What Should I Know About Buying Gold & Silver

[freshprince1]

Hope this is the proper spot for this thread.

I'd like to start buying Gold & Silver every so often. I'm a newbie to it, so I'd like to hear any advice, tips or warnings from your experience!

- Where are some good local places to buy?
- Best spots to store it? (i.e. Safety Deposit boxes at banks?, home safes?)
- Are there better times of the year to purchase?
- Are certain countries' gold coins better than others (i.e. US vs. CAN?)
- Is this even a good idea?

Thanks in advance!

[sputnik]

Originally posted by freshprince1
Is this even a good idea?

How about some advice from Warren Buffett.


“When we took over Berkshire, it was selling at $15 a share and gold was selling at $20 an ounce. Gold is now $1600 and Berkshire is $120,000. Or you can take a broader example. If you buy an ounce of gold today and you hold it at hundred years, you can go to it every day and you could coo to it and fondle it and a hundred years from now, you’ll have one ounce of gold and it won’t have done anything for you in between. You buy 100 acres of farm land and it will produce for you every year. You can buy more farmland, and all kinds of things, and you still have 100 acres of farmland at the end of 100 years. You could you buy the Dow Jones Industrial Average for 66 at the start of 1900. Gold was then $20. At the end of the century, it was 11,400, and you would also have gotten dividends for a hundred years. So a decent productive asset will kill an unproductive asset.

“Why do you think gold bugs get so irate?"

Because they really do come out. If you go on CNBC and say that bonds are kind of a poor investment, people don’t get mad at you. You don’t hear from the Treasury. You can knock almost any investment and nothing happens. But when you talk about gold it’s different. Of course that says something about their motivation for ownership. They want people to agree with them. They want everybody to get so scared they run to a cave with gold. Caves might be a better investment than gold. At least they’re not producing more caves all the time. So they want people to be as afraid as they are.

Incidentally, they’re right to be afraid of paper money. Their basic premise that paper money around the world is going to be worth less and less over time is absolutely correct. They have the correct basic premise. They should run from paper money. But where they run to is the mistake.”

[chibwack]

Don't bother with gold, its pretty sure and cool to have, but that's about it. In the long run, you'll make a whole lot more money throwing your spare change into a decent index ETF

[Rarasaurus]

The world has just gone through a very bad recession. This fear drives gold prices up. If you think the world is screwed and our financial systems will fail then maybe its a good plan. If you think we will come out this as we have for the past 200 years then gold will decline.

Buy low sell high. Gold was a good buy in 2007 right before the crash.

[dj_rice]

One of my co-workers is a conspiracy theorist, and a little bit looney, hes been stock piling silver in his house for awhile now its kinda crazy. He's even getting into the copper craze as hes a mechanic so hes been stripping wiring harness of all the copper he can find. :nut:

[msommers]

Given the increasing demand of gold from our most populated nations (India and China), recession or boom, it only makes sense that gold prices will go up. It's simple supply and demand. Even just using India as the "customer", gold will NEVER go away when a material item is literally engrained in the entire population.

That said, I'm looking at Lithium companies.

[mac_82]

I go to Albern or Canadian Gold and Silver just off Centre St and 16th ave.

Over and above what I put into RRSPs, TFSAs, etc, I usually will buy at least 1-2 oz of Silver every paycheck. Some coins will have a higher price for "collectability". I just stick to simple 1 oz bars or coins, nothing fancy.

[OU812]

Originally posted by mac_82
I go to Albern or Canadian Gold and Silver just off Centre St and 16th ave.

Over and above what I put into RRSPs, TFSAs, etc, I usually will buy at least 1-2 oz of Silver every paycheck. Some coins will have a higher price for "collectability". I just stick to simple 1 oz bars or coins, nothing fancy.

Ditto.....stick to Silver Canadian Maples......only .9999 coins in world (so I have heard), can sell them anywhere. I dont know that it will make a crazy return but it is good to diversify and it's nice to be able to touch your "investment"

[whiskas]

Buying blocks of nickel is where its at.

[Sugarphreak]

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[4DoorGTZ]

Depending on your investment size and timeframe try to buy as large of a piece or as many as you can. Albern for instance has different pricing depending on how many you buy. You're always going to pay the most per oz if you just buy 1 or 2. If you're looking at buying a lot (100 or so) look into a larger bar the per oz markup is less.

