How do I buy gold but perhaps not have it physically in my hands

JoshL · October 4, 2008 2:39PM

Hi

Can someone tell me the best way to invest in gold/silver. If I want to buy in a little bit per month over time (years). Is it best just to buy it and own it physically - putting it in my safe deposit box? Is there a company you can buy it through that actually holds it? So then I don't have to hold onto it myself.

Does anyone have any choices for companies that you can purchase from and that will hold the gold for you?

How much should one expect to pay over spot? How many do these same companies usually pay you for the gold when you sell it back to them?

I understand that you can only sell so many ounces of gold per day to a coin shop without it being reported? Is this true?

Thanks

MoneyLA · October 4, 2008 2:44PM

This can be tricky because you dont want to buy gold or silver from a company and let them hold it for you unless you are guaranteed that the company will not go broke.

I remind people both on TV and on my web site about International Gold Bullion Exchange of Ft Lauderdale which in the early 1980s was the nation's largest gold bullion dealer. But when the company went bankrupt and the investigators and regulators went to its vaults they found wooden blocks painted with gold paint. There was no gold.

There are legitimate third party holders of gold, such as the GLD electronic traded fund on the stock exchange.

Another proxy for gold is stock in gold mining companies, but when you own stock you have other problems such as labor costs, strikes, cave ins, operating costs, etc.

My first suggestion would be to check with a stockbroker about buying the security GLD.

Next I would use the old fashioned approach... but a few ounces and stick em in your safe deposit box.

Just remember IGBE. It was a miserable lesson for thousands of investors.

HonoluluDude · October 4, 2008 2:48PM

<< Hi

Can someone tell me the best way to invest in gold/silver. If I want to buy in a little bit per month over time (years). Is it best just to buy it and own it physically - putting it in my safe deposit box? Is there a company you can buy it through that actually holds it? So then I don't have to hold onto it myself.

Does anyone have any choices for companies that you can purchase from and that will hold the gold for you?

How much should one expect to pay over spot? How many do these same companies usually pay you for the gold when you sell it back to them?

I understand that you can only sell so many ounces of gold per day to a coin shop without it being reported? Is this true?

Thanks >>

1. Best to own physical bullion, then possibly invest in something like CEF, GLD, SLV for leverage.
If you want high risk, high reward leverage, buy junior mining companies-- They're dirt cheap currently.

2. I wouldn't trust anyone to "hold it" for you. If it's not in your possession you're taking a leap of faith.
But there is James Turk's goldmoney accounts. Do a Google on it.

3. You'll pay a nice premium unfortunately. There's high demand, low supply in the physical market.
Up til early this year it was pretty easy to buy bullion near spot.

4. Why would you want to sell it?

mkman123 · October 4, 2008 2:49PM

you can go to coin stores. Many of those sell gold bullion. You could buy online too. Ebay, on this site in the Buy Sell Area, and on other sites like Apmex, Teletrade, etc. You have many choices.

Expect to pay like 10+ dollars over spot and in California if you spend over 1k on bullion, you don't have to pay taxes on it.

You could hide them someplace in your home only you know about or put them in the safe deposit box. I like to actually own the item and take it out to admire it, etc.

JoshL · October 4, 2008 3:02PM

<< 

<< Hi

Can someone tell me the best way to invest in gold/silver. If I want to buy in a little bit per month over time (years). Is it best just to buy it and own it physically - putting it in my safe deposit box? Is there a company you can buy it through that actually holds it? So then I don't have to hold onto it myself.

Does anyone have any choices for companies that you can purchase from and that will hold the gold for you?

How much should one expect to pay over spot? How many do these same companies usually pay you for the gold when you sell it back to them?

I understand that you can only sell so many ounces of gold per day to a coin shop without it being reported? Is this true?

Thanks >>

1. Best to own physical bullion, then possibly invest in something like CEF, GLD, SLV for leverage.
If you want high risk, high reward leverage, buy junior mining companies-- They're dirt cheap currently.

