Getting sick of gold premiums

Halfpence · February 19, 2021 2:44PM

I'm pretty tired of seeing spot gold price go down but the price of gold coins staying the same or going up. I've been holding out for awhile now, waiting for spot to drop even more, but I'm not sure I'll ever pull the trigger at this point.

Jimnight · February 19, 2021 2:58PM

Yeah I hear yuh!
But IMO ... in today's world anything can happen fast and become a trigger.

bidask · February 19, 2021 3:08PM

@Halfpence said:
I'm pretty tired of seeing spot gold price go down but the price of gold coins staying the same or going up. I've been holding out for awhile now, waiting for spot to drop even more, but I'm not sure I'll ever pull the trigger at this point.

I agree they should not imo if the price of gold is going down

blitzdude · February 19, 2021 4:00PM

I show gold up $9.30. THKS!

derryb · February 19, 2021 4:57PM

double post

derryb · February 19, 2021 5:01PM

@Halfpence said:
I'm pretty tired of seeing spot gold price go down but the price of gold coins staying the same or going up. I've been holding out for awhile now, waiting for spot to drop even more, but I'm not sure I'll ever pull the trigger at this point.

Then open an account on the COMEX and place your order for 100 oz bars, wait for the contracts to mature then take delivery (if they will in fact deliver) and pay the additional costs that come with delivery. The thugs running the COMEX do not want you taking delivery, they will make you jump through hoops. COMEX is not designed to sell physical metal, it is designed to protect wholesale producers and wholesale consumers from volatile price swings. To do that they must control price (and you thought this was just a conspiracy theory. LOL).

. . . or pay a premium to take immediate delivery of very small lots of quality gold products.

Spot is the "I promise I'll give you gold on X date" price. To have gold the in your hand now or tomorrow you pay the premium. The greater the risk with the promises the higher the premiums with the real stuff.

It is a mistake to believe the spot price is the price of real gold. There will be the day when real gold price completely divorces itself from spot price and you will be wishing you had paid those premiums.

Premiums are God's way of saying "yes, Virginia, there really is real gold."

RobM · February 19, 2021 5:23PM

@derryb, you'd be waiting indefinitely if you placed an order for 1000 oz gold bars.

derryb · February 19, 2021 5:26PM

my bad, fat finger, extra zero. Fixed.

Dscoin · February 19, 2021 7:03PM

Paper gold (infinite amount) is going down, physical(finite amount) is going up and it’s going to stay this way for a while until the demand either goes down or the supply goes up. I don’t see either of those happening in 2021

3stars · February 19, 2021 10:08PM

Never purchased gas for your car then? Prices go up a lot quicker than they go down with the price of oil.

bronco2078 · February 20, 2021 8:05AM

is one perhaps not regretting loading up last spring at much lower prices?

The thing is , if you sit on the sidelines until a move up is confirmed then chances are you will not be able to buy .

whatever it is you are interested in , metals stocks , pokemon cards , if you wait for a safe in you already missed out

ricko · February 20, 2021 9:13AM

Those who have stacked for years look on with a smile.... Cheers, RickO

ChewliesGum · February 20, 2021 12:33PM

whatever it is you are interested in , metals stocks , pokemon cards , if you wait for a safe in you already missed out

This is a great viewpoint to have. Trying to time anything as an investment is nearly impossible.

alexerca · February 22, 2021 8:07AM

2 weeks ago I bought buffaloes for $85 over spot now they want $130! I have plenty precious metals anyhow time to quit! I love what the fractionals have done but maybe that's because I own so much of it!

Halfpence · February 22, 2021 1:55PM

@bronco2078 said:
is one perhaps not regretting loading up last spring at much lower prices?

The thing is , if you sit on the sidelines until a move up is confirmed then chances are you will not be able to buy .

whatever it is you are interested in , metals stocks , pokemon cards , if you wait for a safe in you already missed out

No regrets here. I've got plenty of gold at a low cost. Just want more, but not paying these prices.

@ricko said:
Those who have stacked for years look on with a smile.... Cheers, RickO

I've been stacking for quite awhile now.

@3stars said:
Never purchased gas for your car then? Prices go up a lot quicker than they go down with the price of oil.

This is a silly thing to say. Gold is a discretionary expenditure.

Halfpence · February 22, 2021 3:17PM

@ChewliesGum said:

whatever it is you are interested in , metals stocks , pokemon cards , if you wait for a safe in you already missed out

This is a great viewpoint to have. Trying to time anything as an investment is nearly impossible.

I would never buy gold as an investment.

ChewliesGum · February 22, 2021 5:10PM

@Halfpence said:

@ChewliesGum said:

whatever it is you are interested in , metals stocks , pokemon cards , if you wait for a safe in you already missed out

This is a great viewpoint to have. Trying to time anything as an investment is nearly impossible.

I would never buy gold as an investment.

If you have no concern whatsoever about gold as an investment you should be willing to buy at any price just because you like it.

Halfpence · February 22, 2021 5:17PM

I would never buy gold as an investment.

If you have no concern whatsoever about gold as an investment you should be willing to buy at any price just because you like it.

Not at all. I just don't want to overpay. It's not very complicated.. I want to maximize my gold’s ability to store wealth. It’s simply not prudent to buy when premiums are high because of FOMO demand.

Remember what happened in 2013?

blitzdude · February 22, 2021 5:45PM

Look at that, up another $25.90. Ask and ye shall receive. THKS!

ChewliesGum · February 22, 2021 5:54PM

@Halfpence said:

I would never buy gold as an investment.

