Buying Gold

A friend of mine deals in gold bullion and coin, so I'll share some (incomplete) observations.
He's told me that BV gold coins are a lot easier to buy/sell because their details serve as authentication.
Bars and bullion coin are starting to be faked with a gold outer layer and tungsten core (same exact SG)
That's something to be very careful about--where you buy your bullion bars/coins.

I'm told that larger bullion bars can be harder to sell quickly. The other day, he handed me a 100oz AU bar--an amazing object to hold.

Okay, okay... I gotta get my 2 cents in as it were.

The answer is simple... buy the cheapest, recognized and marked stuff you can get. If you are an investor, the form of gold should not have any relevance.

If you are buying over time, say a monthly alotment... you should end up with an assortment of bars, rounds, coins, and possibly jewelry.

Krugerrands typically have the least mark up over bullion value as far as coinage goes. You may also find deals on gold coins like French roosters that are plentiful and can be had near spot by a shrewd eBayer... or find damaged gold coins at same.

The point is... that as an investment, you can still have a varied and interesting collection without spending too much over bullion value.

If you are considering a one shot large purchase, shop around for the best prices for your volume discount and always consider shipping costs as part of the costs. If you decide on, say a roll of Kruggerands, they may not pose much interest as a collection, but as an investment cost should be the only consideration.

The attraction of physical gold bought over a long term gives you the advantage of dollar cost averaging. Whereas a one shot purchase could be a real let down if the spot price plunges the next day.

As for ETF gold funds... If you are the day trading type these are a fanatastic investment opportunity for PM heads... but the gloom and doomers prefer physical holdings, not kept in a bank, because when a financial institution closes, it ALL closes.

I'm not a gloom and doomer, and I sorta fell into this collecting thing... seldom do I pay more than 5% above spot for anything. I can go weeks to a month or so without finding a good deal and then BAM!... I've found many deals (often just poorly categorized on ebay) below spot, but never brag... I just move on.

Do get yourself a decent book if getting into coinage, and if in doubt, ask questions... especially on this form.

The old saying... "Ask 3 professionals and get 4 opinions" still holds up as you can see, but the bottom line is cost... the absolute bottom line is your cost.

Brian 1315, by using words like "seems" and "should" I'm guessing that you have never bought and sold precious metals before so your naivete is refreshing.

The only way you can go wrong buying gold coins is if the movement in the price of gold isn't in your favor. The idea is to buy low and sell high obviously, but if it was THAT easy, everyone would do it and nobody would ever lose their shirt.

If you buy at $1000 and in 20 years when you are ready to sell to buy a home or finance college for the kids, if gold is back to $1,000.

You're investment wasn't really an investment was it?

If you buy at $1000 and in 5 years gold hits $2500 like some predict, if you sell, take your profit and pay the tax man his capital gains ...that's an investment.

If gold is in a slump when it comes time to send the kid off to college .. gold is $750 an ounce. Do you sell and take a loss or hold on hoping for better days ahead.

Gold can be a good investment and a terrible investment all at the same time. Not all gold coins are created equal.

I forgot something important !!

Wall Street tends to play a game called, pump and dump. They will spend millions buying stock inflating it value and creating a media frenzy. When it hits a desired price, they dump (shorting) causing new lows and making them a ton of money.

That's a nice story but irrelevant to your initial question.

Depending on what you purchased, most likely pre 1933 gold. There is inherent numismatic value. My saint collection are also worth more now than 10 years ago.

When people post about buying gold for investments purposes and the choice between coins and bars, the coins they refer to are bullion coins not numismatic coins. That's comparing apples and oranges.

Coins like Kruggerands, maple leafs and American eagles are "investment coins". To buy gold as an investment (i.e. as close to spot at possible) bars will give you a better per dollar value.

If you want gold as a hedge against gubmint financial mismangement, why would you buy something they can control?

Therein lies the crux of the matter. Why indeed? Perhaps because there is a difference between government mismanagement and government theft. It is quite possible to have one without the other... or even both at the same time!

I am thinking that we will continue to see government financial incompetence for some time to come now. Whether or not that results in confiscation of privately held PM investments, whether paper or physical, is a guess at best.

Fortunately, this is not an either / or choice. It is quite possible and perhaps even beneficial as well, to have both physical and paper PM investments. I do. Whether or not that will work out satisfactorily in the end... who knows? But there are advantages to this approach that can't be had via only choosing one of them.