2. I wouldn't trust anyone to "hold it" for you. If it's not in your possession you're taking a leap of faith.
But there is James Turk's goldmoney accounts. Do a Google on it.

3. You'll pay a nice premium unfortunately. There's high demand, low supply in the physical market.
Up til early this year it was pretty easy to buy bullion near spot.

4. Why would you want to sell it? >>

Well, as far as selling, I would imagine there would come a time that I would like to take some profits from my investment. Down the road. I wouldn't be buying them to pass on to family members or otherwise. Would simply be a hedge.

THanks - I checked out the GLD and SLV stocks. Interesting. Did not know those existed.

HonoluluDude · October 4, 2008 3:12PM

<< THanks - I checked out the GLD and SLV stocks. Interesting. Did not know those existed. >>

They are ETFs. I own CEF myself. CEF holds both gold and silver.

storm888 · October 4, 2008 3:22PM

I am SHORT of both GLD and SLV.

But, I used to be LONG of both; and, I may be again..sooner, rather than later.

HonoluluDude · October 4, 2008 3:32PM

<< I am SHORT of both GLD and SLV. But, I used to be LONG of both; and, I may be again..sooner, rather than later. >>

You can also hedge (short) spot gold with DZZ.

roadrunner · October 5, 2008 12:27AM

Considering that you are a small investor with limited means to buy gold or silver I would ignore the majority of what you read above. All the paper options listed (ETF's such as GLD, gold miner shares, storage with a broker, etc.) are have a level of risk much higher than owning PHYSICAL gold or silver yourself. If you are a player in the stock market and want leverage, then by all means go with paper gold and higher leverage (both up and down). If you are doing this as an emergency "cash-like" nest-egg to counter the effects of a depreciating currency then hold the gold in your hand. You can either keep it hidden at home or place it in a local safe deposit branch at a local bank of your choosing.

At some point in time paper gold could become worthless as there are far more paper derivative contracts written than there is gold in the world to cover it. It's also possible that gold miners could become nationalized down the road and your mining shares confiscated (with a meager payout for your troubles though). We are getting closer to a disconnect point where the paper gold manipulations drive the price of paper gold down but real gold sells for large premiums. And let's face it, gold in the ground yet to be extracted is not worth the same as gold in the hand due to govt market manipulations and interventinos, as well environmental and political whipsawing....but the powers to be would have you believe that the manipulated price of gold in the ground is the real price. It isn't by a long shot.

If you need to have your gold on short notice, you don't want to have to be settling up with a broker on your paper shares. In a futher credit crisis your shares could be tied up while JPM (owner of the gold ETF) figures out what to do. In a bankruptcy your shares will be pooled together with all other creditors. You will likely not see a dime. There are already cases of third party holders of gold such as Merrill Lynch, JPM, AIG that were "holding" metals for clients, and they didn't have it. But they did speculate with their money - a probably against them in the short market.

Considering that most people gravitate towards gold because of distrust in the paper system, it is hard to figure why they would want paper gold shares like GLD. Most advisors would first recommend getting yourself a small stash of real bullion in-hand before dipping into the paper markets. I know I don't have great confidence in JPM as the manager of the gold ETF considering they are the biggest gold short in the word, they hold nearly $90 TRILLION in questionable derivatives, and are way too close to the FED if you ask me. Their interests don't match mine. If you are a nimble paper trader like Storm888 who can dump shares of GLD within minutes of a wind shift and stay whole, then do that. But if the crap hits the fan, the average Joes will not be able to exit through that tiny hole fast enough before it gets clogged.

Paper gold? At your own risk as long as you know all the rules and who makes them. What's real is usually what's in your possession.
Goldman Sachs was short gold on the TOCOM for many years, they are now long overall.

roadrunner

jmski52 · October 5, 2008 1:44AM

I would imagine there would come a time that I would like to take some profits from my investment. Down the road. I wouldn't be buying them to pass on to family members or otherwise. Would simply be a hedge.

