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How to Buy Bullion (What to Ask and What to Own)
Quite a few articles have been written about the importance of owning Gold and other precious metals as a means of maintaining one’s wealth in the face of rampant money printing by the world’s Central Banks.
Today I’m going to share some ideas on how to actually buy bullion.
As far as precious metals go, you need to:
- Own actual Bullion
- Store it yourself (not in a bank)
I do not recommend owning a paper gold-based ETF because frankly the custodial risk is high (that is, there’s no telling if the Gold is even there or who would get it if the ETF is liquidated).
In comparison, physical bullion, stored outside a bank, is literally money in hand. You know where it is and you can find out what it’s worth. Compare that to a Gold ETF in which you’re hoping that the bank actually has the Gold and that it could actually send it to you if you requested (fat chance).
In terms of actual gold coins, there are three coins that comprise the bulk of the bullion market. They are Kruggerands, Canadian Maple Leafs, and American Gold Eagles. I’ve been told to avoid Maple Leafs by both a trader and a bullion dealer as they can easily be scratched which damages the gold and reduces the coin’s value.
In terms of silver, the easiest way to get it is via pre-1965 coins (often termed “junk” silver). You can also get silver one-ounce rounds (coin-like medallions) and 10-ounce bars. Or you can buy Silver Eagles coins.
I cannot tell you which dealer to go with, but look for someone who’s been dealing for years (not a newbie). You should always ask for references from the dealer (former clients you can talk to about their purchases/ experiences).
Some warning signs to avoid are dealers who try to store your bullion. Never, I repeat, never store your bullion with someone else. Always store it yourself. Also, be sure to talk to the dealer for some time and ask him or her numerous questions about the industry, the coins, etc. (feel free to test him or her on the information I’ve provided you with e.g. the three most liquid Gold coins, etc.). If they can answer everything you ask in a knowledgeable fashion, their references check out, and you verify everything they say with a 3rd party, you should be OK.
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Best Regards,
Graham Summers
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Exactly!
I stopped reading after this paragraph
"I’ve been told to avoid Maple Leafs by both a trader and a bullion dealer as they can easily be scratched which damages the gold and reduces the coin’s value."
No doubt 9999 fine will scratch easy. Duh!
Nevertheless, it must only happen to morons.
Nowhere in the article does it actually say what to ask for (at least in specific terms...commissions, quality, bullion coins or collectable and what the difference might be, etc.)
And, nowhere does it say how to store them at home: In your desk drawer, the hidden safe, in the gun safe, in a buried piece of PVC in some field under a black rock that looks like it doesnt belong there--alongside the fense....)
I read it, and I wonder who he was writing it for?
Posting had a few useful points, but a bit short on how to buy actual bullion + what to ask/what to own.
Some interesting points regarding trusting the dealer and the liquid part about Krugers <3, Maples, and Eagles.
However, the article would be more useful if it also talked about things like premiums, differences in purity, liquidity of different sizes of the coins, what about bars?
Do your research from a wide source base - don't rely on one article like this. Personally, having done my research, the 'advice' above isn't particularly useful - other than the golden ruel: buy & hold, personally, physical.
In a nutshell: buy 22/24 carat gold coins in (up to) 1 Toz sizes, buy loca (LCS) l for cash, don't fret about paying a dollar or two extra per Toz if it means you can. Compare the market in prices. Take the gold & hide it, don't tell.
Go to wiki & learn about purity (carat #) & weights of various coins (there are aslo lots of sellers sites with this info) etc. Small 1 toz bars are ok, but bigger means more risk for the average buyer if fakes are a worry.
Seems to me the main thing he confused people on or could have is the three main coins - AGE, Maple or Kruger - all three have exactly 1 troy ounce of .999 gold.
In the end, to me, that's all that matters. If it comes with it's own airtite, then they saved me 35 cents or so. Other than that, it's gold.
Others might live somewhere that the purity makes a difference in taxes or rights to own or classification, however, I don't.
"...all three have exactly 1 troy ounce of .999 gold."
AGEs and Krugs are not .999 or .9999 fine and cannot be compared to Maples in terms of purity.
They all have 1 troy ounce of .999 gold. Other metals are added to the gold that take it over 1 troy ounce.
If the coin were to be refined it would result in 1 troy ounce of .999 gold.
That's why they weight more than 1 troy ounce.
No matter how you melt it, you are getting 1 troy ounce of .999 gold with maples and krugers and AGEs.
However, some bs legal distinction may be in your area. Not in mine.
I don't figure the weight of the plastic airtite either. It evaporates when melted.
Do you dispute that there is 1 troy ounce of .999 gold in AGEs and Kruger?
If he told you everything there wouldn't be anything left to sell you. This is an advertisement, not useful advice.
GoldSilver.com is the best I've used over the past 10-years of stacking.
