Silver ASE vs Gold AGEs ... which would you buy for long haul?

I'm contemplating, when the prices are favorable, in investing (for the long haul) in either silver American Eagles (probably in quantity of 5 or 6 per purchase depending upon price) or in 1/10th Gold Eagles, which would be an equivalent price for this discussion.

Now the only initial advantage I see in gold is equivalent storage space.

A 1/10th AGE tube holds 50 whereas an ASE holds 20 1oz.
thus at current prices 1 tube of 50 AGE 1/10ths would be equivalent to 17 tubes of 20 ASEs.

Quite the storage space difference.

But in the long haul, looking back at trending history, which would be better to own and thus SELL in the future. Selling more ASEs may equate to a larger potential profit versus fewer AGEs?? seems to be the question at hand. Yes I'm asking about your magic future predicting powers here, but only looking back at history.

Excluding concepts that PMs are potential losing factors once inflation, etc are factored in as If I included emergency CASH which is always a $1 to $1 factor irrelevant of inflation, and Ag/Au varies with a longer term increase in valuation versus Cash (is my thinking); thus the reason I'm thinking of PMs in addition Cash in the SafeDepositBox.

Also, No need financial recommendations as I have Gov't bonds, moneymarket, gov't retirement bonds, stocks, retirement accts and other various investments that I'm always working on.

Of course there's add'l cost for a larger SDB but let's leave that out of the equation for now (yeah, yeah, it should be calculated in there for a 20 yr hold or whatever as it is an expense but I keep other things in there anyways, but I just want a general idea of people's concepts).

Either way, It'll take me a long time to fill one tube of 1/10th AGEs assuming one per month maximum, but it will even save storage space versus cash. And I want to keep a small SDB versus maybe needing a larger one for ASEs.

This is for tube BUs, nothing slabbed, nothing Proof which is add'l over BU.

What are peoples thoughts on it for the long haul?

 

Log in or Sign up to hide this ad.

Here's the problem I see with 1/10 ounce gold eagles. I went to a very reliable PMs dealer site this morning. A one ounce AGE was going for about $1,370. One tenth ounce gold eagle was $145 -- the equivalent of $1,450 per ounce.

That premium will be paid every time you buy a tenth of an ounce. You already start in the hole with a one ounce as compared with the spot price. It's even worse with the smaller denominations.

 

I'm with Santinidollar and see no reason to pay additional premiums for gold fractions. No idea about the future obviously but I keep a couple of ounces of silver for speculation; it does seem to have a bigger potential gain but so too, loss (volatility and visibility).

My actual savings is kept in gold and FRNs.

 

Yes, currently the gold premium is $11.55 per /10th over a 1 oz.
which equates to 115.50 per oz. I never thought of looking at it that way, but that definitely helps.

I'm not in the situation to buy a Gold 1oz without having to save up so I actually didn't compare the 1 vs 1/10.

But looking at Provident this instant.
Silver BU ASE is $21.55, buy-back is $19.76 with a ($1.79) loss. So say 6 which is $1.79 x 6 = ($10.74) Silver vs
Gold 1/10 $146.16 purchase & buyback at 134.36 which is ($11.80) per 1/10th. Thus $1.06 loss in Gold vs Silver if purchased in similar $$ and returned immediately.

But spreading that over the entire purchase (1 tube Gold vs 17 Silver) by lot it's Gold ($590) vs Silver ($608).

So Gold is a cheaper loss in a way if all bought and sold in an instant due to quantity. But by 1v6 small lots Silver is a cheaper loss though not totally equivalent.

It actually requires 6.78 Silver 1oz to 1 Gold 1oz versus 6 when I did the calculation, which would calc out to Silver ($642) loss in equivalent one lot 1 gold 1/10 ($11.80) and 6.78 Silver 1oz s ($12.13) .

This calc excludes the actual spot price and I used a general buy-back price in which Gold loses another $7/oz and Silver $1.46/oz which equates too another ($350) for Gold and ($496.48) for Silver over an entire lot.

of course this excludes any numismatic valuation in the off market, which I think the silver would have an edge.

Oh poo ...
I gotta check my calculator again (time to make a spreadsheet).

Maybe I should just get the no-load/fee ETFs in Fidelity. This seems to be the best route versus actually holding the PM. Though I have to calc into it buy/sell transaction fees.

 

IMHO those smaller, ie quarter and 1/10th oz coins are more novelty than real investment. I believe I might have one of each of the fractions in a type set - but being cheap I stick to oz coins for the lower premium. At least a few years ago you could get EF-AU Libs and Saints for about 2-3% over spot. It was cool getting 100-130+ year old gold coins for a small percentage over spot.

 

I would only buy fractional gold if you were a zombie apocalypse type. Other than that save for a nice 1 oz AGE or Buffalo. They are Much more liquid on the sell back too.