[sputnik]

Something to consider.

Gold jumped to $800/oz in the early 1980s due to an economic collapse/panic. Following that, the price crashed and hovered around $250-300/oz for about 25 years.

Then there was a panic in 2008 which ultimately drove the price up to around $1700/oz.

Now if you bought at the peak in the 80s and sold that gold today. Would you consider it a good long term investment?

I am not sure I would consider a 3% year over year return to be that great.

The question you have to ask now is... are we just sitting at another peak and headed to a serious drop in gold prices?

Even with the growing demand for gold in India, China and Japan in the 80s and 90s (during the tech boom particularily) its not like it affected global gold prices enough to see much of a rise.

[Frankie88]

One another option is to try ETF. I was trading ETF like HGU.to since years ago, as long as you have a brokerage account...easy and low cost to trade...

[ZenOps]

It would be crazy as a Canadian not to have a stockpile of nickel silver and gold.

We are only one of two nations that created significant amount of pure nickel coinage (IE: 1.9 billion nickels from 1922 to 1981, or $95 million for 31 million Canadians) That means $3 worth of pure nickel in nickels per capita in Canada, the other nation being France and the 1/2, 1 and 2 franc to 1999 (significantly less in pure nickel per capita)

Everyone else including the US and UK had to use a copper dilution of 75% or 91.7%. Many other "first world" nations use metals like aluminum. There is about 1,000x more aluminum on the surface of the earth, than nickel. The entire Euro zone of nearly a billion people uses about 3 grams of nickel for their €1 and €2 coin (about $1.30 and $2.60 respectively)

Just as one could say that gold was money in 1933, and silver was money in 1964. Nickel is most definitely money in 2012. It is without question, the perfect monetary metal at this point in time.

Canada allows RRSP contributions in physical gold and silver, the US does not allow any retirement savings to be put in as gold or silver.

Silver is ok, but it tarnishes like a biotch - especially in Alberta because of our high atmospheric sulphur content. .9999 silver in Calgary tarishes to an ugly brown faster than a 100 year old penny, Rofl.

Stack them pre-1981 beavers!

[ZenOps]

Originally posted by sputnik


How about some advice from Warren Buffett.



Well.

In order for a productive asset to produce, you do actually have to work 8 hours a day, 5 days a week.

So that piece of farmland does not make money or appreciate in value by itself. You must work the land or the company into a productive asset (not always an easy task) Buffet never factors in the actual work (because he does not have to work the land himself) If you do nothing with the land, you will actually get into debt extremely quickly because of taxes.

Just like a 100 million dollar mansion passed down to a child that can only make $2 million dollars a year, it can become an unsustainable non-producing asset very quickly. And when noone else is making money, noone will want that taxable piece of property.

And hence... Million dollar mansions are being abandoned left and right. Marginal farmland will absolutely be abandoned if fuel prices get too high, it does not matter if you work seven days a week if your government mandates free food.

Is a $120 million painting a better investment than farmable land or real estate? Arguably, hell yeah. What did that painting originally cost? $100 worth of Canvas, paint, a months worth of labour? Berkshire sucks compared to $100 to $120 million.

Is buying a 1933 gold double eagle for $20, which now sells for a million - a good investment? Absolutely, as long as you can find a buyer.

Blame Nixon.

[kdwebber]

Originally posted by ZenOps
Silver is ok, but it tarnishes like a biotch - especially in Alberta because of our high atmospheric sulphur content. .9999 silver in Calgary tarishes to an ugly brown faster than a 100 year old penny, Rofl.

Stack them pre-1981 beavers!

Silver won't tarnish in Calgary unless you leave it exposed to circulating air, ask me how I know.

As for buying...

http://www.nwtmint.com

[sputnik]

Originally posted by ZenOps
Is buying a 1933 gold double eagle for $20, which now sells for a million - a good investment? Absolutely, as long as you can find a buyer.

That's your advice?

Buy an uncirculated and illegally obtained coin and them sell it 80 years later?

Might as well buy a stolen Picasso from a Nazi war criminal while you are at it.

[ZenOps]

Originally posted by kdwebber


Silver won't tarnish in Calgary unless you leave it exposed to circulating air, ask me how I know.

