I'm coming very close to taking the metals plunge. All advice welcome.

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lacaprup

lacaprup

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A couple days ago I made a very small investment in US Silver Eagles with Lear Capital. My goal for this small purchase is to test their process and make an assessment if I want to buy gold with them. My long term goals are two fold:

1) Buying actual, tangible gold rather than futures allows me to hold it and save it for a higher price option in the future without deciding to sell on a whim. Selling your gold Eagles or Maple Leafs is pretty easy via Ebay or various other internet options, but there is a certain impetus needed to sell physical gold that is not present with futures or stocks.

2) Frankly, I think the U.S. dollar is a fool’s currency right now, and- since I have no desire to venture into ForEx trading- I really have no recourse to hedge against a weak dollar. Further, trading in bullion (i.e. coins) incurs no capital gains tax.

I am open to any and all advice. I am a total novice to metals trading and am only going on my own research at this point.
 
lacaprup said:
A couple days ago I made a very small investment in US Silver Eagles with Lear Capital. My goal for this small purchase is to test their process and make an assessment if I want to buy gold with them. My long term goals are two fold:

1) Buying actual, tangible gold rather than futures allows me to hold it and save it for a higher price option in the future without deciding to sell on a whim. Selling your gold Eagles or Maple Leafs is pretty easy via Ebay or various other internet options, but there is a certain impetus needed to sell physical gold that is not present with futures or stocks.

2) Frankly, I think the U.S. dollar is a fool’s currency right now, and- since I have no desire to venture into ForEx trading- I really have no recourse to hedge against a weak dollar. Further, trading in bullion (i.e. coins) incurs no capital gains tax.

I am open to any and all advice. I am a total novice to metals trading and am only going on my own research at this point.
Click to expand...
1. All investments carry risk. You take the risk, you live with it.
2. Forex is not just a U.S. dollar game....See rule number 1
3. All advice on metals.....same as any other type of trading...see rule number 1, but Silver is in a wierd place right now....having actual metal on hand is not very enticing....

Please let us know how the porcess works and whether it works out for you!
 
IMHO

I like your idea on the silver eagles, I buy them myself and believe they will offer more bang for your buck. I happen to think the move in metals is overvalued and will collapse much faster then it rose.

On this Price Performance Chart, since the March bottom, the S&P 500 is outperforming all others, but, silver is outperforming gold.

S&P 500 60.51%
Silver's SLV 32.09%
Gold's GLD 12.80%
The Dollar -14.80%
View attachment 7029





Now let's go back 20 years...
Silver's SLV 225.52%
S&P 500 222.53%
Gold's GLD 177.30%
The Dollar -22.98%
View attachment 7030
 
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JTH said:
IMHO

I like your idea on the silver eagles, I buy them myself and believe they will offer more bang for your buck. I happen to think the move in metals is overvalued and will collapse much faster then it rose.

On this Price Performance Chart, since the March bottom, the S&P 500 is outperforming all others, but, silver is outperforming gold.

S&P 500 60.51%
Silver's SLV 32.09%
Gold's GLD 12.80%
The Dollar -14.80%
View attachment 7029





Now let's go back 20 years...
Silver's SLV 225.52%
S&P 500 222.53%
Gold's GLD 177.30%
The Dollar -22.98%
View attachment 7030
Click to expand...


Great info, thanks. That -22.98% for the Dollar is a sobering number. I'll keep a semi-frequent post going on how the mechanics of the transactions work out for me; however, this is a long term investment plan unless gold and silver reach extraordinary highs in the near future.
 
lacaprup said:
Great info, thanks. That -22.98% for the Dollar is a sobering number. I'll keep a semi-frequent post going on how the mechanics of the transactions work out for me; however, this is a long term investment plan unless gold and silver reach extraordinary highs in the near future.
Click to expand...

Have you looked in your local area for a coin shop? Sometimes you can get the same deal (saving on shipping) and put the money directly into your local economy.
 
JTH said:
Have you looked in your local area for a coin shop? Sometimes you can get the same deal (saving on shipping) and put the money directly into your local economy.
Click to expand...


I have not. I'll be sure to look into it.
 
Hello,

Not to be a Kill Joy (pardon the pun), but economically speaking, I have always been averse to investing in anything that carries only intrinsic value (and even the intrinsic value of gold is often debated; I tend to believe that the value is representative vice intrinsic).

The only reason that gold can even be measured is that it is based off the American Dollar, and in times of crisis is used to hedge portfolios... I see three huge economic problems with this:

1) Utility: Many buy gold in order to ensure that if dooms day approached, they could theoretically use it as a medium of exchange… The truth is that if such a crisis were ever to happen, the utility of gold itself would change… For example, if the dollar lost all value, and anarchy reigned, then do you really believe that you could go to another individual, and buy potable water with gold? I for one would love to see someone enter a store and try to purchase goods with a bag of gold or silver.
2) Liquidity: In truth there is no liquidity to this, as you would have to find a dealer, and thus would be victim to current economic stress (the same as any other investment).
3) Cost: Even the most well-intentioned dealer has to cover operating costs when dealing in any consumer good, gold being exactly that, and thus has to pass that cost onto the consumer… So, simply put, you lose purchasing power immediately upon investing? That seems like a poor investment to me…

There are many other larger and more theoretical reasons not to invest in Gold or Silver bullion (mind you I am not referring to paper investment of precious medals). As an economist, it is hard for me to neglect the fact that as the worlds economy advances, golds value will be further relegated to a utility value (such as using gold to make wire or other conductive oblects) instead of a luxury good value (gold ring coveted by your wife)… It is a very obsolete medium of exchange, and will eventually be compared (IMHO) to the spices that at one time made up the purchasing power of a country (interesting to note that at one time salt was more valuable than gold).

