Physical Gold or Silver Thoughts

[copyright1997reloaded]

Whenever I see an ad on TV for owning gold, I just shake my head.

They always seem to be directed at the elderly/prepper types.

Hey, who you talkin about?

But also being the ER.org type, I also look for bargains and only think in terms of price relative to spot.

One place to get an idea of current pricing is: https://findbullionprices.com/gold/closest-to-spot.php?category=gold

Also (for anyone looking at gold/silver), I avoid eBay except for eBay listings from well-known/reliable dealers.

 

[nobody]

Bought a gold bar when it was down, its just cool to own. It lives in my gun safe, doesn't take up much space.

 

[ivinsfan]

Whenever I see an ad on TV for owning gold, I just shake my head.

They always seem to be directed at the elderly/prepper types.

What do you think of Crypto

 

[mrfeh]

What do you think of Crypto

Why do you ask?

I don't see how crypto is remotely similar to owning physical gold, if that's what you're implying.

 

[copyright1997reloaded]

They are the best looking gold coins minted in the world, IMO. The problem is, they are 24k gold and can be scratched/marred very easily. Most other world gold coins are 22k and much more durable. Of course not many people are going to be handling them much anyway, but still. Just handle them with extra care.

For some reason, I keep being drawn to the 10oz RCM Silver "Magnificent Maple Leaf" coin. I haven't bought any, but they sure look pretty in the videos:

One thing making me hesitant (besides the premiums) is that people have complained about RCM silver coins and "milk spots".

 

[MichaelB]

Just a reminder about forum policy regarding crypto https://www.early-retirement.org/forums/f44/cryptocurrency-discussions-on-er-forum-116586.html

 

[erkevin]

For some reason, I keep being drawn to the 10oz RCM Silver "Magnificent Maple Leaf" coin. I haven't bought any, but they sure look pretty in the videos:

One thing making me hesitant (besides the premiums) is that people have complained about RCM silver coins and "milk spots".

RCM makes great coins and has addressed their milk spot issues: https://www.coinworld.com/news/precious-metals/royal-canadian-mint-develops-milk-spot-fix.html

 

[Koolau]

RCM makes great coins and has addressed their milk spot issues: https://www.coinworld.com/news/precious-metals/royal-canadian-mint-develops-milk-spot-fix.html

My opinion is that holding silver is best done with "junk" silver - (primarily) pre-1965 US coins. It's not worth counterfeiting. EVERYONE knows it when they see it, it's in small enough amounts of silver to be used for buying small stuff if PMs ever become a significant medium of exchange, the premium over silver price isn't ridiculous.

I love the look of the newly minted "collector" coins, but when it comes to silver, I want the cost to be as low as possible. YMMV

 

[HawkOwl]

My opinion is that holding silver is best done with "junk" silver - (primarily) pre-1965 US coins. It's not worth counterfeiting. EVERYONE knows it when they see it, it's in small enough amounts of silver to be used for buying small stuff if PMs ever become a significant medium of exchange, the premium over silver price isn't ridiculous.

I love the look of the newly minted "collector" coins, but when it comes to silver, I want the cost to be as low as possible. YMMV

Not to mention that counterfeiting U.S. legal tender is prosecuted in the U.S., while fake foreign or corporate metal discs are a lower law enforcement priority.

 

[copyright1997reloaded]

My opinion is that holding silver is best done with "junk" silver - (primarily) pre-1965 US coins. It's not worth counterfeiting. EVERYONE knows it when they see it, it's in small enough amounts of silver to be used for buying small stuff if PMs ever become a significant medium of exchange, the premium over silver price isn't ridiculous.

I love the look of the newly minted "collector" coins, but when it comes to silver, I want the cost to be as low as possible. YMMV

Unfortunately, Junk Silver no longer has low premiums. There is a huge difference between now and ten or so years ago. For example, here is some for sale: https://www.moneymetals.com/pre-1965-junk-silver-coins-dimes-or-quarters/35?keycode=ADWORDS-EcommSrchSlvr&gc_id=16221430297

The premium on it (as of when I posted) is $12-$13 over spot. Ten or so years ago I remember junk being close to spot. It has also gotten scarce in terms of availability.

 

[Koolau]

Unfortunately, Junk Silver no longer has low premiums. There is a huge difference between now and ten or so years ago. For example, here is some for sale: https://www.moneymetals.com/pre-1965-junk-silver-coins-dimes-or-quarters/35?keycode=ADWORDS-EcommSrchSlvr&gc_id=16221430297

The premium on it (as of when I posted) is $12-$13 over spot. Ten or so years ago I remember junk being close to spot. It has also gotten scarce in terms of availability.

Yeah, it appears some of the companies don't even have any in stock. That will definitely raise the price. Next best is likely the "cheap" rounds as long as they're from a know company.

