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What's the most cost-effective method to purchase a gold bar/brick?

golddustingolddustin Posts: 838 ✭✭
in Precious Metals
I have a co-worker who is aware of my numismatic 'habit' and asked where she could buy a gold 'block'. I told her that she would probably want to buy a 'bar' or small 'brick' depending on the amount of $$ she wanted to spend. Also mentioned the possibility of having the seller store the bullion for her & associated costs.
Any comments as to who has the best purchasing system out of all those companies offering gold right now? What's the going rate for storage if she decides to have them keep the gold for her (which I doubt - I think she wants it in the bank or buried in the back yard!)

Thanks!
Don't you know that it's worth
every treasure on Earth
to be young at heart?
And as rich as you are,
it's much better by far,
to be young at heart!

Comments

  • gecko109gecko109 Posts: 8,231 ✭
    Cost effective? The bigger, the cheaper is the rule. A 1 gram gold "brick" will cost about 15-25% over melt while a 1 kilo "brick" will cost maybe 3-5% over melt. As far as storage....well, that really depends on her intentions of why shes now buying gold. Does she see it as an investment opportunity? If so, then keep it in a bank, or in a dealer's vault. Is she worried that she might need something of value to barter with in case of a monetary collapse? Then shes FAR better off doing a little "midnight gardening".image
  • ProofCollectionProofCollection Posts: 6,121 ✭✭✭✭✭
    The cheapest is probably to buy a 33.2 or 100oz gold bar via the futures market.
  • gecko109gecko109 Posts: 8,231 ✭


    << <i>The cheapest is probably to buy a 33.2 or 100oz gold bar via the futures market. >>




    Really? What do they charge for delivery?
  • morgantypemorgantype Posts: 456
    IMHO if this is an investment I would buy from a brick mortar, less than 10,000 dollars and do some midnight gardening.

    If she is worried about shtf then I would suggest the "fractional" strategy employed by gecko, myself and others. Buy 1/10 or 1/4 age and then again, do some midnight gardening.

    Regardless, I would try and stay off the grid.
    Many buy and sell transactions. Let's talk!
  • golddustingolddustin Posts: 838 ✭✭
    Regarding the purchase thru the futures market - does that involve the physical delivery of the gold at some point - and would you have to wait until the contract is up? I would also think that a broker would be involved, and therefore associated fees, minimums, etc.?
    I mentioned just purchasing gold coins, but she seems intent on a 'brick' of gold.
    Don't you know that it's worth
    every treasure on Earth
    to be young at heart?
    And as rich as you are,
    it's much better by far,
    to be young at heart!
  • ProofCollectionProofCollection Posts: 6,121 ✭✭✭✭✭
    Well I've never done it myself, but you buy a contract, then tell your broker that you wish to take delivery. Then you have to wait for the contract to come due, and they give you a certificate. Then you have to call and arrange for delivery.

    There are charges all along the way... probably a fee for issuing the certificate, then redeeming the certificate, and then storage and delivery fees. But I imagine the fees are on the order of a few hundred dollars total, which isn't that much on a per ounce basis.
  • gecko109gecko109 Posts: 8,231 ✭


    << <i>Regarding the purchase thru the futures market - does that involve the physical delivery of the gold at some point - and would you have to wait until the contract is up? I would also think that a broker would be involved, and therefore associated fees, minimums, etc.?
    I mentioned just purchasing gold coins, but she seems intent on a 'brick' of gold. >>





    "I mentioned just purchasing gold coins, but she seems intent on a 'brick' of gold"

    This tells me 97% of the "story". She has not done any research at all into gold, and simply wants to jump on the bandwagon....which is not to say thats a bad thing. Please tell her that a 32.15oz brick is alot tougher to move than 32 one ounce coins in any environment, especially a severe monetary collapse. You might ask her if she was given the choice between a loaf of bread she could never slice, or a pre-sliced loaf of bread that never went stale, which would she choose and why? This should do the trick on the subject of divisibility being an advantageous quality. Then ask her what her motivation is for her desire to own the metal....this is very important! It will not only determine the size of the gold she decides upon, but also which way to best store the gold. If all she really wants to do is buy a "brick" and put it away, then APMEX has plenty of choices, and alot of banks offer safety deposit boxes. If shes willing to do a little more introspection, then talk to her and get back to us for the next logical move.
  • secondrepublicsecondrepublic Posts: 2,619 ✭✭✭
    does she have any idea of what a gold "brick" or decent sized bar will cost?
    "Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
  • PerryHallPerryHall Posts: 46,122 ✭✭✭✭✭


    << <i>does she have any idea of what a gold "brick" or decent sized bar will cost? >>



    Agree. Unless she is very wealthy, she may suffer sticker shock. It may be more practical for her to periodically buy few AGE's and take actual possession of them. I've never trusted others to hold my PM's.

    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • trozautrozau Posts: 3,455 ✭✭✭
    A 12.5 Kg bar at today's spot is over $490,000. BTW, Harrod's sells them (or at least I read that they were selling them late last year). image
    trozau (troy ounce gold)
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