As for buying...

http://www.nwtmint.com

Depends if you intend to always keep it airtite or actually use it as money. The true value of money is used as circulation (7 gram nickel loonie dollars for example)

If you are stacking silver in capsules and leaving it in a vault, its not really money. Then its just a means of preservation of wealth, which is fine if that is your only goal.

[ZenOps]

Originally posted by sputnik


That's your advice?

Buy an uncirculated and illegally obtained coin and them sell it 80 years later?

Might as well buy a stolen Picasso from a Nazi war criminal while you are at it.

Depends on which war. Many paintings during the Napoleonic war were saved from being torched by both sides. History is not so one-sided, both sides (winner and loser) tend to destroy things that everyone will regret later.

One can always grow more food, but there is only one Picasso. Just like there are only $3 worth of nickel nickels (sixty nickels) for every Canadian produced (and now since 2004, melted down to about $1.50 or so) I really don't think people realize how truely rare a pre-1981 pure nickel Canadian or French Franc coin is, pure copper coinage is ridiculously abundant on every corner of the earth by comparison, even in third world countries like the *cough* US.

As a side note: I made a mistake, the 1933 double eagle recently sold for $7.59 million at last auction, completely legally of course. Someone had the brain to save it from the US barbarian hordes and people like Nixon.

Its not the fault of the farmer who works hard, it the fault of the system that creates dollars out of thin air and is correlated to no or little acutal work in production. A smart farmer will always be paid in metal, pound for pound - copper for chicken.

[sputnik]

At the end of the day when you buy gold you don't end up with more gold. All you do is hope that someone wants to pay more than what you paid for it in the future.

The farmland scenario makes the most sense.

If you buy a $1 million plot of land and do nothing with it, all you can do is hope that it will be worth more in 20 years. This is what it is like to own gold.

If you farm that land for 20 years you can get a yearly income and still own the land 20 years later should you want to sell it. This is what it is like to own a blue chip company.

Now tell me why the first investment is better than the second.

[BigMass]

Gold is money, it’s not an investment. It’s a store of wealth. It’s better than the US Dollar which has lost %96 of its value over the past 100 years. Buffet comparing Gold to buying and working farmland is formulating a straw man fallacy. One thing you have to realize about Buffet is that he’s very smart but he’s one of the biggest government shills in existence and most of what he talks about publically is nothing more than propaganda to push an agenda.

[freshprince1]

Thanks for the opinions, guys. I have my other investments on the go, and have just been thinking about the gold and silver as something extra to do on the side.

[sputnik]

Originally posted by freshprince1
Thanks for the opinions, guys. I have my other investments on the go, and have just been thinking about the gold and silver as something extra to do on the side.

At the end of the day, buying gold is not an investment.

It is just somewhere to put your money instead of cash. Don't expect a huge return on the long term.

[Sugarphreak]

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[ZenOps]

http://research.stlouisfed.org/fred2/series/BASE/

That is the only chart you need to know to own physical assets (from gold to wine to art)

Everything you buy in US$ will cost more simply because they have tripled the monetary supply in the last three years. Its not that metals are going up in demand or value, its that the dollars are buying less because there are too many out there.

But we might get a severe deflation before a crushing inflation. Historically before it all falls apart, people have firesales so that they can afford loaves of bread - which is deflationary.

[kdwebber]

Originally posted by ZenOps


Depends if you intend to always keep it airtite or actually use it as money. The true value of money is used as circulation (7 gram nickel loonie dollars for example)

If you are stacking silver in capsules and leaving it in a vault, its not really money. Then its just a means of preservation of wealth, which is fine if that is your only goal.

Well you are not going to go buy milk with a 1/4 ounce piece of silver so I don't really see what you are getting at. Even if you do trade or purchase goods with silver in the future the majority of the time the silver will be spent in a safety deposit box.

[ZenOps]

Originally posted by kdwebber


Well you are not going to go buy milk with a 1/4 ounce piece of silver so I don't really see what you are getting at. Even if you do trade or purchase goods with silver in the future the majority of the time the silver will be spent in a safety deposit box.

This is exactly what is wrong with the banking system.

In 1933 you did go to the store and spend your gold dollar coins, in 1967 you absolutely did spend your silver dimes, quarters and dollar coins. In 2011 you absolutely did spend your nickel loonies and toonies. It kept the economy alive and flourishing.