Hope this offers a different view that you can think on before making such an important decision.
 
Well, I'm happier than a pig in poop that I got into Silver Eagles when I did. They're remarkably easy to sell too. In my brief foray though I've learned one thing about PM coin trading: you play the ratios.

I am buying silver now because gold is 62.3x as expensive per ounce than silver. You stock silver now, then trade it for gold when the ratio is down to about 30:1.

The rest of the world is waking up that the U.S. dollar is crap. Jump in for the good times!
:nuts:
 
Kill Joy, I certianly understand and respect your point of view. Gold and silver is important, but will never be more important than food, water, shelter.

But here's the thing. Gold will always be worth something somewhere even if America fell into disorder. I know this because history shows us what happens when governments fall apart. Gold is accepted in every country in the world.
 
Always happy to help.

http://www.lme.co.uk/non-ferrous/index.asp

is the site for London metals exchange (LME), the premier trader. They also open earlier than Chicago. Sorry, no gold/silver/platinum, but the other metals are present. Most of these are industrials, but if you want commodity metal prices, they're here.

The other is, of course, Chicago. They mostly trade in Au/Ag/Pt but also copper.

http://www.cmegroup.com/

I'm still not biting the gold market. I think commodity prices may overtake.
 
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I'm rather enjoying watching the dollar collapse. Gold and silver are running like wild horses!
 
I read an article the other day....about China and India beginning to stockpile gold. Also China has told their people to save at least 5% and buy gold...as it will become more valuable in time. Gold has been really taking off...the problem is that unless you've got a bunch of money...you probably have to pay storage fees etc which is on the downside. I know there's a big company one in the NY area. Can't remember it's name. You can buy 1 oz, etc of gold. I'm not as interested in silver. If I was in the US it might be fun....a challenge to try paning for gold in CA or somewhere. Here in Asia...it's too dangerous...kidnappings etc.
 
lacaprup,

What do you see in JTH's 20-year chart?

What I see is that Silver and Gold floundered in the Dot.Com boom and then banged up during the real estate/credit bubble. Both silver and gold then collapsed during the recent market crash - a cruch from elevated growth ratios.

There doesn't really seem to be a negative correlation between silver/gold and other investments. Maybe I'm reading the chart leaves incorrectly. What I see is a bubble.

Regardless, do you think the FED will allow the dollar to collapse forever? That the EURO and Yen have no problems? That the oil ticks are the masters of the universe? That China will not have another of their statist grabs and clamp downs?

Can you answer those questions?

Personally, I would pay down debt with the cheapest dollars you will likely see for a very long time. With all of the money growth the FED and Spendulus pumped in we are still living in mild deflation. When all those efforts crap out - because some of the efforts (not the FED) were unbelievably stupid - the trend will be stronger deflation. Maybe a brief period of inflation will pop up first - which will kill folks on revolving credit. What happens to Silver/Gold during deflation? Nothing good...
 
Gold prices are inflated - how can you tell? It's all the speculation going on. Jewelery companies are buying gold from customers because they think it's overvalued, otherwise they would not be doing this. Gold unfortunately is not just a "currency", it also has some real industrial uses. If it gets too overvalued, it will effect those products using it (electronics and others) and those industries will try their best to bring down the price to reasonable.

Silver is more reasonable because it doesn't have gold's cache'. There was a time when it got unreasonable, but that was due to a major player in that commodity jinning the price up - notice that didn't last long and it dived afterward. If I was to invest in a metal, I'd like silver better than gold, but personally I think that investing in metals should be seen from an industrial value standpoint rather than as a replacement for money. The speculation in copper has already led to people stealing copper pipe and telephone wire and I don't like the trend - so take what I say with a grain of salt as I am admittedly biased.
 
The time to invest in metals has past...

Its best to buy low and sell high...

Its a gamble to buy high and hope for higher
 
I wouldn't buy gold unless it went to $990-$999 level, which is where I would set any limit orders for purchase. I would only buy the ETF's, that way there's no physical attachment to it. I can't hold an ETF, I can't show off an ETF. (I know, I know.... I couldn't muster the courage to sell my baseball cards 10-15 years ago. Sigh) With gold and silver, there are no tax incentives for holding on to LT cap gains since both are taxed the same.

Therefore, just trade it like a mercenary in an IRA account.

Gold is going higher forever, just like Oil a little over a year ago and t-bills 10 months ago.
 
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