What to buy? Gold or Silver?

Hey all:

For my next purchase I'm considering either an ounce and 1/2 of gold - probably pre-1933 or 100oz silver bar. Leaning toward the silver considering the possible upside. Considering only future value what is everyones opinion? Thx.

 

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Silver, but 10-10oz. bars would be my preference.

Steve

 

Howdy,

Both wise choices. I firmly believe in owning both metals and it sounds like you agree. Now you just have to decide the percentage of each you want to own and that should tell your what to buy. Ah, but how to determine the percentage.

I've long watched the gold/silver ratio as a guide for my investing in precious metals. Historically, the gold/silver ratio was ~1/17. Presently, it's 1/81. Now before certain posters naysay this metric and that it only existed when the price of gold was fixed, think back to the earlier peak in 1980 of silver around $50 and gold around $850 (1/17). Even the latest bull run that peaked in 2011 resulted in ~$45 and ~$1850 (1/41).

All this tells me, however, is simply overweight my purchasing of silver relative to that of gold.

Also, as an aside, I always noted much more leverage in silver rather than gold. Back on the 70's, gold tripled, while silver went up tenfold. This time gold went up 5x while silver when up 10x.

And for those who are really and truly nuts, the crazy leverage is with the junior miners, particularly junior silver miners.

peace,

rono

 

I'm buying mostly silver , I like 5 -10 oz bars , ASEs and US 90% . Though I do plan on buying 5 to 10 oz. of gold in Coin form as it's always nice to have both .

 

I'd go for silver, unless you have lots of silver already.

I have more silver than I could carry in a backpack in the event the S ever does HTF, so I'd like to buy more gold. I just can't bring myself to do it when the GSR is at 80.6. So the way I look at it, I'm adding weight to my safe to make it even more unwieldy if someone does manage to cut the bolts that secure it to the floor and the walls.

Someday, when the GSR falls, I'll essentially trade silver for gold. Someday...

 

I have a nice amount of silver already. Just bought a Canadian gold maple off Fleabay for a steel $1205. Think I'm going to stick with gold for now and maybe throw in a few 10oz silver bars.

 

Are there any more available at that price?

 

You can trade gold or silver through exchange traded funds. Call your broker to buy them and call your broker to sell them, just like stocks.

 

The best thing you can do is maximize the value for dollar you are spending. If it continues to go up, you did well - and if it goes down, you can buy more and lower your dollar cost average as a hedge.

Unloading a silver bar that size may prove to be limiting. ASE's you can sell at a good premium to protect your investment. You have a limited market for a large bar. You will of course minimize the premium per ounce - and that's a good thing if you have a buyer's market.

 

Howdy,

As for paper investing in pm's, the bullion ETF's are taxed at 28% whereas a mutual fund is taxed long term at 15%. Alas there are not many mutual funds that hold bullion - mostly mining stocks. Exception is Central Fund of Canada CEF which holds both gold and silver bullion at about a 55/45 ratio and is taxed normally. Do your tax research if you're going to try for paper bullion in a taxable account. Much better to play in your 401(k) or IRA. With ETF's you can slice and dice most any way but where I find the most action is with the junior miners. There are ETF's for both gold and silver GDXJ and SILJ. I still prefer individual stocks you can find at the kitco websites. Right now I have a momentum plan in the juniors mostly with SVM but also some AG, ASM and EXK.

and so it goes,

peace,

rono

 

Got lucky

http://www.ebay.com/itm/272170911001?_trksid=p2057872.m2749.l2649&ssPageName=STRK:MEBIDX:IT

 

I had never bought silver or gold bullion until January of this year. I was in the same boat where my budget was around 100oz of silver or one ounce of gold. I posted my situation on another website and the overwhelming majority suggested I buy the silver because of the potential upswing being greater. I purchased 4 10oz silver bars and 60oz in silver rounds. I am happy with what I bought. I agree with those that said it is wiser to buy 10 10oz silver bars rather than 1 100oz silver bar. The reason being that a 100oz silver bar is a bigger target for counterfeiters. Because of this it is harder to liquidate your 100oz bar if you want to.

 

Great post!

 

So you are spending about $1,600 give-or-take...you can buy a decent Saint or Liberty for that amount, but not sure about the remainder 1/2 ounce.

 

Running numbers again this morning. This is GLD (Gold ETF) vs S&P 500 for a 10 year run.

Anyone still think stocks are always king? (Anyone seen Kurt lately? )

Gold (red line actually shows substantial long term gains over S&P 500 over 10 years.

 

Gold is a speculation, stocks are investments. Gold does not pay dividends or interest which means you have to rely 100% on price appreciation. Over time, stocks' total return comes 40-50% from dividends alone.

As you are no doubt aware....you can arbitrarily or accidentally or just choose a starting/ending period that happens to show 1 asset outperforming another. A comparison over a longer period of time using ROLLING 10-YEAR PERIODS would show stocks outperforming gold most of the time.

I hold gold and PMs for numismatic and artistic enjoyment, and a hedge against catastrophe. I don't invest for catastrophes.

 

All true however the best play is to stay diversified. My PM and rare coins are more a hobby than anything. PMs will do well in a negative interest rate scenario such as what's occurring in the EU and Japan and may occur in the US. It also does well in both a deflationary and inflationary periods.

 

So far precious metals have not done that well in a negative rate environment. Deflation is not good for metal prices.

You need inflation...currency instability...and maybe economic turmoil to get gold flying. It can move higher on lack of CB sales and retail/Chinese/Indian buying but so far gold has struggled.

The run-up from 2002-2011 was after a 20-year bear market. Prices were down 63% from the 1980 high and even more in inflation-adjusted terms.

I never try to predict gold prices.

 

I do. Of course I'm only human, so don't expect miracles