The main point of having money with intrinsic value is to circulate it. The problem is - that the banking system is much more like Khadafi who hoards 144 tons of gold for himself and leaves not a single round for anyone else.

I'd love to be able take half a paycheque in pure pre-1981 nickels, but noone would be willing to part with it because its too scarce and too valuable. You would think it would be easier to get a $100 box of nickels from bank than three ounces of silver from a coinshop - but you might be surprised how Khadafi-like the banks are becoming (especially the US)

[kdwebber]

I agree I feel gouged every time I think about the fees I am charged in daily banking and asset transactions. However you are not forced to keep your wealth in the bank. Having your net worth in land and precious metal holdings is one way. You seem like a smart guy so I'm sure this isn't news to you but what is stopping you from taking half your pay cheque and converting it into a precious metal of your choice?

[ZenOps]

Originally posted by kdwebber
I agree I feel gouged every time I think about the fees I am charged in daily banking and asset transactions. However you are not forced to keep your wealth in the bank. Having your net worth in land and precious metal holdings is one way. You seem like a smart guy so I'm sure this isn't news to you but what is stopping you from taking half your pay cheque and converting it into a precious metal of your choice?

Haha. You have to walk the walk. The physical world is completely different from the paper world.

Even the largest bullion dealers like Albern have physical limits. If they are low on silver and/or gold, they usually enforce their $3,000 maximum per day purchase limits, or 2 gold ounces per day.

Most banks have a limit of $100 withdrawl of nickels per branch per - week. Many US banks are now charging up to 16 cents per roll for pennies to quarters for "transportation costs".

Say you wanted to buy 3 tonnes of nickels instead of one tonne of movable iron (a car) both around $30,000. If you can convince a local branch to sell you a $100 box of nickels every week, and you actually visited every week - it would take you six years to get them.

So acquiring certain metals is definitely more of an endurance sport than just a "Khadafi, I got $8 billion dollars - I'd like to buy 144 tons of gold please"

Likewise you can't just go to one place and say "I've got $95 million, I'd like to buy every nickel Canada ever produced"

[OU812]

When is your manifesto coming out Zen?

[ZenOps]

Haha, not until the US takes the nickel and copper content out of their nickels (its been 25% nickel and 75% copper for the last 146 years)

I sense it is close (and by close I mean within a few years, definitely within the decade)

Also of note, the last time I looked, Scotiamocatta has a limit on buying of $9,600 of metal per registered buyer per 24 hour period.

[kdwebber]

Originally posted by ZenOps


Haha. You have to walk the walk. The physical world is completely different from the paper world.

Even the largest bullion dealers like Albern have physical limits. If they are low on silver and/or gold, they usually enforce their $3,000 maximum per day purchase limits, or 2 gold ounces per day.



I have a hard time taking you seriously because you really don't know what you are talking about...

http://bullion.nwtmint.com/silver_panam.php

[4DoorGTZ]

I've found that the $3000 limit is just the anonymous limit, over that and they ask and record your ID......

[BigMass]

Originally posted by kdwebber


I have a hard time taking you seriously because you really don't know what you are talking about...

http://bullion.nwtmint.com/silver_panam.php

you must have missed the part where he said,

if they are low on silver and/or gold
which happens often for a dealer. Panam is a producer. I've been many times to Albern where they were sold out of all gold and silver products.

[kdwebber]

Originally posted by BigMass


you must have missed the part where he said,

which happens often for a dealer. Panam is a producer. I've been many times to Albern where they were sold out of all gold and silver products.

Or perhaps it was you who missed my link to the NW Territorial mint and not PanAm. NWTM doesn't run out of silver for purchases under $10,000. NWTM is not a mickey mouse local broker with limited inventory.

[ZenOps]

I've heard Albern in town makes far more in Forex transactions than anything else.

So they do play the paper game (which is where one can make a real profit, charging X% if you simply have things like paper Euros and US dollars at hand.)

I get the feeling they are intentionally always a little bit "low" on all metals, to force people to buy from the US - and bring a little bit of metal back into Canada as a slow trickle.

[OU812]

so OP did you do this or not?

[mac_82]

Anyone know of any shops in town that will take Visa? Places like Albern now have signs up saying cash/debit only. I would love to be getting rewards points on some of these transactions.

