Good article. Buying silver or gold for the purpose of making money (not collecting) is speculating. Not investing! I buy silver betting that the spot price of silver will rise in the near future so I can sell it back (sometimes to the same dealer I bought it from) at a higher price, thus making a profit. It took about 5 years for the price to go from $5 to $8. Which isn't too bad. But if I had my money stuck in silver for 10 or more years waiting for the price to rise a couple of bucks, then I would have made a bad bet! I could have had my money working for me for all those years (say, in the stock market) instead of sitting in my closet collecting dust. That's one of the risk in speculating: as soon as you take pocession of the silver or gold, the clock is running against you! When your money is just sitting around, you loose because of a little thing called inflation which slowly but surely robs your money of its value unless it's working for you.
I guess I see it somewhat differently. If I was to buy gold, I would most likely not sell it at the first sign of an increase, or a decrease for that matter. I am looking long term. Since I have a long time before retirement, I would be hoping the price of gold would continue to climb over the years....even if there were bumps along the way.
Well I guess all investments are better over the long term. Gold is at a 15 year high. All of the metals for that fact have been increasing over the past 12 months. I can't see them continuing to increase steadily for years to come though. Now it may be safer to have some gold on hand. A lot of people are expecting the precious metals to end up at 10 500 1000. That is silver, gold, and platinum. Who really knows. That is why I always suggest that you collect for collecting sake. Leave the investing to Wall Street.
I think this is a good topic. Gold and silver should not be held for long term "investment". The price of gold or silver could stay right where it is for the next 400 yrs. It is not like the stock market which over time goes up as the US economy grows. I do think silver will see $10 or $11 or more! oz in the near future. (In fact I'm betting on it right now by holding a few hundred oz of the stuff.) But that is my "speculation". It could go to $10 or could go to $20. It could also drop to $4 and stay there for many, many years. Right now (meaning in the last 25yrs) there has been a lot of movement in the spot price of metals. This is a great time to buy low and sell high, buy low and sell high; over and over again. But it would be a mistake to think that at the point one wants to retire, gold is going to be "high". There is no way to predict the price over the long term. Investing in the stock market over many years is a much safer way to prepare for retirement.
If you want Bars, keep your eye on Ebay.......Ive managed a steal one or two on there late nate when an auction ends. As for selling.........theres a site .....Kitco.com......that will buy your Gold, Platinum or silver boullion coins or bars at just about melt. The trick with metals is to buy with the intention of holding until the market in in your favor..........Dont buy boullion in hopes of making a quick buck........well, altho those 100 oz Bars of silver i bought last year at $5 an oz are worth a hell of a lot more now. But generally coins with some collector value will maintain that value moreso than the metals market. Right now I wouldnt mess with buying any metals the price is up on everything and you could very well have to sit on any you buy now for a very long time. Id wait for Gold to get close to $350 or lower, then invest in a stack of Gold Eagles............ Another route is platinum eagles. Platinum is pretty volatile and its kinda cool to watch the daily market value of my Plat. Eagles. Again, keep in mind the KITCO.COM site for selling.........if you buy at a decent price you can turn a buck . I bought a few Platinum eagles a while back just above melt and Kitco will now pay me about 20% more at their buy price than what i paid for them like less than 90 days ago........ Also.......if youre doing the boullion thing, do some research about what causes the prices to fluctuate.........learn to watch for precipitators to price increases and drops. The metals market is really pretty fun......Ive gained much more than ive lost playing around with it.
I agree with you Will 100%! I wouldn't buy any metal at the moment. Prices are just too high. $350 is a good buy price for gold. The platinum market is nuts! Have watched the price shoot up and down several times. There is lots of oportunity to make some money. I understand the reason for such volatility is that Russia has a monopoly on platinum and they like to keep the stuff off the market thus driving the price up.
Yeah, I think that I will wait a bit on the gold. I really wish I would have thought about this when it was under $300. Maybe I will take a look at silver. I think I will end up getting hooked on this, and not necessarily for investment purposes.
I too made a mistake not buying more gold when it was around $300. I've been focused on silver the last few years. I don't expect metal prices to remain high for long. (Recent history suggest that these price spikes only last for a few months before returning back to earth.) But there is no way to know what will happen with the price.
Silver closed at $8.01 today. I don't see it ever falling back to under $5 again. Maybe I am just optimistic.
Has anyone else here actually sold stuff to Kitco? I use them for spots, even though their numbers vary from what some major dealers use...but their buy prices don't seem that great...just ok. I sold platinum today to another dealer at $9 per oz over their buy price and didn't have to ship/ins it. The moral here is shop around locally. Sometimes dealers have orders to fill and can pay a little extra, rather than buying it long distance. A friend of mine used to sell them scrap gold but said they took a long time to pay. I'd be interested in hearing about your experience with Kitco. Nick
Kitco has great website. But I agree that their buy/sell are not impressive. Never did business with them. It took me a while to find a coin dealer who I felt comfortable doing bullion business with. The one I eventually found posts their buy/sell price over the counter! And they check the market price on the computer right before money changes hands to get the most accurate spot price. I go there in person so there are no shipping costs. The one problem I have is that when I sell to them, they charge me tax and cut me a check (instead of cash). But I assume they have to do this by law.