Michael Maloney charges RIDICULOUS premiums. Stay local instead and save money.
Do not leave a trace of the transactions. After the thieves mess up the dollar, they will be after anything of value.
To Paper Trail or not to paper trail, that is the question.
It should be assumed that a desperate,fascist State, out to get the citizens' gold, starts with the easy stuff, for which it can get public opinion on its side: to wit, "drug gold" or "(money) laundered gold", associated with criminality.
And after "right-wing militias" have been sufficiently demonized, their gold will be next.
When gold is called in, gold without a document trail that establishes you as legitimate owner, will be the first to be declared "illegal". You can dispose of it, but only through black market channels, who will take their premiums.
Documented bullion will remain tradable on the commodity markets, albeit probably taxed.
What do other ZH ers think?
Sounds plausible, and certainly fits the current establishment 'playbook'. Might explain the sudden 'surge' in counterfeit bullion we've been reading about. Would not be surprised in the least if the member-entities of the NW0 are the financiers behind the various asian (and other) counterfeiting operations. Thus, they can claim that the only way to 'make sure' the metal you have is 'legal', is to require some form of gubment certification as you mentioned. The concurrent tax you described fits their MO perfectly as well.
I would only add that the black market channels will not only carry the harsh premium, but also the very high risk of prison time when your transactions become victims of the 'snitch society' our totalitarian gubment is actively cultivating.
Not to mention shipping and insurance charges. Stay local.
Tulving...free shipping and they have usually paid $25 toward my bank wire. ...and no I am not affiliated...
Maybe a cheaper bank is in order - my bank wires only cost $ 5.00
IMO and experience Tulving have the best prices, but they are a relatively small operation and can get backed up in times of volatility when there are a lot of people buying (over a week). They also messed up an order of mine recently and sent me 80K worth of gold I did not order. When I returned it I never even got a "thank you" and it took them another week to get my original corrected order to me. I have placed other orders with them since that time because if you are acquiring any quantity you just can beat their price.
This is an advertisement for subscriptions or financial advice or whatever it is he's selling...
Nothing to see here, folks...move along.
I can't afford these free pdf reports anymore.
Gives a place for others to comment. Read on bitch, you may learn something. If not, YOU move along and your little dog too.
What's the view of physical trusts like Sprott's PHYS and PSLV?
ISA
when all hell breaks loose I want my gold very close to me. If you just want to bet on the price of gold then any old ETF will work but I trust no one to give me back my gold if there is a crisis and gold suddenly goes much higher.
Sprott is the second safest bet after physical but it is more liquid and transferable (imo ofc). Owning both in one way or another seems like a good idea to me, but people should own what they feel comfortable with. In order to feel comfortable dd is needed.
I hear Sprott is honest. I wouldn't get near Comex or the GLD and SLV as i hear they are levered 100 times. The CFTC and SEC are either inept or corrupt from what i can tell.
There is still a paper trail. The US government can effectively confiscate your shares. And Sprott being honest won't save you when the Canadian government and the DTCC are dishonest. The NWO puppet Harper is glad that Sprott is piling up all the metal in one place for easy collection by the NWO's badged henchmen. The DTCC probably tolerates naked shorting (i.e. counterfeiting) of PSLV shares just like they tolerate it with other stocks.
Don't know this for sure. Maybe it works differently when the stock is Canadian? I haven't seen any discussion on whether JPM can redeem metal using naked shorted shares or the real shares of investors who don't know how to stop their shares from being lent out. Even genuine, physical PSLV certificates wouldn't help in this case because there would be no metal to back them. Would this scam work?
If you've bought your coin, bar, rat's pellets, whatever other than anonymously/cash, there's a paper trail.
Like from a dealer, credit card, delivery...
Get real.
If they wanna get it they'll do so unless cash only.
And storage... try insetting a one oz coin on each grip of your auto.
Come and get it!
ridiculous to avoid Maple Leafs unless you are worried about numismatic value. Yes they are purer(gold) and scratch easier, but the metal content remains the same.
Agree. A perfect maple will fetch a slightly higher premium when you sell, one with minor scratch(es) gets within $20 of a perfect one. Not a big deal.
Avoid Maple Leafs because they might get scratched if carelessly mis-handled? Yeah, wouldn't want to own any pure gold now would we... I don't know why I even read Graham's posts anymore nor do I understand why they end-up on ZH in the first place.
No mention of the gold sovereign, which:
1. in the UK could be sold for a profit with no capital gains tax.
2. Is probably too small to counterfeit using a tungsten/gold blank.
3. Would be more "comfortable" to hold and sell individually if gold goes to $10,000/oz.
4. As for storing gold with a 3rd party, what planet do YOU come from.
5. Once again I deduce that Phoenix Capital are talking shite to sell their reports, cos I've had the free ones and they're crap.
6. Gold bitchez, BTFD.
"3. Would be more "comfortable" to hold and sell individually if gold goes to $10,000/oz."