Heh, heh, a significant portion of my junk silver was collected from change by my dad who eventually left it to me. It's true, I would have done better by investing in the stock market. Having said that, silver (and gold) buffered my NW a couple of times over the years. YMMV

 

[ncbill]

Unfortunately, Junk Silver no longer has low premiums. There is a huge difference between now and ten or so years ago. For example, here is some for sale: https://www.moneymetals.com/pre-1965-junk-silver-coins-dimes-or-quarters/35?keycode=ADWORDS-EcommSrchSlvr&gc_id=16221430297

The premium on it (as of when I posted) is $12-$13 over spot. Ten or so years ago I remember junk being close to spot. It has also gotten scarce in terms of availability.

Plus "junk silver" that I've seen recently is so worn most coins available should be considered culls.

You'd pay an additional premium for any in good shape.

High enough that I'd just buy silver rounds instead.

 

[Koolau]

Plus "junk silver" that I've seen recently is so worn most coins available should be considered culls.

You'd pay an additional premium for any in good shape.

High enough that I'd just buy silver rounds instead.

Last time I bought junk silver, there was no provision for quality. You would get many more '64 AAU than '26 just-discernible-as-coins coins in the mix. At the time, junk was cheaper than the nice shiny rounds.

Of course, that was before the internet and it was before silver was actually a scarce commodity. I think "price resistance" is now controlling. If "scarcity" were controlling, prices of silver would be higher IMHO. (Sorry if I sound like a commercial - I don't mean to.) But the big PM houses are running out of all kinds of stuff (gold and silver items.) It stands to reason that if "normal" supply and demand was controlling, there would always be some of everything. at some price.

Considering that I've just told you more than I know, YMMV.

 

[Starsky]

I bought about $120K of physical Gold and Silver bullion, junk silver and semi-numismatic coins in 2016-17, both as part of a diversified portfolio but also as part of my SHTF strategy. Other investors I respected held 5-10% of their portfolios in PM, so it seemed safe despite all the additional hype.

Since them, I've sold some of the silver and a small part of the gold but still have around the same amount as when I started value-wise. I'm glad to see the premiums going up; I wish the prices would go up some more too. I don't plan on buying any more, and will just save it for emergencies. Now is not the time to divest.

I wouldn't recommend PM as an investment - more as a hedge; although over the long run, it will always hold its value. The bid/ask transaction costs take a chunk out of the value, but PM is surprisingly fungible. If I had invested the money somewhere else, I'd probably have more digits, but I like the comfort of having it close at hand.

This is a long-term hedge. After a year or two, I regretted buying PM - I was losing money selling. After 6 or 7 years, I don't regret it, but I would do it differently next time. I went 60/40 silver/gold, but if I had to do it again, I'd go 20/80 silver/gold and only buy bullion U.S. and Canadian coins and a bit of junk silver. There's definitely a learning curve, and a lot of shiny products to choose from. Unless you are a collector, keeping it simple and straightforward is my best advice.

 

[ownyourfuture]

My opinion is that holding silver is best done with "junk" silver - (primarily) pre-1965 US coins. It's not worth counterfeiting. EVERYONE knows it when they see it, it's in small enough amounts of silver to be used for buying small stuff if PMs ever become a significant medium of exchange, the premium over silver price isn't ridiculous.

I love the look of the newly minted "collector" coins, but when it comes to silver, I want the cost to be as low as possible. YMMV

Agreed. I went on a 50 cent piece buying spree on eBay in 2017.
2400 coins. 92% 1964 Kennedy's, 8% Franklin's
Very few, if any of the Kennedy halves are mint, but very few, if any show wear. I think most people saved them, once they found out that the silver content would drop to 40% beginning in 1965.
I have to admit that those 10 oz "Magnificent Maple Leaf" coins are a thing of beauty.

 

[Koolau]

I bought about $120K of physical Gold and Silver bullion, junk silver and semi-numismatic coins in 2016-17, both as part of a diversified portfolio but also as part of my SHTF strategy. Other investors I respected held 5-10% of their portfolios in PM, so it seemed safe despite all the additional hype.

Since them, I've sold some of the silver and a small part of the gold but still have around the same amount as when I started value-wise. I'm glad to see the premiums going up; I wish the prices would go up some more too. I don't plan on buying any more, and will just save it for emergencies. Now is not the time to divest.

I wouldn't recommend PM as an investment - more as a hedge; although over the long run, it will always hold its value. The bid/ask transaction costs take a chunk out of the value, but PM is surprisingly fungible. If I had invested the money somewhere else, I'd probably have more digits, but I like the comfort of having it close at hand.

This is a long-term hedge. After a year or two, I regretted buying PM - I was losing money selling. After 6 or 7 years, I don't regret it, but I would do it differently next time. I went 60/40 silver/gold, but if I had to do it again, I'd go 20/80 silver/gold and only buy bullion U.S. and Canadian coins and a bit of junk silver. There's definitely a learning curve, and a lot of shiny products to choose from. Unless you are a collector, keeping it simple and straightforward is my best advice.