If you have no concern whatsoever about gold as an investment you should be willing to buy at any price just because you like it.

Not at all. I just don't want to overpay. It's not very complicated.. I want to maximize my gold’s ability to store wealth. It’s simply not prudent to buy when premiums are high because of FOMO demand.

Remember what happened in 2013?

I get what your saying and I totally agree. I don’t want to buy with premiums this high either. But since you are using it as a hedge for your portfolio, if you understand efficient market theory it says that all current and relevant information is already priced in to a stock price (or gold price). So therefore gold is selling exactly where it should be right now, which takes into account the fomo you referenced.

This could be a new price floor forming and you might never have the ability to buy gold at $1950-$1990 range again.

There are many factors such as your age, how many years until your retirement, and your total portfolio value that should come into play when deciding to buy at these levels or sit on the sidelines.

There seems to be a lot of division of opinions on these bullion forums about how much and at what prices metals should be purchased. Everybody has a different life situation they’re in and each should make his or her own opinions on the best course of action for their portfolio.

Halfpence · February 22, 2021 6:33PM

I get what your saying and I totally agree. I don’t want to buy with premiums this high either. But since you are using it as a hedge for your portfolio, if you understand efficient market theory it says that all current and relevant information is already priced in to a stock price (or gold price). So therefore gold is selling exactly where it should be right now, which takes into account the fomo you referenced.

This could be a new price floor forming and you might never have the ability to buy gold at $1950-$1990 range again.

There are many factors such as your age, how many years until your retirement, and your total portfolio value that should come into play when deciding to buy at these levels or sit on the sidelines.

There seems to be a lot of division of opinions on these bullion forums about how much and at what prices metals should be purchased. Everybody has a different life situation they’re in and each should make his or her own opinions on the best course of action for their portfolio.

I appreciate your thoughtful response. You're right, all relevant information is currently priced into stocks. But don't you think physical gold price is governed by more than EMT? While spot price is driven by EMT, premiums on physical gold has a strong supply/demand driver when its sold from store shelves.

I think demand of physical gold will predictably drop to some degree because the reason for the demand (FOMO) is not sustainable. So, even if $1,900 is a new floor, I could envision premiums at my LCS to be closer to the $60 price point, rather than $200. I could be wrong, but I'm not relying on any of this for my retirement, so its a low stakes game for me.

ChewliesGum · February 22, 2021 6:47PM

@Halfpence said:

I get what your saying and I totally agree. I don’t want to buy with premiums this high either. But since you are using it as a hedge for your portfolio, if you understand efficient market theory it says that all current and relevant information is already priced in to a stock price (or gold price). So therefore gold is selling exactly where it should be right now, which takes into account the fomo you referenced.

This could be a new price floor forming and you might never have the ability to buy gold at $1950-$1990 range again.

There are many factors such as your age, how many years until your retirement, and your total portfolio value that should come into play when deciding to buy at these levels or sit on the sidelines.

There seems to be a lot of division of opinions on these bullion forums about how much and at what prices metals should be purchased. Everybody has a different life situation they’re in and each should make his or her own opinions on the best course of action for their portfolio.

I appreciate your thoughtful response. You're right, all relevant information is currently priced into stocks. But don't you think physical gold price is governed by more than EMT? Supply and demand has clearly been influential in the premiums we're seeing. I think demand of physical gold will predictably drop to some degree because the reason for the demand (FOMO) is not sustainable. So, even if $1,900 is a new floor, I could envision premiums at my LCS to be closer to the $60 price point, rather than $200. I could be wrong, but I'm not relying on any of this for my retirement, so its a low stakes game for me.

I actually asked this question in another thread a few weeks ago about the history of high premiums and the response seemed to be in the 3 month range.

Full disclosure, I am very new to adding physical metals, but consider myself fairly well versed in all other aspects of managing my assets.

I’m sure we will see premiums come down soon, it’s just a matter of where spot price is at that point. Is there really a difference in buying gold at 1850 spot with a $150 premium versus 1930 spot with a $70 premium?

Halfpence · February 22, 2021 7:01PM

I actually asked this question in another thread a few weeks ago about the history of high premiums and the response seemed to be in the 3 month range.

Full disclosure, I am very new to adding physical metals, but consider myself fairly well versed in all other aspects of managing my assets.

I’m sure we will see premiums come down soon, it’s just a matter of where spot price is at that point. Is there really a difference in buying gold at 1850 spot with a $150 premium versus 1930 spot with a $70 premium?

Three months sounds about right to me. I'll have to dig up your thread to see the discussion. As to your question about "what's the difference?" -- the difference is time, which provides insights into market conditions. If spot goes up and premiums go down (like your scenario), then you've lost nothing. If spot goes down and premiums go down, you've saved money.

ChewliesGum · February 22, 2021 7:08PM

@Halfpence said:

I actually asked this question in another thread a few weeks ago about the history of high premiums and the response seemed to be in the 3 month range.

Full disclosure, I am very new to adding physical metals, but consider myself fairly well versed in all other aspects of managing my assets.

I’m sure we will see premiums come down soon, it’s just a matter of where spot price is at that point. Is there really a difference in buying gold at 1850 spot with a $150 premium versus 1930 spot with a $70 premium?

Three months sounds about right to me. I'll have to dig up your thread to see the discussion. As to your question about "what's the difference?" -- the difference is time, which provides insights into market conditions. If spot goes up and premiums go down (like your scenario), then you've lost nothing. If spot goes down and premiums go down, you've saved money.

Titled “For you lifetime stackers”

Getting sick of gold premiums

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