If you are investing, I would recommend buying physical metal and putting it into a safe deposit box (or equivalent). If you are *trading regularly* like Storm888, the ETFs are best in terms of low transaction costs.

A hedge against what? If you think that the monetary system is fine and will protect your assets, go with the ETFs. If you think that the monetary systems is rigged and designed to strip your accounts of any value over time, then physical metal is the only way to go.

Unless you are a saavy trader who can go head-to-head with the likes of Storm888, you are setting yourself up for a quick loss and an exit from the market if you go with the ETFs.

My suggestion: buy physical metal.

Just an unvarnished opinion from an ordinary person.

COINB0Y · October 5, 2008 2:01AM

I am SHORT of both GLD and SLV. But, I used to be LONG of both; and, I may be again..sooner, rather than later

You had better have your eye on the Level II all day to cover, because both are near a double bottom.

If the Stock Market crashes Monday, you will see a GLD/SLV short squeeze like no other.

Be prepared for a 10%+ jump in the price if stock prices collapse. I would expect a small bump up in Stocks at the open, and that is where I would cover. That said, a big bank in Europe is collapsing this weekend and when the Gold/Silver spot opens in a few hours, you might find prices will have already moved against you before you can execute your cover buys in the morning.

trozau · October 5, 2008 2:02AM

Just DON'T do it! Buy only physical gold.

roadrunner · October 5, 2008 2:05AM

Cohodk has mentioned that with the EU considering a 1pt rate cut to help bail out mortagage lender Fortis among others, that could have negative consequences on US gold prices when the Euro takes a hit. Food for thought. We all realize that at some point all of the G-7 currencies will be looked upon as the fiat that they are and gold will rise against of all them. But for now any currency that can keep its head above water is considered "good." Go figure.

roadrunner

COINB0Y · October 5, 2008 2:07AM

Right now, MS Live is helping out tremendously in allowing folks to get *real* Gold for about $800/Ounce!

If you buy 1/2 Oz Coins, you can get a coin for near $380-$390 (equating to $780/OZ) BECAUSE a 1/2 gold coin listed at $569 will allow you $179 which is 30% Off!

PerryHall · October 5, 2008 2:20AM

<< Just DON'T do it! Buy only physical gold. >>

roadrunner · October 5, 2008 2:54AM

How do I buy gold but perhaps not have it physically in my hands

I think I have a better alternative to the ETF's and will get the same result without even paying the broker's fees.

I will sell you some physical gold at 0% to market wholesale. You then walk down to the worst section of the nearest city to you at 10 pm. Place a sign on your back that says "free gold." Place a blindfold on your face and put out your arms with the gold coins in your hands. I don't think it should take more than a few minutes or seconds before you have bought gold and do not have it physically in your hands. The ETF's offer the same kind of opportunity.

roadrunner

jmski52 · October 5, 2008 2:57AM

rr, that's a classic!

roadrunner · October 5, 2008 3:07AM

Sorry, jmski52 I just couldn't hold that one back once it came to me.
Just had to share it. Guess it's the cynic in me rising to the surface.

And honestly, I believe it's truer than most think. All we have to do is wait and watch....an ETF blow-up in one of the major PM's will appear right in front of us.

roadrunner

illini420 · October 5, 2008 3:30AM

If I'm going to spend the $$$ to invest in gold or silver, I want the physical product in hand. I also like to buy bullion/commemorative coins that fluctuate w/ PM prices since there is also a little chance that the bullion "coin" could get some numismatic value as a bonus.

cinman14 · October 5, 2008 5:09AM

<< How do I buy gold but perhaps not have it physically in my hands

I think I have a better alternative to the ETF's and will get the same result without even paying the broker's fees.

I will sell you some physical gold at 0% to market wholesale. You then walk down to the worst section of the nearest city to you at 10 pm. Place a sign on your back that says "free gold." Place a blindfold on your face and put out your arms with the gold coins in your hands. I don't think it should take more than a few minutes or seconds before you have bought gold and do not have it physically in your hands. The ETF's offer the same kind of opportunity.

roadrunner >>

You have explained the way I feel about EFT's also... Just couldn't come up with a good way to explain it..

storm888 · October 5, 2008 5:18AM

SEC-regulated ETFs are a totally reliable trading vehicle.

