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What Is The Best Way To Invest In Bullion?

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Pillar of the Community

United States
2469 Posts
 Posted 07/10/2021  6:47 pm Show Profile   Bookmark this topic Add Oldfordman to your friends list Get a Link to this Message
Wondering what the best way to get into this is. Junk silver coin? Rounds? Bars? Asking because I see 1 oz rounds in groups of 20 go for $32 apeice and 20x the money. Wondering what the motive buying an ounce for $32-$37 while the spot price is $25-$27 at the time. Why the premium? Is there a way to get around this premium? The only time I don't see the huge premium is junk silver coin.
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United States
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 Posted 07/10/2021  7:05 pm  Show Profile   Bookmark this reply Add hfjacinto to your friends list Get a Link to this Reply
My dealer says if you want bullion then constitutional silver is the best way. The ase and others have a premium or in the case of rounds some states make you hold it for 30 days which reduces what they can offer, sell for.
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 Posted 07/10/2021  7:23 pm  Show Profile   Check GrapeCollects's eBay Listings Bookmark this reply Add GrapeCollects to your friends list Get a Link to this Reply
As stated, for MOST people 90% silver is best, but, if you've got money to spend, take a 1000oz contract on delivery.
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Canada
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 Posted 07/10/2021  7:38 pm  Show Profile   Check silverwolf's eBay Listings Bookmark this reply Add silverwolf to your friends list Get a Link to this Reply

Quote:
what the motive buying an ounce for $32-$37


That is the dealers profit.. Most dealers buy known silver for spot plus 1$ per ounce.

So they have to make some as well. And they also have to absorb the ups and downs. It is their cushion, understandable..

Cheapest silver will always be junk silver, buy it as close to spot as you can, but be prepared when you sell, that they buy it back for less than spot..again their cushion..
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United States
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 Posted 07/10/2021  10:27 pm  Show Profile   Bookmark this reply Add Greasy Fingers to your friends list Get a Link to this Reply
Back when silver was 17 to 19 dollars/oz, a LCS sold ASEs for 2 dollars over spot..Now covid/post covid 6 dollars over spot. I'm just waiting it out until he returns to 2 dollars over spot again.
I'm by no means a pro and will never claim to be...just my 2 cents
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 Posted 07/11/2021  09:06 am  Show Profile   Bookmark this reply Add fistfulladirt to your friends list Get a Link to this Reply
What is the best way to get into this? Dirtfishing and and/or coin roll hunting. In five years time during the last decade, I've dug/crh'd several thousand silver coins. All at face value, or free. Not the easiest way, but best IMO. As far as buying? I really like diversity, although I'm not buying at these prices. I little over a year ago, (March 2020), silver dipped to $12 spot. I loaded up.
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Edited by fistfulladirt
07/11/2021 11:42 pm
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United States
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 Posted 07/11/2021  4:14 pm  Show Profile   Bookmark this reply Add Oldfordman to your friends list Get a Link to this Reply
I crh.
Valued Member
United States
492 Posts
 Posted 07/14/2021  9:06 pm  Show Profile   Bookmark this reply Add everything to your friends list Get a Link to this Reply
Put your money in a savings account, save what you would put into bullion on a monthly basis, then when the economy crashes buy bullion with both hands. Silver was down to $12 last April, don't forget some are just commodity now. You can also research the other metals.

When will the economy crash again, who knows, I'm still flabbergasted how some of these triple billion valuation corporations book a profit when their only product is add revenue and popularity contests

Personally I think the premium is a rip off I see this everywhere, I call it the subscription service economy. I'm not really on board. I was watching a movie with a friend a few weeks ago and it was on I think fubo TV, it was riddled with adds, longest movie I ever watched in my life. But, then again I won't pay for any of it, I just record OTA programming so I can fast forward through the commercials.

Edited by everything
07/14/2021 9:06 pm
Bedrock of the Community
United States
11983 Posts
 Posted 07/20/2021  11:45 pm  Show Profile   Check spruett001's eBay Listings Bookmark this reply Add spruett001 to your friends list Get a Link to this Reply
In my opinion, if you wanna wait for premiums to go down to a buck or two over spot for something like an ASE, you'll be waiting a long time. I'm adding little by little and have been doing it lately in 5 oz poured bars and 1 oz coins.

I don't much care for rounds but they do have lower premiums. In coins, I have mostly stayed with the lower premium pieces: Britannias, Philharmonics and Krugerrands. Maple Leafs and Kangaroos will be more bang for your buck than ASEs, too. In general, the larger the piece, the lower the premium, e.g. 10 oz bars have a lower premium per ounce than 1 oz bars. I like to have a mix of sizes because while larger coins/bars have lower premiums, smaller pieces are easier to liquidate if needed.

I wouldn't wait for another dip to $12, either. Even if that happens, good luck finding any to buy. Most of the big online dealers stopped sales for all intents and purposes when that happened last year. I like the dollar cost averaging approach. Buy when you can and sell when you have to.

