Jump to content

Buying Physical


Recommended Posts

Please pardon if this is not the correct place to post such a question.....

 

I'm getting ready to buy some physical gold and silver. I've looked at various products and found that the price varies quite a bit.

 

South African Kruggerand - $928.75

Canadian Maple - $942.15

US Eagle - $955.25

1 oz. bar - $925.35

10 oz bar - $926.40 per ounce.

 

The South African Kruggerand appears to be the cheapest, by far, compared to all the country coins. And the 1oz bar the cheapest gold.

 

My question is, are all of these different forms equally liquid? When I go to sell, maybe 5 years from now, will I have any trouble with the Kruggerand or bars? I suspect the answer is no, but then I don't get why the big price difference.

 

Anyone care to plug their favorite dealer in the US? I'm looking at Apmex now.

 

 

Link to comment
Share on other sites

I would caution you that it is hard to secure physical bullion. It is surprisingly difficult to devise really secure places to store it once we are taking about tens of thousands of dollars value. So to start with I would ask yourself carefully whether you really need to get a lot of physical. Sites like Bullion Vault and Goldmoney offer a far cheaper and safer means of owning and trading gold. I can foresee no realistic scenario in which these companies would not be safer than physical bullion. Bear in mind that although bullion is safe provided it is unsuspected, once your cover is "blown" for some reason, you will suddenly find you have nowhere to hide.

 

However, if you decide to go ahead and get bullion then Krugers, US Eagles and UK Sovereigns are, so far as I am aware, the most readily traded forms of bullion. Bars may offer a lower phyical premium, but may be harder to sell, due to the lack of standardisation and the greater chance of skimming them in some way.

Link to comment
Share on other sites

Thanks for making those pointers. My concern with sites like goldmoney and bullionvault is with liquidity. Ok, they have 100K customers so it would seem there's always going to be a buyer and a seller offering close to spot. But my thinking is most of their customers are the buy and hold type. The biggest run-up in gold is going to be at the very end of its bull market, maybe in the last year. How many of these 100K customers are going to be buying gold then? Lots of sellers for sure. The masses are going to be buying gold then...will they be joining bullionvault? Does this kind of thinking make sense?

 

I would caution you that it is hard to secure physical bullion. It is surprisingly difficult to devise really secure places to store it once we are taking about tens of thousands of dollars value. So to start with I would ask yourself carefully whether you really need to get a lot of physical. Sites like Bullion Vault and Goldmoney offer a far cheaper and safer means of owning and trading gold. I can foresee no realistic scenario in which these companies would not be safer than physical bullion. Bear in mind that although bullion is safe provided it is unsuspected, once your cover is "blown" for some reason, you will suddenly find you have nowhere to hide.

 

However, if you decide to go ahead and get bullion then Krugers, US Eagles and UK Sovereigns are, so far as I am aware, the most readily traded forms of bullion. Bars may offer a lower phyical premium, but may be harder to sell, due to the lack of standardisation and the greater chance of skimming them in some way.

 

Link to comment
Share on other sites

Hi wednesday2,

This has been discussed quite recently. It's a pity I can't instantly point to the posts :(

 

I think it's fair to say that the conclusion was that it is not a significant problem.

 

Basically, if you own gold/silver with BV/GM, and wish to sell, and no one with an account is willing to buy, they will sell gold in the open market.

You may not be able to get a sell price at the time of your transaction, and will have to wait for the spot price at the start of the following day.

 

There are quite detailed descriptions on both sites, but that's the rough summary.

 

Link to comment
Share on other sites

Hi,

I've done a few searches. It's not easy to find them. I've found one.

 

I've created a new thread just on that topic so I can keep track of them in future :D

 

It's here:

 

Are Bullion Vault & Gold Money Safe ?, Your questions answered - or an attempt anyway !

http://www.greenenergyinvestors.com/index.php?showtopic=3480

 

 

I'm sure there is more somewhere else :(

Probably on an older gold thread :blink:

Link to comment
Share on other sites

Hi wednesday2,

 

If you buy physical in the UK you'll generally pay an obscene (in my view) premium. It depends how bad you think things are going to get and whether there will be gold confiscation? I personally don't think that is on the cards but if you want to buy protection there are a number of reputable bullion dealers in London that will sell you bars, coins, etc. Pay in cash, no questions asked.

 

 

Link to comment
Share on other sites

It's not that I'm expecting a doomsday scenerio, but there is third party risk of some sort for anything but physical (although physical has it's own special risks, I know). The ETFs are regulated, thus subject to regulation changes. There's legislation on the table right now that would ban institutional investors from investing in commodities, futures or etfs. What's next?

 

Hi wednesday2,

 

If you buy physical in the UK you'll generally pay an obscene (in my view) premium. It depends how bad you think things are going to get and whether there will be gold confiscation? I personally don't think that is on the cards but if you want to buy protection there are a number of reputable bullion dealers in London that will sell you bars, coins, etc. Pay in cash, no questions asked.

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...