Claims to the contrary are NOT accurate.

...................

ETFs should NOT be used as "a stash" of PMs.

A "stash" is ONLY physical, in-hand PMs.

JoshL · October 5, 2008 6:46AM

<< Right now, MS Live is helping out tremendously in allowing folks to get *real* Gold for about $800/Ounce!

If you buy 1/2 Oz Coins, you can get a coin for near $380-$390 (equating to $780/OZ) BECAUSE a 1/2 gold coin listed at $569 will allow you $179 which is 30% Off! >>

What is MS Live?

So, where can I buy physical bullion for spot or near spot? Web links or trusted dealer links?

Where can you get the 1/2 oz coins for near 380 or 390? Links?

Is it better to buy the American Coins or the Canadian? As far as purity goes...does it matter?

Isn't there some rule the government has about buying and selling gold? If you sell more than X amount the coin shop reports it? Is this true?

Thanks

cinman14 · October 5, 2008 7:09AM

live.com is running the 30% rebate for Ebay purchases... Sign up

teletradedirect.com has a pretty good supply of Gold.. I like the maples that are .9999 pure.
some claim that it doesn't matter. But I like PURE 24KT gold... And the Buffalo and Maple are the only .9999.

EFTs are fine if you like the risk. Some claim that there isn't a risk in them. But I think the last few weeks
on the stock market as proven them wrong.. Unless you have the product in your home. Then it is not absolutly safe.

It would probably never happen again. But bank SDBs have been held in control of the goverment in the past.

I just like my PM's in MY control.... If you don't want to hold it buy the EFTs... Just don't be surprised like the WaMU
and Lehmans holders were when their stock became worthless overnight...

The nay sayers will tell you it's not the same. Yet no one has actually SEEN the gold and silver in the private vaults
that guarantee your investment....And can't seem to find a physical audit of them either..

And remember it is being held in a foreign country to boot...

Wait until Barclays become nationalized to shore up the European economy...Like our Fannie and Freddie....

mkman123 · October 5, 2008 7:11AM

certain gold bullion may cost a premium. American Gold Eagles, Canadian Maples, and South African Krugerands cost a premium to buy at my B&M store but when you sell they give you more than other gold products.

You can buy gold online or buy from people on the BST. Put an ad on the BST saying you want gold and I'm sure you will get some private messages. Great deals on this site.

As for MS Live, someone can chime in on it as I do not know of it that well.

JoshL · October 5, 2008 7:17AM

I see this site

http://teletradedirect.com/direct/

Seems to be near spot with small shipping charge.

fc · October 5, 2008 7:22AM

<< I see this site

http://teletradedirect.com/direct/

Seems to be near spot with small shipping charge. >>

Also please note in the main page if you sign up you get a 25 dollar
coupon. Look for the red button with the special.

Now they say they will send it via email.. but i waited a day
and it did not arrive. I called them and asked about it. They told me
to simply deduct the invoice by 25 dollars and they will know exactly
what it is for.

I have to wire them some funds on monday morning. I bought 200
ounces of silver.

READ THE FINE PRINT BEFORE ORDERING. I did.

JoshL · October 5, 2008 7:27AM

<< 

<< I see this site

http://teletradedirect.com/direct/

Seems to be near spot with small shipping charge. >>

Also please note in the main page if you sign up you get a 25 dollar
coupon. Look for the red button with the special.

Now they say they will send it via email.. but i waited a day
and it did not arrive. I called them and asked about it. They told me
to simply deduct the invoice by 25 dollars and they will know exactly
what it is for.

I have to wire them some funds on monday morning. I bought 200
ounces of silver.

