Buying Gold / Silver / Precious Metals
 

Guys,

I want to buy some kind of precious metals in bars or coins. Has anyone done this before? I know you have to pay a little premium to actually get the metal in your hand but buying ETF's / mining companies in this case is not an option.

Any suggestions?

Also does anyone have any thoughts on if this is good/bad time to be buying precious metals?

Thanks a lot!
CM

Re: Buying Gold / Silver / Precious Metals
 

Just check the going prices and wait until it drops. I buy silver all the time. Some here will tell you about ETFs but I know nothing about them. I buy and take physical possession of them and can sell them whenever I think the price won't get much higher or I make a minimum of 100 dollars per 100 ounce bar.

Try Northwest Territory Mint or Bullion Direct.

Re: Buying Gold / Silver / Precious Metals
 

Why do you want to buy metals?

Re: Buying Gold / Silver / Precious Metals
 

Keith,

Do you buy from bulliondirect.com?

Who do you sell them back to when you are ready to sell? How much of a premium do you think you are paying to hold the actual metal? Can you sell them back for the exact amount of gold/silver at the time of sale or do they buy it for slightly below the going price?

Thanks for the help!
CM

Re: Buying Gold / Silver / Precious Metals
 

Northwest Territory has free shipping but Bullion Direct sells the actual product cheaper but you have to pay shipping. So it evens out.

I resell on Ebay. Seems like the buyers still pay more than the actual spot price.

Re: Buying Gold / Silver / Precious Metals
 

its hard for non-US people to invest in gold given that most gold is traded in dollars. if gold goes up, its primarily due to the weakening of the dollar, and so when we sell out dollar holding it is sold at a far worse exchange rate than our purchase exchange rate.

any ideas? any ideas on how to buy gold bars/bullion? the only listed companies in london are all small mining companies. if i were to go down that route id want a number of mining companies which im struggling to find.

any help appreciated.

Re: Buying Gold / Silver / Precious Metals
 

holla. just found the london ETF in gold. GBS.L.

my one concern though is this:

from moneyweek.com:
Gold Exchange Traded Funds (ETFs):
Stamp duty is applicable and there is an annual administration fee of between 0.4% and 0.5% per annum. Thus every year the amount of gold or silver backing an ETF share shrinks by that amount. This makes them unattractive as a medium or long term way to invest in gold. They are derivative contracts and one does not own or have title to the underlying asset. Thus they are primarily used by day traders, hedge funds and institutional players going long and short and speculating on short term movements in the gold price.

I am thinking of going for this:
Precious Metal Unit Trusts or Mutual Funds
Instead of personally selecting individual shares, some investors spread their risk by investing in collective investment vehicles specialising in investing in the shares of gold mining companies. These include mutual funds, open-ended investment companies (OEICs), closed-end funds, unit trusts. Two of these funds are the UK-based Gold & General Fund by Merrill Lynch or the Canadian Sprott Gold & Precious Minerals Fund by Sprott Asset Management. There are many precious metal funds in the US but investors assume US dollar currency risk when buying them.

this is it: http://webfund5.finexprestel.com/ampleis...b--1&hn=www

my only concern is the ETF is up just under 40% in the last 52 weeks yet that fund is down 7.1%. plus fund is 1.75% yearly.

given what ive read gold should be good for at least the next few years.

what do you guys think?

i'm planning to invest heavily in gold, the more i read the better it seems. im thinking of investing around $40K in gold. i have $100K net worth. but i hope to make around $80K this summer through poker, so even if it halfed in value, it would only be a month of online gone, plus i dont think it will.

Re: Buying Gold / Silver / Precious Metals
 

and despite the 1.75% in annual fees, it would cost me more than that in fees to have a diversified portfolio of exploration gold mining companies etc.

i like this idea.

Re: Buying Gold / Silver / Precious Metals
 

Keith,

I want to buy 50-100K of gold coins so I don't think reselling via eBay is an option...

Have you sold back to any brokers etc in the past?

Thanks alot!
CM

Re: Buying Gold / Silver / Precious Metals
 

Wow..cannot believe this.

Why would you rather purchase metals then invest in stocks?

Golds going up, but not faster then any guaranteed investment.

40k into Google is a better return then gold.

40k into producing copper and moly mines and you will be loving Q2's results. Gold is just behind these mines..

I don't know why your worried about the fees John, you can trade your own stocks for 20 bucks a trade.


lambdb

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
Wow..cannot believe this.