Every now and then I have been adding BU silver dollars and crown equivalents. Junk silver just really isn't for me despite having the lowest premiums. I like the good-looking stuff.
In Memory of Crazyb0 12-26-1951 to 7-27-2020
In Memory of Tootallious 3-31-1964 to 4-15-2020

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United States
180 Posts
 Posted 07/21/2021  12:01 am  Show Profile   Bookmark this reply Add HappyHippo to your friends list Get a Link to this Reply
I'm not stacking a lot of silver right now. I'm just filling in some collections I like - which are quite a few in itself. I've actually bought my first gold bullion coin the other day. It's not as fun because, unless you want to pay high premiums for the fractionals, I can only buy like 1 once in awhile. It just seems the premiums for silver right now are not in synch with the spot price. The demand is just too high. I think that will settle down when people try to sell what they bought and get a nice surprise.
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 Posted 07/21/2021  12:48 am  Show Profile   Bookmark this reply Add PenKneeMan to your friends list Get a Link to this Reply
Also remember you dont have to report coin silver to uncle sam ...bullion you do in some states like florida the seller will make you fill out a firm to turn into the feds ....i stick with coins I can buy 1000 Morgan dollars but if I buy 200 ounces of bullion I have to report it.
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United States
198 Posts
 Posted 07/21/2021  01:02 am  Show Profile   Bookmark this reply Add Numiscrat to your friends list Get a Link to this Reply
When silver spot went down to $12, I asked my dealer about it. His response was that that price was "paper" (contract) only. I think he was still selling ASE's for around $400 per roll. Indeed, no one who wasn't in a pinch was going to sell that cheap for the same reason so many folks were in the market to buy: most expected the price to go up. You can't make people, even the big online dealers, sell when the price is at low ebb if they don't want to.

I have largely slowed down on buying silver, but I did buy a total of ~$300 face of 90% quarters at a local auction a few months ago for less than 17x face, which was/is under spot. But, that was a fluke: local auction, sold in large lots, failure of bidders to calculate value on odd sized lots, and seller accidentally let a few clads into one bag (but nine clads out of 1200 coins is not reason enough to discount by hundreds of dollars). Math is important.

I bought five dollars face from a private seller a few weeks ago. I paid spot. On private deals, I try to do better than a pawn shop, but won't pay retail because I am assuming the responsibility of verifying that what I buy is legitimate.

Premiums on 90% silver dollars (Morgans and Peace) have been high the past several months. During that time, I have sold or traded some of my cull Peace dollars for $25-27 each to someone who was flipping them for a few bucks more. Those premiums seem to be slipping a little. I don't pursue those for stacking at the moment because a $25-27 silver dollar corresponds to a spot price at around $32-35/ozt.
Bedrock of the Community
United States
11983 Posts
 Posted 07/21/2021  01:57 am  Show Profile   Check spruett001's eBay Listings Bookmark this reply Add spruett001 to your friends list Get a Link to this Reply

Quote:
His response was that that price was "paper" (contract) only.

That's pretty much the explanation for OP's question. The "paper price" doesn't reflect the real physical market. They can tank the paper price to $1/oz, but absolutely no one will be selling at that or even close because it defies supply and demand. The only "supply" increasing is in contracts.
In Memory of Crazyb0 12-26-1951 to 7-27-2020
In Memory of Tootallious 3-31-1964 to 4-15-2020

Oh that I was where I would be,
Then I would be where I am not,
Here I am where I must be,
Go where I would, I can not.
Bedrock of the Community
Australia
18972 Posts
 Posted 07/21/2021  02:50 am  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
I bought U.S. $6,000 (6x 1oz. Pt Maple Leafs), about 9 months ago, from a specialist bullion dealer.
Let's see how they go.

I have told both of my kids to take 3 each for themselves, if I kick the bucket. Each batch of three have been packaged along with the purchase documentation.

About 20 years ago, a professional investment advisor suggested that no more that about 5% of your total assets should be in bullion, coins or artworks etc.

The total value of my numismatic collection would be somewhere around that percentage. My problem is that I am definitely not a numismatic investor, - I haven't sold a coin out of my collection for over 40 years.
I may sell the Pt bullion if the temptation arises.

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I have noticed that the U.S. CPI has suddenly shot up to 4.5 % annualized.
Because of this, but I may be forced to buy some more physical bullion, but I would really prefer that the CPI goes back down again.

My alternative is to invest considerably more - perhaps in Real Estate Investment Trusts. (REIT's)
But that will require for me for the CPI to continue to shoot up.

For me, the alternative is Exchange (stock market) Traded index Funds (ETF's), but like Warren Buffett, I would really prefer to stay in cash until the predicted stock market crash happens - then I will move in.
The problem for me with ETF's is that I already have a reasonably balanced and diversified position in the stock market with my superannuation funds, - hence the consideration for REIT's.
Edited by sel_69l
07/21/2021 03:03 am
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Canada
4233 Posts
 Posted 07/21/2021  06:24 am  Show Profile   Bookmark this reply Add oriole to your friends list Get a Link to this Reply
Don't blame the dealers for the high price of pure silver rounds. They sell for a small premium over their buy price, and they have to buy at a premium (bulk lots), so may make 3% profit. Their profit on "junk silver" is probably higher.
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 Posted 07/29/2021  08:32 am  Show Profile   Bookmark this reply Add -makecents- to your friends list Get a Link to this Reply
Oldfordman, I have noticed you like to search, from your other posts, as do I. These folks know MUCH more than I do, when it comes to precious metals, in general but I go about it in a different way. Whether it be on the bay, individuals or pawn shops, I try to find places to buy in bulk, lots, that are less expensive, close to spot and then search them for varieties, errors and better dates. I sell my finds for a premium and this covers or at least helps to cover any premium that I may have paid and I get to search, while banking the rest of the coinage.

All that being said, you have to do your homework and find sellers that are not interested in the same thing but just selling off the coins for the precious metal. Just like any other searching, it's not always fruitful and you have to be prepared for that but when it is, it's a great feeling. My best find yet, was an 1878 P Morgan VAM-44, that I had about $30 invested and sold for $550.
-makecents-
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