READ THE FINE PRINT BEFORE ORDERING. I did. >>

I did note this part

You are encouraged to complete this order and TeletradeDirect® will attempt to fulfill it on the morning of the next open market day. If new market prices make your order total less than your cart currently indicates, TeletradeDirect® will pass the savings on to you and fill your order at the reduced total. If the market changes result in your total increasing, we will contact you to make sure you still want your order. If you do not wish to pay the increased price, we will refund your deposit in full.

fc · October 5, 2008 7:28AM

<< 

<< 

<< I see this site

http://teletradedirect.com/direct/

Seems to be near spot with small shipping charge. >>

Also please note in the main page if you sign up you get a 25 dollar
coupon. Look for the red button with the special.

Now they say they will send it via email.. but i waited a day
and it did not arrive. I called them and asked about it. They told me
to simply deduct the invoice by 25 dollars and they will know exactly
what it is for.

I have to wire them some funds on monday morning. I bought 200
ounces of silver.

READ THE FINE PRINT BEFORE ORDERING. I did. >>

I did note this part

You are encouraged to complete this order and TeletradeDirect® will attempt to fulfill it on the morning of the next open market day. If new market prices make your order total less than your cart currently indicates, TeletradeDirect® will pass the savings on to you and fill your order at the reduced total. If the market changes result in your total increasing, we will contact you to make sure you still want your order. If you do not wish to pay the increased price, we will refund your deposit in full. >>

I got around that by simply placing my order during trading hours and
i locked in a price. They have a rather good reputation from what I have
heard around here. They deliver.

roadrunner · October 5, 2008 9:28AM

SEC-regulated ETFs are a totally reliable trading vehicle

Yes, until the day it becomes otherwise, or frozen, tied up, insolvent, or deemed a fraud like the AIG ETF's for example. To hang one's faith on the SEC at this point is really grasping for straws. "SEC-regulation" is a defacto oxymoron as their recent track record of big bank regulation has shown. ETF's prior to the bank failures may have been a reliable trading vehicle in the paper market. Today, they are just another scheme where most buyer think they have some sort of "claim" on real gold. Nothing could be further from the truth. And if there were claims or a line to punch out of those GLD shares, J6P would find himself at the end of the line once the banks had carved up the fund's assets.

Let's just say the fund is as reliable as the SEC, Treasury, and the banks that run the ETF's.

roadrunner

cinman14 · October 5, 2008 10:25AM

<< 

<< 

<< 

<< I see this site

http://teletradedirect.com/direct/

Seems to be near spot with small shipping charge. >>

Also please note in the main page if you sign up you get a 25 dollar
coupon. Look for the red button with the special.

Now they say they will send it via email.. but i waited a day
and it did not arrive. I called them and asked about it. They told me
to simply deduct the invoice by 25 dollars and they will know exactly
what it is for.

I have to wire them some funds on monday morning. I bought 200
ounces of silver.

READ THE FINE PRINT BEFORE ORDERING. I did. >>

I did note this part

You are encouraged to complete this order and TeletradeDirect® will attempt to fulfill it on the morning of the next open market day. If new market prices make your order total less than your cart currently indicates, TeletradeDirect® will pass the savings on to you and fill your order at the reduced total. If the market changes result in your total increasing, we will contact you to make sure you still want your order. If you do not wish to pay the increased price, we will refund your deposit in full. >>

I got around that by simply placing my order during trading hours and
i locked in a price. They have a rather good reputation from what I have
heard around here. They deliver. >>

I recieved 9.00 off my last order because silver took a down ride after my order was placed... You can avoid the bank wire fee
by mailing a check or M.O... When I called my first time buying they said the 3 day rule for the rest of the payment is just a guideline.

My check arrived in 4 days and they delivered with an e-mail confirmation letting me know when it shipped.

I hope you guys have a good experience with them...

And the 25 bucks off the first order is nice as well...

JoshL · October 6, 2008 5:29AM

Well, I ordered gold on Saturday. That was before the huge spike. I ordered from teletrade. Now I haven't heard anything from them. Not sure what happened. I read on the fine print they were supposed to call me if gold went up before the order was closed on their end.

How do I buy gold but perhaps not have it physically in my hands

Comments