Why would you rather purchase metals then invest in stocks?

Golds going up, but not faster then any guaranteed investment.


[/ QUOTE ]

lol http://www.blanchardonline.com/image...tock_chart.gif

Re: Buying Gold / Silver / Precious Metals
 

http://gold.seekingalpha.com/article/9381

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
[ QUOTE ]
Wow..cannot believe this.

Why would you rather purchase metals then invest in stocks?

Golds going up, but not faster then any guaranteed investment.


[/ QUOTE ]

lol http://www.blanchardonline.com/image...tock_chart.gif

[/ QUOTE ]

Your graph is <u>extremely misleading</u>. Dividend returns of the S&amp;P 500 are not included. You absolutely cannot imply that equity investors would be even just because the dollar value of the index is at the same level as 2000.

What is the point of this graph?

Is your point that you believe an exploitable, long-term momentum effect now exists in commodities that has not manifested itself before? Is your point that this run up in gold prices is somehow fundamentally different than any other gold bull, and implies real growth in assets? Is your point that although the price of gold (IN DOLLARS), has more than doubled, it is still undervalued? Is your point that gold is a better investment than equities because of its role as a hedge; and are you therefore predicting a bear market, something no one has ever been able to do with certain accuracy?

Please explain what you mean by "lol." It does not convince me, and I sincerely hope it does not convince others.

Re: Buying Gold / Silver / Precious Metals
 

I've suggested this before on these boards: If you are looking to invest 50-100k in gold, you could invest in the mini contracts at the BOT. 33.2 oz contracts.

With gold ~690oz, you could buy 2 contracts worth $45k. You would need about $1800 in margin, which you cover with a 5k-$10k t-bill earning interest. Take the remaingin $40k and put it into a vanguard MM.

Bid/ask is super tight. If you roll with spread orders, you will basically only pay commission on rolls.

Keep in mind that since you are earning interest and don't have to pay to store/insure your gold, you will pay a premium equal to that amount.

I've never dealt with taking delivery, but that is always an option.

Same thing with silver, they have 1000oz contracts, ~$14k per.

Re: Buying Gold / Silver / Precious Metals
 

It's too bad the Vanguard Precious Metals &amp; Mining Fund is closed to new investors.

Re: Buying Gold / Silver / Precious Metals
 

Regarding the chart:

A $10,000 investment: your returns with gold and stocks

Had you invested $10,000 in gold bullion in 1999, your initial investment would have grown to $22,205 by 06/30/06 – a 122% percent increase.

That same $10,000 investment in stocks of the S &amp; P index would have netted $10,162. That’s a 1.162% increase.

Lamb mentioned: Why would you rather purchase metals then invest in stocks?

I just pointed out that Gold (And other metals) has done resonably well compared to stocks over the last few years. He asked 'Why purchase metals rather than stocks...

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
I just pointed out that Gold (And other metals) has done resonably well compared to stocks over the last few years. He asked 'Why purchase metals rather than stocks...

[/ QUOTE ]

http://upload.wikimedia.org/wikipedi...dlogtr1800.png

The Dow is a [censored] benchmark, but it probably understates the appreciation of stocks relative to gold.

Gold/Precious Metals are only appropriate in small quantity as a diversifier(if at all) for aggressive investors. You better be damn good if you want to speculate on the direction of gold prices.

Re: Buying Gold / Silver / Precious Metals
 

The main reason most people want to purchase actual metals (not mining stocks etc) is because its a lot easier to hide 100k in gold bars or coins from the government and other prying eyes than it is to hide a 100k stock portfolio...

Just my thoughts...
Scrilla

Re: Buying Gold / Silver / Precious Metals
 

Adding non-correlated assets to a portfolio can decrease the risk/return ratio. There is a greater than a 0% chance that we will wake up one day with Dow ~5,500 and gold ~$1,300. You don't have to predict prices of stocks or gold, just prepare.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
Adding non-correlated assets to a portfolio can decrease the risk/return ratio.

[/ QUOTE ]

As I said:

"Gold/Precious Metals are only appropriate in small quantity as a diversifier(if at all)"

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]

As I said:

"Gold/Precious Metals are only appropriate in small quantity as a diversifier(if at all)"

[/ QUOTE ]

Yes, I am agreeing with you.