[Modelexis]

One of the lowest prices I've found has been from:
silvergoldbull.com

Silver is at 31.13 per oz and they sell maple leaf for about 33.50 per oz in a tube of 25

[roopi]

Originally posted by Modelexis
One of the lowest prices I've found has been from:
silvergoldbull.com

Silver is at 31.13 per oz and they sell maple leaf for about 33.50 per oz in a tube of 25

I've used his site before with no issues. Nice and quick.

[ZenOps]

Looks like TDCanadaTrust is now selling the real thing.

http://www.tdcanadatrust.com/products-services/investing/precious-metals/index.jsp?cm_sp=c000-00-1066#bullion

It also looks like they will have access to the 400 ounce gold bars *cough* in addition to the standard mint bullion coins.

If you trust them, they are also selling certificates.

[Sugarphreak]

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[ZenOps]

No clue about pricing or availability. I'm sure there is no way they will have a 5.5% spread.

I'm sure that not every branch will have the ability to do gold, but I can imagine the main branch in larger cities will.

[mac_82]

Don't mess around with Canadian Gold and Silver.

oVmvUC95qt0

[roopi]

Originally posted by mac_82
Don't mess around with Canadian Gold and Silver.

oVmvUC95qt0

Awesome! Too bad he didn't connect on the second swing when the guy was on his way out.

[davidI]

I'm going to try and buy a Maple Leaf coin at one of these vending machines in Dubai: http://www.gold-to-go.com/en/

I've read the mark-up is between 5%-30% so it's more a gimmick than anything. If it's only 5% I may look at something larger than the 1/10 oz. Maple Leaf coins though.

[dirtsniffer]

Alright guys, So I am saving a few hundred dollars a month now and I am trying to figure out what to do with it. Is buying silver a good idea?

I have some long term investments so I am looking for something that is fairly stable, will at least match inflation and can be accessed fairly quickly quickly with small penalties and fees. I have just started making stable income a few months ago so I am fairly clueless into building a portfolio. Does anyone know of any good reading to do online? I would also be willing to take a course or a seminar or something.

Cheers.

[Sugarphreak]

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[freshprince1]

Originally posted by mac_82
Don't mess around with Canadian Gold and Silver.

oVmvUC95qt0

This is awesome, this is where I bought my gold & Silver. Store owner is a very nice guy who took time to explain the advantages of buying either/or.

[freshprince1]

Originally posted by dirtsniffer
Alright guys, So I am saving a few hundred dollars a month now and I am trying to figure out what to do with it. Is buying silver a good idea?

I have some long term investments so I am looking for something that is fairly stable, will at least match inflation and can be accessed fairly quickly quickly with small penalties and fees. I have just started making stable income a few months ago so I am fairly clueless into building a portfolio. Does anyone know of any good reading to do online? I would also be willing to take a course or a seminar or something.

Cheers.

From the research i've done since opening this thread, precious metals is not something you want to rest your retirement fund on. For me, its more of a hobby on the side that one day could make some money, or be a real help if society collapses and I need to barter and trade.

[FraserB]

Originally posted by Sugarphreak
FYI: You cannot store legal tender inside a safety deposit box, which includes any minted coins. So if you do, just make sure not to say anything about it to the staff.

I assume that this has to do with people hiding funds from the CRA?

[Sugarphreak]

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[googe]

http://en.wikipedia.org/wiki/Greater_fool_theory

If you don't know who the sucker is, it's you

[Sugarphreak]

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[Sugarphreak]

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[BigMass]

Originally posted by Sugarphreak
No takers?

Offering 1300$ CAD, even though spot price dipped below 1200 USD this morning

the only people selling gold when prices are this low are paper sellers. Gonna be tough to find someone that wants to unload when prices are falling. Just pony up the extra $20-$30 and go to Albern

[Sugarphreak]

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[BigMass]

Originally posted by Sugarphreak
Low, haha… I remember buying at 700$ an ounce not that long ago!

Yeah I might have to go over there and pick some up whenever I have time. Going to see if I can get some Platinum coins as well, price is way down on that commodity compared to just a few years ago.

must be getting old when 6 years ago is "not too long ago" :p

platinum maples though... mmmm

[Sugarphreak]

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