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<p>[QUOTE="Market Harmony, post: 865154, member: 20154"]Your question isn't too specific and the answer would change with the size of your speculative investment.</p><p><br /></p><p>- Are you considering $1 million+ investment, 100K-$1 million, or less than $100K?</p><p>- Do you really want to take physical possession of silver?</p><p>- Is your ideal situation to average into and out of a position or to move everything all at once?</p><p><br /></p><p>You note the historical average price ratio of gold:silver, so it seems that your theory is that the ratio will revert back to that mean. If that is the case, and this ratio will determine your entry and exit of the trade, then why would you even worry about physical possession? What I mean is that there are other ways to trade that gold:silver price ratio. You can trade this in the stock market by selling short the gold ETF's of GLD (or its double of UGL), while at the same time buying the silver ETF of SLV (or its double of AGQ). By shorting gold and buying silver you are effectively speculating on the ratio returning to the mean.</p><p><br /></p><p>I'm curious as to what "discounts and assay costs" you are talking about? Individual investors will pay spot or better. Few, if any dealers will buy at spot unless they have a buyer already set up at a premium and they only act as the broker. A good dealer will buy at spot minus 5%. Assay costs should only come into play if you are dealing with precious metal containing scrap. In this case, the scrap must be homogenized and then assayed. But, you don't buy scrap as an investment.</p><p><br /></p><p>You pay a premium for brand names. That premium is not usually recognized when you are selling to dealers. If you are selling to an individual, then you might be able to get a premium for brand names. Buy and sell as close to spot as you can. And if something sounds or looks too good to be true, then 99.9% of the time, it is. Pass on it, there is plenty of silver out there <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie2" alt=";)" unselectable="on" unselectable="on" />[/QUOTE]</p><p><br /></p>
[QUOTE="Market Harmony, post: 865154, member: 20154"]Your question isn't too specific and the answer would change with the size of your speculative investment. - Are you considering $1 million+ investment, 100K-$1 million, or less than $100K? - Do you really want to take physical possession of silver? - Is your ideal situation to average into and out of a position or to move everything all at once? You note the historical average price ratio of gold:silver, so it seems that your theory is that the ratio will revert back to that mean. If that is the case, and this ratio will determine your entry and exit of the trade, then why would you even worry about physical possession? What I mean is that there are other ways to trade that gold:silver price ratio. You can trade this in the stock market by selling short the gold ETF's of GLD (or its double of UGL), while at the same time buying the silver ETF of SLV (or its double of AGQ). By shorting gold and buying silver you are effectively speculating on the ratio returning to the mean. I'm curious as to what "discounts and assay costs" you are talking about? Individual investors will pay spot or better. Few, if any dealers will buy at spot unless they have a buyer already set up at a premium and they only act as the broker. A good dealer will buy at spot minus 5%. Assay costs should only come into play if you are dealing with precious metal containing scrap. In this case, the scrap must be homogenized and then assayed. But, you don't buy scrap as an investment. You pay a premium for brand names. That premium is not usually recognized when you are selling to dealers. If you are selling to an individual, then you might be able to get a premium for brand names. Buy and sell as close to spot as you can. And if something sounds or looks too good to be true, then 99.9% of the time, it is. Pass on it, there is plenty of silver out there ;)[/QUOTE]
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