Asset A returns ~10% per year
Asset B returns ~4% per year

Which does one invest in? The answer isn't just "ZOMG, 100% A"

One needs to analyze the correlations, risks, and personal ability to accept these risks in order to make a decision.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
Adding non-correlated assets to a portfolio can decrease the risk/return ratio. There is a greater than a 0% chance that we will wake up one day with Dow index value BELOW the $ value of gold . You don't have to predict prices of stocks or gold, just prepare.

[/ QUOTE ]

The Dow/gold ratio returned to around 1 to 1 after the bull market peaks of 1929 and the late 60s. Why shouldn't it occur again after the 2000 ratio peak?

After (was it Nixon) the gold standard was dropped in the early 70s, gold rose from around $40 to over $800 by 1980.

That was a 2000% increase.

Spot gold has risen from around $250 in 2000 to around $700 now. That's less than a 300% increase.

I think gold has more upside.

As for physically buying gold, there's a possiblity gold will be illegal to possess in The USA in the future (except for industrial purposes), and can be repossed by the government.

You can hold certificates of deposit in gold from a more politically stable country such as Australia, where a lot of gold is mined. The Perth Mint of Western Australia is not a bank (and I know how much The US government likes to know about its citizens' personal finances) and so you don't need to declare your holdings.

Buying gold mining companies offers some leverage on the price of the commodity they mine. This leverage is limited by the rising inflationary costs of mining it, which is usually the economic backdrop during periods in which the price of gold increases.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
Regarding the chart:

A $10,000 investment: your returns with gold and stocks

Had you invested $10,000 in gold bullion in 1999, your initial investment would have grown to $22,205 by 06/30/06 – a 122% percent increase.

That same $10,000 investment in stocks of the S &amp; P index would have netted $10,162. That’s a 1.162% increase.


[/ QUOTE ]

Again, that statement is <u>factually incorrect</u>. You are forgetting to include dividends in your calculations of stock returns.

Re: Buying Gold / Silver / Precious Metals
 

Historically....

Gold is a horrible diversifier, becuase you can cut risk more efficiently by moving to bonds/cffs/t-bills.

Commodities do not provide efficent diversification, and they hurt returns. Commodity futures funds, on the other hand, are great diversifiers and have stock-like returns.

Re: Buying Gold / Silver / Precious Metals
 

I would recomend putting 10% gold/silver/plat/whatever metal in your portfolio. I would recomend taking physical shipment of the bars and not telling anyone.

The reason is for a total [censored] hits the fan scenario. I belive gold ect will still be valueable.

Re: Buying Gold / Silver / Precious Metals
 

If society collapses, why will gold be valuable? Or more at least more valuable than weapons, canned food, technology?

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
If society collapses, why will gold be valuable? Or more at least more valuable than weapons, canned food, technology?

[/ QUOTE ]


why has gold been valuable for millinium? it is a store of wealth the other people recognize.

Re: Buying Gold / Silver / Precious Metals
 

I would not be trading food/technology/weapons for a yellow brick after society collapses. Gold, it seems to me, lacks the inherent values of other storable goods.

Re: Buying Gold / Silver / Precious Metals
 

this is a really interesting discussion.

the main reason i am wanting to invest heavily in gold is because i think the us economy is more likely to weaken than strengthen. given this will hopefully have a positive effect on the dollar.

also in general i have been trying to invest in companies nobody is predicting a crash, yet some people are predicting a boom. when i bought my gaming shares, i read up on what people were saying the weeks beforehand and some were still saying it could go lower. i bought when the significant majority were saying buy. this meant i bought party at 27p the lowest it ever hit. yes, i know very lucky, for sportingbet i bought at 44p and it went down to 35p or so, but still, its up over 55p now.

anyways, its been the same for uranium and gold. nobody i can find is predicting a crash, yet some people are predicting a continued surge.

you can find countless reports in 2006 onwards of uranium by googling and the overwhelming majority say to invest. maybe thats just becuase they get more hits than the doomsdayer ones, or becuase most sites are promoting people to invest.

but the same applies to gold (and even more silver i'd say) that people are saying to buy.

ask me technical reasons why i should buy? i can't. but i don't feel i need to. so long as i keep up to date by reading reports etc, i feel that keeps me in touch.

gull, i read something recently how people in the 19x0s (x = 6-8, cant remember) were queueing for numerous hours to buy gold coins as they felt that was the only safe purchase to make.

i dont think we need society to 'collapse' in order for gold to surge, we just need a bear market run.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
If society collapses, why will gold be valuable? Or more at least more valuable than weapons, canned food, technology?

