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

Originally Posted by lacaprup

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.

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%
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%
Attachment 7030

Originally Posted by JTH

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%
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%
Attachment 7030

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.

Originally Posted by lacaprup

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.

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.

Originally Posted by JTH

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.

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

Hello,
I have been using Blanchard for both gold and silver. They have great customer service and I can buy as little or as much as I want. My preference is the SA Krugerrand. You can buy in 1 oz, 1/2 oz, 1/4 oz or 1/10 oz coins. Good luck.

http://www.blanchardonline.com/blanc...n_overview.php

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!

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.

I'm rather enjoying watching the dollar collapse. Gold and silver are running like wild horses!