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 Replies: 6 / Views: 1,183 |
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Valued Member
United States
63 Posts |
As a coin collector, I collect for the enjoyment. But I have a question about physically investing in precious metals. What is the best way to phycially buy and sell precious metals. For example, if I wanted to invest $45,000.00 in gold. What would be the best way to buy the gold? Would I order 45 uncirculated gold eagle coins from the mint? Or is buying from the mint strickly a collecter type of thing? And then when one wants to sell, I don't think ebay is the appropriate place to trade on a large scale. How do you liquidate? I would think a coin dealer deals more with the hobby/collecting side of things. Who do you sell your gold to? Would the bank take the eagles at the current market rate? Any guidance or help is appreciated. Thanks Dorion |
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Pillar of the Community
United States
533 Posts |
With 45 grand you would probably be better off opening a brokerage account with a commodity trader. Unless you have a large pawn shop nearby that has gold bullion. I wouldn't buy that much from them unless they would guarantee you that they would buy the entire amount back at any time. Also with that much I would probably buy more bars then rounds or coins. 4-10oz bars and you are almost there. You can also buy that much from kitco here. https://online.kitco.com/bullion/ |
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Pillar of the Community
United States
533 Posts |
By "physically" do you mean that you literally want to have the gold on hand in a safe deposit box or something like that? If not, buying the commodity through a broker is the way to go. If you want 45 oz. on hand make sure you keep it safe and secure. Also, if it's an investment, I would stick with bullion. That way you are not paying a numismatic premium and would not be subject to fluctuations due to a coin's popularity.
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Valued Member
United States
231 Posts |
Dorian- the brokerage idea is the is exactly what you should do. This will play out just like any other commodity such as wheat or soybeans, i.e. you will hold the gold on paper instead of in hand. In this case you would be able to sell at the given buy price in a matter of seconds on any given day for a small fee or course.
If you did end up buying gold in hand you do not want to buy from the mint because you will pay a hefty premium over spot. With that kind of buying power yu should be able to buy for spot. I and many others consider price invested as well as current market value when someone spends a large amount on a precious metal. Meaning that you have enough money to get gold at spot or just below from the right person because anyone with enough gold to sell you that much has a stockpile that has been sitting and therefore was bought below spot when spot was much lower than it is now. So, selling to you at below spot moves a chunk of inventory and still generates a nice profit.
When yougo to sell, that amount of gold will get you access to a wholesaler who will usually pay you close to melt. We pay 98% in my area and most will travel a short distance for huge buys at a lower rate. Just use you best judgement and search for a good buy rather than taking the first one that comes along.
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Valued Member
United States
60 Posts |
I think there is some value to have both physical and paper precious metals. It depends on if you plan on keeping them long term or short term. The physical silver I own is meant more for long term holding and is just a small portion of my overall portfolio. Since I don't plan on selling it at a moments notice, liquidity is not an issue. I figured out that when it comes to pure margin, the best investment vehicle is physical bullion. All new money that I am currently putting in PM's is in the form of The ETF's and options. Those are meant strictly as short term investments, therefore I need liquidity. On that note, if you understand how PM's and other commodities react in relation to events, news, the markets, and the USD, this is a really fun (and potentially very profitable) time to trade.
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Pillar of the Community
United States
533 Posts |
Also, if you want exposure to precious metals and regular old organic growth, look into some mining stocks. Some of my favorites are AUY, ABX, RIO, PAAS or just buy a gold or silver ETF (exchange traded fund) like GLD, IAU, DGL, GDX or SLV or DBS. ETFs have the luquidity of stocks, but they track the price of whatever makes up the ETF, in this case gold or silver. This would actually be the easiest way to 'own' gold or silver. You could open an online trading account, and be trading by the end of the day. Commissions are also ultra low at these kind of places. (like less the 10$/trade). Then you could also have a blend of ETF's and also mining exposure.
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Valued Member
 United States
63 Posts |
Alot of good advice here. I really appreciate everyone who chimed in. jcook54, Yes. I mean physically on hand. Currently, even though I don't trade precious metals in a brokerage account, I agree that is the best way to go when trading large sums of metals for investment purposes, especially for headge purposes. Since I received all this great advice, I'm going to check out some of the stocks and commodities that everyone mentioned. However, in diversifing my portfolio, I was think about some ultra low risk "safe" ventures of actually having a portion of the assets in hand (whether it be in a bank safe deposit box or buried in my back yard under the bird bath  ) I'm looking at it as more of a complementary piece in my porfolio, which led me to the question, what would be the best way to procure it and possisibly liquidate it at the time. |
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Replies: 6 / Views: 1,183 |
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Posted 03/14/2008 12:59 pm
