opinions on selling gold bullion now

The situation is this... back in 1999-2000 I bought six ounces of gold bullion
(5 maple leafs, 1 AGE) paying an average price of $270-$280 per one ounce coin. In case you guys haven’t noticed, gold has gone up another $20 or so in just the last 4-5 day's. As of today it's 464.50 per ounce with maple leafs selling at 481.50 and 482.50 for AGEs.
I am considering three options with the gold.
1.sell it, make roughly a $1200.00 profit and reinvest that into coins and collectable currency.
2.sell and use the money for some long overdue car repairs
3.hold on to it for another 5 years.
I think we could easily see it hit $500/oz relatively soon
What to do

 

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You pays you money and you takes you choice.

If there are any licensed investment advisers on this forum, I don't know who they are, but the bottom line is that absolutely no one knows what tomorrow will bring.

Maybe tomorrow someone will disclose their discovery of a new gold mine where boulder size 24 karet nuggets are lying on the surface. If so, the price of gold will drop considerably, and unless you sell today you will forever regret it.

On the other hand, maybe some catatstrophe will occur tomorrow, making the "Great Depression" of the 1930s seem like the good old days. If so, the price of gold will zoom, and unless you have held on to all that you now have, you will forever regret it.

More likely than either scenario, gold will follow its historical pattern of going up and down, over and over again, and any one of your three suggested courses of action would be appropriate.

If there is anyone who has absolute knowledge of what gold will be selling for in U.S. dollars at any time in the future, he/she must be a time traveler, and will be too smart to spill the beans.

 

I definitely buy coins to enjoy and hold for many years
But these are modern issue bullion coins and I don't have the same attachment
To them that I do to ...say my Morgan of proof set collections.
Having said that. The gold maple leafs are beautiful coins and I am more than likely going to hang on to them for now.

 

Another thing to consider is that regarding your option #1, any coin or group of coins that you buy now have probably also increased in price too, so you will end up with the same group of coins for the same dollar outlay now that you would have had if you originally purchased them in 1999. So you may have a dollar profit, but not a profit in the quantity/quality of coins owned if you make the swap.

I would also be cautious about getting locked into the idea that coin prices are cyclical, and that whatever goes up must come down. This has been the case for the past 20-25 years, but over a longer period of time the price trend has been one way -- up. In the 1960's uncirculated morgan dollars were less than $2. In the early 1970's, gold was $35 per ounce. I don't expect to revisit those prices. A lot depends on where you are in time.

 

I had a bunch of stock i recently sold, i purchased at 8 and the price went up to 16. I couldn't apss up selling it, sold at 15.50 ( on a downturn )

after i sold the stock shot up ( doh! ) then it went down... bottom line, when you make up your mind to sell do not regret it, it will eat you from the inside ( if i only kept it i would have 2 grand more! )

honestly, if i wher in your position, I would sell the gold and turn it into platinum. i feel that platinum is under valued right now, but thats me.

 

I consider this a plus for coins. They preserve the purchasing power of the money that went into the collection to begin with.

 

Good point!
Try it out with this calculator of costs:Your in for a surprise!
http://www.westegg.com/inflation/

(edit) just tried it out and the .17 cents would be $1.08 today. or so it says

 

All valid points-thanks for the feedback....I didn't know gold was only $35/oz in the 70's...i know it hit $800 in the late 70's.

 

I'd say wait till it hits $500/oz

 

Way back in the "old" days, the Federal Government placed a price of $35 on an ounce of gold. Then on March 15 of 1968 they removed the cap and let gold float in price. On Jan. 21 of 1980 (I think they did this for my birthday)the price of gold hit an all time high of $870 at the end of the day. It had been up to $892.10 earlier but couldn't hold the price.
A word of advice: Don't hold your breath for this to happen any time soon.

 

I wouldn't bet against it either. Other than gold and silver, there are very few things that cost the same now as they did during the 1970s. The $800 price for gold and $50 for silver was obviously outrageously high, but current prices still seem low to me.

 

One very important point to keep in mind when buying Gold as an investment or return is that Gold is a commodity and ALL commodities are cyclical.

Ask yourself a question..Did you buy the coins or the gold?
That answer should answer your question whether to sell

 

I disagree about gold being a commodity, at least in the normal sense of the term. Most of the gold ever mined since the beginning of civilization is sitting in central bank vaults around the world or has been fabricated into jewelry. A very tiny percentage is actually consumed. Regarding it being cyclical, it's tough to prove whether the price of gold is fluctuating or the value of the dollar used to purchase it. Unlike commodities, the decrease in the marginal utility of gold is very close to zero. This, combined with the unique physical properties, has made gold the most popular form of money in history, except for the last 70 years.

Of course, none of that gets you any closer to a sell or hold decision on the coins. I would hold them, but it's more of a personal choice than something that can be demonstrated as fact.

 

For what it is worth..here is how I play that game...sell enough to recover your initial investment..then keep the remaining coins at no cost to you and whamo! Freebies..thats the best gold out there!

RickieB

 

I was also thinking about $500/0z as a good time to sell.
Did you guys see where it was up another $7.50 today?
Silver was also up $.14c.
I believe this recent increase is likely do to the Katrina/New Orleans situation
and all the bad news from Iraq

 

You could be right about where the gold is now, but I guess I disagree about the "consumption" angle. People don't eat gold. They use it, and most of it gets recycled at some point. Much of that gold in government vaults was once ancient gold coins, Medeival gold trinkets, or Depression era Double Eagles that FDR recalled in 1933.

 

As for the investment, I have been wanting to buy gold, but when I saw it at a 17 year high, I said "no way". If I owned it (as an investment) I would sell now.

In your case, I would not "blow" it on car repairs - do that with current income. You've had that money for 5 years - would be too bad to lose it on a repair that will amount to nothing once the car is gone for good.

Just my opinion.