[/ QUOTE ]

Other countries will always love gold but they may not always love the U.S. Dollar.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
anyways, its been the same for uranium and gold. nobody i can find is predicting a crash, yet some people are predicting a continued surge.

[/ QUOTE ]
When sentiment gets so one-sided, it's usually a good sign to start looking for the exit door. I'm not saying to go through it yet; but, definitely locate it, position yourself closer to it than others, and maybe even crack it open and put your toe out a little.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
When sentiment gets so one-sided, it's usually a good sign to start looking for the exit door.

[/ QUOTE ]

i completely disagree. as i said above, maybe its becuase 90% of articles you will find about any investment will say 'invest' and 10% 'don't invest' but for every 1 uranium article in 2006 you can find saying it is a bad investment, im pretty sure i could find you 20 saying to invest.

but your logic above, you'd of missed out on a price rise from price over trebling since 1st jan 2006.

here is an article from moneyweek on the early february 2007. spot price of uranium $75. They, like almost every article under the sun, said to expect $100+ this year.

http://www.moneyweek.com/file/25277/...this-year.html

from memory currently is around $113. when you have a vast number of 'experts' saying to buy something for the next 6 month+ period. I am sure im some cases the cliche is true, but you have countless cliches for everything. maybe 'you got to be in it to win it' 'you can't lose what you don't put on the table, but you can't win much either' 'he who dares wins' etc etc.

cliches or one liners mean nothing imo.

sorry, i think ive gone far too extreme in my reply. just when trying to learn about investing, you hear so many different viewpoints. no jokes, i don't think ive ever come across learning something without so many people thinking they are right in what to do, each with valid arguments. that is what makes it so hard i guess.

all im trying to do is find a few investments which i think will do very well given the trends. my first one was gaming shares, then uranium, now gold. each have done very well, and i hope uranium will be the same.

sorry if this has come across as a tirade, just pretty tired from doing too much work recently and realising I have $2K less than I actually do (spending a lot recently, bad debts)

Re: Buying Gold / Silver / Precious Metals
 

also one other thing, i do agree that when the general public are all buying then it's a good time to start looking for the exit door, but right now i dont think the general public are, and so by buying now i hope to ride the price rises of both dollar weakening and the public realisation that gold should be bought.

if thats what you meant, which i think it is, then i agree far more than what my first reply indicates.

apologies.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
I would not be trading food/technology/weapons for a yellow brick after society collapses. Gold, it seems to me, lacks the inherent values of other storable goods.

[/ QUOTE ]

That is a silly statement to make. How do you think people traded goods before the creation of paper money? Bartering is inefficient because of the problem with double coincidence of wants.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
also one other thing, i do agree that when the general public are all buying then it's a good time to start looking for the exit door, but right now i dont think the general public are, and so by buying now i hope to ride the price rises of both dollar weakening and the public realisation that gold should be bought.

if thats what you meant, which i think it is, then i agree far more than what my first reply indicates.

apologies.

[/ QUOTE ]

John, I never know whether you are investing or trading. It sounds like you're trend following.

What are your exit strategies for these commodities you're heavily into?

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
I would not be trading food/technology/weapons for a yellow brick after society collapses. Gold, it seems to me, lacks the inherent values of other storable goods.

[/ QUOTE ]

Gold has always been a backing for paper money or credit notes somewhere on earth since 2500B.C. Many societies have collapsed since then.

The US government dumped gold as a backing for The $ in 1971. They might have to return to this time-tested method in the future.

Re: Buying Gold / Silver / Precious Metals
 

i started off trading, then went to investing, now investing in the short term [img]/images/graemlins/smile.gif[/img]

trend following is good with me so long as i get in when it still has time to run and get out before it goes bellied up.

with uranium, i already sold around 20% of my holdings as it's become stagnant recently. either way i jumped in around $80 and its now at $113.

anyways, as for gold, im thinking of going for a CFD.

plan was long (obv) for $60 per full dollar with a $600 stop loss.

sound good?

my figuring for $60 was i initially wanted about $40K in gold, so that works out at around 58 oz ~ 60.

so if i put in $60 per $1 that should give me the same risk.

but means I don't have as much tied in yet can get the same returns. the most I can lose is about $5,400 if it drops to $600.

As for exit strategy, I will hold till I no longer feel it will continue to rise based on what I read.

I feel I have tried to implement exit strategies with some of my holdings, I held sportingbet till an announcement then sold a couple of days later, I kept party till nly a few days ago as I felt it had reached its target price, I've started selling Uranium (although may well hop back on board) due to market stagnation.

