'd wager that there's enough competition to get a fair price.

"the potential for loss or theft" - Anything can be stolen. What's more safe, having gold locked away in a safety deposit box, or being the registered owner of some gold that someone else is holding for you? I don't know the answer to that question, but it's a valid question.

cute fuzzy bunny 11-23-2007 05:08 PM

Or, as in the case of my FIL as mentioned above (who lives in the heart of Gold Country), he cant sell it to anyone at all at any reasonable price. The dealers dont wish to buy any more.

Thats pretty darn illiquid and inconvenient.

Also tells me that people who are in the business are expecting a price drop.

ash 11-23-2007 05:22 PM

Quote:

Originally Posted by cute fuzzy bunny (Post 581211)
Or, as in the case of my FIL as mentioned above (who lives in the heart of Gold Country), he cant sell it to anyone at all at any reasonable price.

Well, how could you expect to sell gold in gold country!? You can't swing a dead cat there without hitting a fifty pound nugget of gold.

cute fuzzy bunny 11-23-2007 06:12 PM

Yep, you can actually pan for the stuff after a heavy rain and with a good days work might come up with a fleck or two. We had a huge mudslide after some early and heavy rains a couple of years back and the local stores were selling out of the pans and kits. A lot of guys came up with some nice chunks.

Point was, there must be a couple of dozen coin and metal shops downtown from my FIL's house. It sure isnt NYC or LA, but these guys do a serious business just in tourist transactions. Its a pretty good volume business and theres plenty of competition. He'd like to sell the coins right now because he feels the price is good and he could use the cash to do some work on his RV. But he cant.

ash 11-23-2007 06:35 PM

Quote:

Originally Posted by cute fuzzy bunny (Post 581233)
Point was, there must be a couple of dozen coin and metal shops downtown from my FIL's house. It sure isnt NYC or LA, but these guys do a serious business just in tourist transactions. Its a pretty good volume business and theres plenty of competition. He'd like to sell the coins right now because he feels the price is good and he could use the cash to do some work on his RV. But he cant.

That's surprising. When you say he can't sell it, you mean they're offering too low of a price? Kitco is buying at $819 right now, which is within a few bucks of the spot price.

When you say downtown, are you talking about Sac? Have you tried Marconi Coin in Carmichael, that's not too far from gold country (30-45 minutes?).

cute fuzzy bunny 11-23-2007 06:39 PM

Yep, around that area. Sac to Grass Valley.

He went into some local shops and called a bunch more. They flat out told him they have all the gold they want to have in inventory at this time, and dont expect to buy anymore any time soon. I'm sure if he was willing to drop his pants they might take it.

cashflo2u2 11-28-2007 08:11 PM

I have a friend who owns his own printing business. One of the applications generates silver as a by product. He reclaims it somehow and has these large heavy silver bars in his office. They have been accumulating and kicking around his office for years and now they are worth quite a bit of money. He wants to keep them though, in case of emergency. Deep down I think he has bunker type survivalist mentality at heart.

Khan 11-28-2007 08:52 PM

Quote:

Originally Posted by cashflo2u2 (Post 582683)
I have a friend who owns his own printing business. One of the applications generates silver as a by product. He reclaims it somehow and has these large heavy silver bars in his office. They have been accumulating and kicking around his office for years and now they are worth quite a bit of money. He wants to keep them though, in case of emergency. Deep down I think he has bunker type survivalist mentality at heart.

A K and C survivalist?
(Kalashnikov and concertina wire)

Jeb-NY 11-29-2007 10:54 AM

Quote:

Originally Posted by cashflo2u2 (Post 582683)
I have a friend who owns his own printing business. One of the applications generates silver as a by product. He reclaims it somehow and has these large heavy silver bars in his office. They have been accumulating and kicking around his office for years and now they are worth quite a bit of money. He wants to keep them though, in case of emergency. Deep down I think he has bunker type survivalist mentality at heart.

Interesting turn in the reason to keep gold or silver. Just a few days ago a friend asked what I thought of the idea of keeping a bar of gold or silver in the safe for a major upheaval situation. He thought he could shave off a little at a time to buy necessities. I told him I didn't think it would work to well. I suggested a small bag of diamonds of different sizes you only expose what you are willing to trade. With more thought a well stocked gun cabinet would probably be more important.

:bat: ;D

Jeb

FinanceDude 11-29-2007 11:18 AM

Quote:

Originally Posted by Jeb-NY (Post 582846)
well. I suggested a small bag of diamonds of different sizes you only expose what you are willing to trade. With more thought a well stocked gun cabinet would probably be more important.

If you have guns, you can get all the gold, silver, or diamonds you need..........;)

calmloki 11-29-2007 10:31 PM

Quote:

Originally Posted by FinanceDude (Post 582854)
If you have guns, you can get all the gold, silver, or diamonds you need..........;)

Diversify: Lawyers, guns, and money.

Martha 11-30-2007 11:53 AM

Quote:

Originally Posted by calmloki (Post 583108)
Diversify: Lawyers, guns, and money.

Well I am fully diversified. Though overweight in lawyer. :p

cute fuzzy bunny 11-30-2007 11:59 AM

Not gonna touch it.

ziggy29 11-30-2007 12:01 PM

Gold is "financial apocalypse insurance". I think it's reasonable to have 3-5% of ones assets in it (for insurance and "diversification" purposes against the dollar) but more than that is probably a loser unless the worst case geopolitical and economic fears come to pass.

Martha 11-30-2007 12:15 PM

Quote:

Originally Posted by cute fuzzy bunny (Post 583220)
Not gonna touch it.


Please don't. I'd have to slap you.

cute fuzzy bunny 11-30-2007 12:25 PM

;D

ziggy29 11-30-2007 01:59 PM

Quote:

Originally Posted by Martha (Post 583238)
Please don't. I'd have to slap you.

I thought you were going to try to *discourage* him here...

TromboneAl 11-30-2007 03:19 PM

Resisting... resisting...

cute fuzzy bunny 11-30-2007 05:48 PM

Quote:

Originally Posted by ziggy29 (Post 583299)
I thought you were going to try to *discourage* him here...

Well THAT was effective! ;)


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