Some states charge sales tax on coins and/or bullion. Florida used to but a few hard working people got that cursed law repealed, thank goodness. I've never heard of charging tax when a dealer BUYS something, though. As far as checks vs cash...I normally write checks myself. With all the gold/silver/bullion/coins etc etc that I buy and sell the last thing I want is a reputation as the guy who carries a lot of cash lol. My bank is just down the street...my customers can cash all checks there.
Update: I just checked my receipt from the last time I sold my dealer silver. I was mistaken: he didn't charge me tax. (Not sure why I thought otherwise?)
Hey Scooby, I've been buying gold for years. Stay away from the bars. Anyone who is thinking about buying bars is better off buying the gold as 24 caret bracelet, ring, etc. The coins are cool and I would recommend that you look at the American eagle for the international acceptance as well as the South African Krug. If you looking at cost margin, factor in shipping and insurance vs buying from someone in town. Note, I'm sure your Russian coin is the real deal but beware that alot of fakes come out of Russia in regards to coins, art etc. I remember an ex -KGB officer offering me access to buy fake gold painted icons in Moscow for a good price in the early 80's. The gold paint was real and the wood was dated correctly but... beware. Also beware that the gold market could sink like silver did with the Hunts way back. If South Africa or Nambia ever released thier reserves, forget about it. Have fun and remember with the blink of the eye, everything could change inregards to everything.
What other gold coins do you like besides Eagles and Krugs for bullion purchases? Anything older? From Europe?
As far as taxes go on sales, most states charge a tax on sales up to $1000. After that, it is considered numismatic in nature. No sales tax. On selling, I am not sure. Delaware has no sales tax.
Ouch! Silver just crashed through $7.60. Well, it was fun while it lasted. Yea, the guy I buy from doesn't charge me tax if I pay in cash and don't ask for a receipt. When I sell, he cuts me a check and writes down my Drivers Lisense.
I've been reading a bit about when our money was backed by gold. Anyone know why they opted to stop that? I think after they stopped, everything went downhill. Inflation went up and will continue to do so. The reason why a house in 1940 cost $15,000 and that same house today would go for over $200,000. I have decided that I will start buying (when the time is right) Eagles mainly, but I do like the Maple Leaves.
I'm only going to attempt to answer this in a simplified way if EVERYBODY promises not to start a big bar-room brawl about it Try to picture what was going on in the US in 1933 - banks were failing & closing on a daily basis. The little guys were losing their life savings. We were in the midst of the worst depression the country had ever experienced. Virtual collapse of the monetary system was imminent. And to make matters worse - some governments and very wealthy people outside the USA were attempting to manipulate the gold market and cause the price to rise significantly. And it was rising. Now at the time banks had their reserves in the form of gold as was required. But banks were going broke because everyone was withdrawing their money. This made them have to draw on their reserves and they could not afford to buy more gold at higher prices to replace those reserves. The US Govt. itself was slowing going broke for the same reasons. And because everybody knew this - gold was being hoarded. And when gold is hoarded the price rises even faster. This was only making things worse. So the only thing they ( the govt. ) could do was to take the US off the gold standard and declare gold illegal to own. In a nutshell - it was so serious that if this had not been done - the USA may not have survived. But there is another reason also and back then it was just coming into play. There is only so much gold & silver in the world. And when a country's currency is backed by gold & silver they have to have a dollars worth of the metals for every paper dollar they print. Prior to 1933 this was never a problem. But as the population of the world began to grow the need for more and more currency to be printed was growing just as fast. And sooner or later it had to outpace the production of gold & silver. There just wasn't enough of it anymore. In 1933, it was enough for the time being to take the country off the gold standard. And every country in the world soon followed because they were having the same problems we were. And so silver replaced gold as the monetary standard. But then by the early 1960's governements of the world began to realize there wasn't enough silver anymore either. And to remain on the silver standard would have pushed the price of silver to exorbitant levels. Now silver isn't just used for money - it has many commercial uses as well. And for the price to escalate that much and that fast would have had disasterous results in other areas of the world's economy. So it was decided that the silver standard had to go as well. Today - there is no where near enough gold & silver on the entire planet to back the currency of every nation in the world. Enough of it just doesn't exist. Now some people will say that is so much hogwash - but it isn't. All you need is a calculator and a few facts and figures and you can figure it out yourself. And when it comes right down to it - it doesn't even matter. Currency does not have to be backed by anything except the people's willingness to accept it in order for it to work. We could use bright pink rocks as money if the guy at the grocercy store and the gas station was willing to accept them as payment. That's all that's required - people just have to be willing to accept whatever form it takes. That makes it money.