Anways, do you think a CFD is a good idea? Note I will be going for the account which limits your losses to what you deposit.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]
As for exit strategy, I will hold till I no longer feel it will continue to rise based on what I read.

[/ QUOTE ]

You used the words 'feel' a few times when describing your exits. It all sounds a bit emotional to me.

Anyway, which CFD provider do you use? Bear in mind that many UK CFD providers make their own market and they are in effect a "fake" market - like spreadbetting.

CFDs do follow the market more closely than spreadbets, although they still trade at a slight premium, which tends to be somewhere between the nearest future delivery price and the spot price.

And remember, spreadbetting is free of income tax...

How long do you plan to hold your CFD? After a month or 2, financing costs (on long positions) erode the cost savings of eliminating stamp duty on shares (and I think GETF are subject to stamp duty, whereas index ETF aren't).

[ QUOTE ]
plan was long (obv) for $60 per full dollar with a $600 stop loss.

sound good?

my figuring for $60 was i initially wanted about $40K in gold, so that works out at around 58 oz ~ 60.

so if i put in $60 per $1 that should give me the same risk.

but means I don't have as much tied in yet can get the same returns. the most I can lose is about $5,400 if it drops to $600.


[/ QUOTE ]

I assume this is your position sizing, but I don't quite understand what you mean. A gold CFD, I assume is a contract representing the spot price? What's the leverage you can get, and what's your account size? What percentage of your account does $5400 represent?

Re: Buying Gold / Silver / Precious Metals
 

sorry kimchi i didnt reply earlier, i had logged out of my account and then back in a day later and didnt realise you had replied (hence my extra thread today).

i use tdwaterhouse and yesterday set up their CFD account. I have spent quite a while trying to understand all this (isnt easy when your learning all this new info). the NTR spread is 5% (what does this mean?).

I can get for a full dollar $10 to $500 which I assume means for every $1 change in the price of gold I can make/lose $10 to $500.

My account size is much like my poker bankroll in the sense I can make it what I want (within reason). I'm a 22 year old who has been lucky and got $100K when he should have $0, through online poker. So I feel if I do lose, heck, it's not the end of the world, I like to think I have a pretty good sense of what is important (yeah I can get pissed off when the stocks dont go the right way, but still I understand 'the bigger picture' so to speak).

It is still hard to predict obviously, I just spent the last hour+ on kitcomm.com a metals forum and it's hard to decide. The general consensus was a pullback from $670 to $640-$650 and hopefully up to $700+.

I calculated the overnight financing (see other thread if interested) and it worked out at $14/day at $100 stake. So I need gold to go up $1 per week to break even.

Spreadbetting seems very inviting as its free of capital gains tax, however I need to work out what the difference is.

Anyways, I'm not sure, it is hard, however, I like the look of going down the CFD/spreadbetting route simply for the leveraging aspect. I know a people reading this will be 'omg he'll just lose his money way faster' but still I'm trying hard to learn.

I'd say I wouldnt be suicidal if I lost $40K of the $100K, anymore would suck. I mean I only had $20K in December, so this is all pretty nice.

Part of me earlier wanted to go for $400 per $1 on the spot price and put the $40K in with if it hit $570 I'd be busto of the $40K, but part of me thinks I should not be so money management stupid. I think putting in the $5.5K is a safe(ish) amount to risk.

Re: Buying Gold / Silver / Precious Metals
 

[ QUOTE ]

the NTR spread is 5% (what does this mean?).



[/ QUOTE ]

NTR is the Notional Trading Requirement. It has nothing to do with the spead. An NTR of 5% means that you have to deposit 5% of your position total.

5% NTR is effectively 20x leverage. The NTR of a market tends to increase/decrease as the market's volatility increases/decreases.

If you bought a single contract of gold (100oz) that would be about $65000 - $70000 market exposure. You only need to deposit 5% of that into your TDWH account. Not sure what the contract sizes for CFDs and spreadbets are. I assume spreadbets are £1 per cent (or $?) and CFDs are each probably worth an ounce of gold.

Remember that financing can become expensive if you hold a (long) position for more than a month or 2, and it is charged against your market exposure, not your margin deposit.

As for risk. You have $100k account. If I were you I'd place a stop-loss at a sensible position below the market. If that stop-less were to hit, I would only lose $1000. You can then work backwards and decide how many CFDs you can afford when only risking 1% of your account.

It doesn't matter if you have 100 or 1000 x leverage if you manage your risk properly.