I'm basically in line with your philosophy. Gold/silver is an insurance policy that 3 to 5% of your port. can provide for you. Most non-PM folks assume SHTF strategy means Armageddon. It doesn't. And while they are correct that you can't eat gold, it's not like that in the great spectrum of all the stuff that can go wrong. Let's say we did have a default. If the world decides that dollars are worthless then they are worthless. I doubt that will happen in my life time. But NO one thinks gold is worthless and never will. There are 1000 other scenarios where PMs would be nice to have. Much of central Europe found that out during the 1940s. Many people saved their families by having some gold. Again, I'd like to think the madness of that time can't happen again, but nothing in human nature has changed since then. We've seen that all the laws in the world do not change human nature. If enough people decide they will no longer follow laws, things can change quickly. If anyone doesn't believe that, think of MJ.

It also appears that you bought during a lull in price rise. Nice. I bought at near lows back around 2000+. Did I make any money? Yes. Would I have been better off in S&P 500? Oh, yeah. Insurance is funny like that.

So: Each to his own and YMMV.

 

[Koolau]

Agreed. I went on a 50 cent piece buying spree on eBay in 2017.
2400 coins. 92% 1964 Kennedy's, 8% Franklin's
Very few, if any of the Kennedy halves are mint, but very few, if any show wear. I think most people saved them, once they found out that the silver content would drop to 40% beginning in 1965.
I have to admit that those 10 oz "Magnificent Maple Leaf" coins are a thing of beauty.

I searched for post '64 halves after the hub-bub had died down. For years, it was possible to find '65 through '69 half dollars in change which included buying a few hundred from a bank occasionally and going through them. A lot of people really didn't understand that 'hack.' Heh, heh, it was, truly, mining for silver. YMMV

 

[ownyourfuture]

I searched for post '64 halves after the hub-bub had died down. For years, it was possible to find '65 through '69 half dollars in change which included buying a few hundred from a bank occasionally and going through them.

I did the same thing with nickels many years ago
Found quite a few key date Jeffersons in really nice shape, & 10 or 15 buffalo nickels.

 

[luckydude]

I'm basically in line with your philosophy. Gold/silver is an insurance policy that 3 to 5% of your port. can provide for you. Most non-PM folks assume SHTF strategy means Armageddon. It doesn't. And while they are correct that you can't eat gold, it's not like that in the great spectrum of all the stuff that can go wrong. Let's say we did have a default. If the world decides that dollars are worthless then they are worthless. I doubt that will happen in my life time. But NO one thinks gold is worthless and never will. There are 1000 other scenarios where PMs would be nice to have. Much of central Europe found that out during the 1940s. Many people saved their families by having some gold. Again, I'd like to think the madness of that time can't happen again, but nothing in human nature has changed since then. We've seen that all the laws in the world do not change human nature. If enough people decide they will no longer follow laws, things can change quickly. If anyone doesn't believe that, think of MJ.

It also appears that you bought during a lull in price rise. Nice. I bought at near lows back around 2000+. Did I make any money? Yes. Would I have been better off in S&P 500? Oh, yeah. Insurance is funny like that.

So: Each to his own and YMMV.

+1 ^^^^^^^^^^^^^ this is the truth.

As an "investment" gold is terrible. It generates no income and doesn't even really keep up with inflation. But it is a great insurance policy for SHTF scenarios.

Another example of how gold was very useful in a SHTF scenario was back in the late 70s and early 80s, when many Vietnamese escaped Communism by buying passage on boats using gold. Gold is looked upon as a good way to hold wealth and also considered to be good luck in many Asian cultures, and it certainly proved useful in that particular scenario.

Obviously, there are many SHTF scenarios. Gold may prove useful in some scenarios and may be useless in others. There's no way to know until it happens. But I'd much rather have it at my disposal just in case it proves useful, just like an insurance policy. A few ounces of gold don't cost very much to keep around but may just be enough to make a huge difference.

 

[Koolau]

I did the same thing with nickels many years ago
Found quite a few key date Jeffersons in really nice shape, & 10 or 15 buffalo nickels.

Yeah, I've got jars of "War Nickels" obtained from change over the years. I'll find a couple a year now as they're very obvious. As you probably know, these nickels were made using 35% silver (but no actual nickel due to its shortage for war efforts.) They were made from '42 to '45. They typically have a very large mint mark which also makes them fairly obvious.

Using this handy-dandy calculator one can find the melt value of such war nickels.

U.S. Silver War Nickel Melt Value Calculator

Plugging in "1" war nickel gives $1.34 using today's silver price. I don't know what that translates to when trying to sell these to a recycler or one of the gold/silver coin sellers, but to a first approximation, $1.34 would be a place to start. The fact that you can still find them is kinda cool. More cool was looking for them 50+ years ago.

I also used to find a fair number of Canadian coins which used to have significant silver content. It was more of a hobby (okay, obsession) to look at change and see if there was a valuable coin in my change.