 

I think I'll stay away from PMs for investment purposes. I can do an ETF or even a better more consistent return investment.

This all came up when I was contemplating a 2009 1oz Gold extra high relief coin based on the Saint. But I think I'll bypass it and get a Saint instead and finish up my list of coins which are all bullion based now.

I love old coins too. I think of what the history was like at that time. I have a few pre 1800s and just filling up on some specific silver half coins and then a few gold numistastic coins - old $1, half etc.

 

History is a big part of collecting for me as well. I do a lot of metal detecting in Iowa and Nebraska, lots of ghost and semi-ghost towns. To say I feel alienated or melancholy by the state of middle America would be an understatement of immense proportions.

One town I've visited on several occasions is named Gravity. The sign when entering the town reads "If Gravity fails, the whole World goes with it." And yet it is barely a town any longer. No "Downtown", only a block or two of houses and a couple of abandoned churches. Gravity has indeed failed.

The town park is still cared for, a civil war memorial statue is the centerpiece, erected around 1916. The names of donors that provided funding for the statue are carved in the sidewalk leading to the memorial. The town Blacksmith, General Merchandise, Butcher, etc...

I still get a sense of the town that existed before time imposed its will. I've found coins from as far back as the 1890's and I swear sometimes I can feel the spirit of the previous holders. I've spent time matching the names from the sidewalk with gravestones in the town cemetery and I wonder if they would be saddened by the current state of things?

Oh well, guess I'm getting a bit deep.

 

For my kids I've managed to collect coins from various years / designs going back to the late 1700s. But the pre 1800 coins the prices skyrocket. But just reading about the history of those coins is fascinating. I still plan on getting some colonial coins sooner or later if the price is right, but I like well detailed coins of which the prices are way too high.

Scattered around where I live are some very old cemeteries with tombstones going back to the 1700s. It's interesting in a way. Then seeing old photos of the area too, even knowing all the changes in the past 40+ years from my own recollection. there's a few statues/blocks referencing the Civil War too and it's neat having some coinage from the Civil War.

 

Neither...but what is your definition of "the long haul"? I would NOT recommend any PM's as an investment device. If you must, I would suggest buying higher grade Walkers in MS65 and above. Best of luck in your endeavors.

 

I'm of the same mind concerning colonial coins. Visited New England one year and searched various coin shops for something approaching the time line of the area founding. Wow! Pricey!! When I could even find anything on display.

Funny thing about the civil war statue in this particular park is similar ones can be found over a large swath of Iowa. I think I read they were part of a patriotic drive by those wanting to get America involved in WW1? Don't know if that is true but I've heard similar about that being the reasoning behind the change in American coinage in 1916.

 

Hi clawcoins,

I think both silver and gold are good to own and believe everyone should have a core holding of 3-7% as an investment. More than that is speculation but that is fine so long as you realize that you're in the casino.

As for silver v gold, I've always preferred silver because of the much great profit potential. Silver is where the leverage is and for that matter the insane leverage is with silver junior minors but more on that later.

Back in the late 70's, gold ran up from around $300 to $850 and silver to $4.50 $50 (1 to 17 ratio). During the Big Bonanza from ~2002 to 2011 gold went up 6-7 fold while silver went from ~$5 to $46 or 9 fold.

The metric that applies to a greater or lesser degree is the gold/silver ratio. Historically, it's been around 15-20 to 1 silver to gold. Right now it's 68 to 1. In the grand scheme of things, some folks use this measure to determine their mix of gold to silver holdings (e.g. owning 68 ASEs and 1 AGE) and rebalancing as the g/s ratio dictates. This seems overly complicated so I just overweight silver.

Now if you want to get crazy, check out the junior silver miners.

http://www.kitcosilver.com/equities.html

Note how some of theses stocks were off double digits today alone. This is true nosebleed stuff but the money . . .

I've been collecting coins for 60 years and paid for my degree with GI bill and profits from selling silver during the late 70's that I had stashed away at face value. Being in the hobby I noticed silver and gold starting to move in late 2001/2002 and started scaling in via my retirement accounts. A tube of ASE's was $90 including S&H and a tube of AGE's was $7300. I bought Silver Wheaton between $2.00 and 3.00 and before the Big Bonanza was over it had gone to $43. It was my only 'home run' in stocks but very, very sweet.

BTW, this past late winter there was another mini rally in silver juniors and and I rode Sivlercorp, Endeavor and First Majestic for a few months. Here's the past year in the former http://bigcharts.marketwatch.com/ad...&lf=1&lf2=0&lf3=0&height=0&width=0&mocktick=1

Getting in around $.50 leaves some serious room to grow and that's what I mean about leverage.

happy hunting,

peace,


rono