When gold goes to $10k/oz, that $10k will still get you a good suit or a bad horse, same as $1500 gets you today or $20 did in 1930.
The value of the dollar is changing, not the value of a given quantity of gold.
Who pays for a bad horse?
mjc
you might want to rethink that. IMO gold is undervalued, it is suppressed by manipulation and by the mere EXISTENCE of the paper market ...see fofoa for details on that one... http://fofoa.blogspot.com/2012/07/fallacies-1-paper-gold-is-just-like.html . For it to function as a store of value when the dollar collapses it MUST do so at a higher value. The 'suit' arguement is often repeated but I think it is wrong.
That would be a really good suit.
There is a correlation between inflation and the price of gold, but it is not direct. Using your logic, the dollar is worth 14% of what it was in 1999 ($250/$1800). In other words, groceries should cost 7.2 times what they did in 1999. They don't. Gold may in fact be over valued now, or way under valued 13 years ago, or a combination.
"Using your logic, the dollar is worth 14% of what it was in 1999 ($250/$1800). In other words, groceries should cost 7.2 times what they did in 1999. They don't."
Food would be a poor choice for comparison between any two single years due to supply volatility. That said, if you look at historical food prices over a 100 yr span (say, since 1914), the rate of inflation in food prices in dollar terms tracks pretty well with the rate of inflation in gold in dollar terms. See
http://historicaltextarchive.com/sections.php?action=read&artid=418
I'm going to go with undervalued in the 90's.
My dealer in Canada, solid & dependable, honest and low premiums.
http://silvergoldbull.com/
from the phoenix a post on buying silver and gold tenyears late lol....
this phoenix person i s so so up to date /
had the wrong information on QE,, now comes up with a block buster .. buy gold and silver ..coins and put in in your possession .
gold sticker for the phoenixs forehead
dumpster! Good seeing you again! I too have been stacking, long before Zero Hedge even was born.
I nornally agree with and enjoy Phoenix Cap's views, but not all those in this piece. Yes, take only physical bullion and store it yourself. That's called personal responsibility. And yes, stay the hell away from paper gold. Best advice you'll ever get. If you hold ETF's thinking you own gold you are an idiot and you deserve no sympathy--and you'll get none. But who cares if a Maple has a few scratches on it? It's bullion for chrissake. A common date Maple or Philharmonic is not worthless because of some scratches. What are you doing with it -- tossing it across the floor like horseshoes? Jangling it in your pocket? Maples and Phils are pure gold, unlike Eagles and Krugerrands, and many appreciate the pure gold. So are Buffalos, which many consider very beautiful. And taking it one step further, buy and hold smaller pieces than the one ounce coins once in awhile, which opens the door to Sovereigns and gold Francs. Nobody is counterfeiting dos pesos gold. Smaller pieces are far more versatile. Same goes for silver. Thanks for putting folks on the right track, Phoenix Capital, but if you're giving advice to the poor newbies, take it a little further next time.
Scratches on gold coins totally unnecessary - all gold coins SHOULD be sold in airtight clear plastic coin hlders
My information is that in Canada there is a tax advantage with .999 gold. For 22 carat, which includes many coins meant for circulation (copper and other metals mixed in for durability yeilding a 90% gold piece) that advantage is lost. In the USA it is purely a personal preference. I like a mix of small coins and large, bars are good too. Mexico, Austria, France, England, USA, Canada, Iran (yep they made a coin with .1177 OZ) and China all make or made lovely coins...forgot Argentina...
@ bardot63
I too have heard that scratched gold coins get you less if you cash them in.
But, I give you a big fat PLUS 1 for mentioning smaller coins. WHile the great bulk of my gold is in 1 oz AGEs, I also have several 1/10th oz AGEs for whatever may come up. the one tenth oz gold coins are roughly the "geometric mean" (if you will) between the 1 oz AGE and the 1 oz ASE, and so a very handy size... YES< 1/10 oz gold coins sell for a high premium, but you can SELL them at a premium (if you must) as well. See tulving.com.
Also, it is less likely that the Chinese and/or other counterfeiters will get around to making fake 1/10th coins, as tungsten is VERY hard to work with, and probably not worth their while to do it when there are so many other larger gold coins and bars out there.
Gold Maples - you're buying .999 gold bullion & if their premium isn't any greater than similar it maters not a jot about scratches (although I've never noticed GMs any more scratched than others). You'd think you were being given advice about numismatic quality, which is precisely not what you're buying/interested in. When the time comes, any putative buyer won't be agonising about a less than perfect obverse/reverse - only the weight & carat. Unless the scarring is so great that it's actually removed material it's irrelevant for bullion coins. In a fancy-shmancy coin shop you may be haggled down a few fiat units of currecny for a 'scrached' coin on re-sale , but that's just normal commercial to-and-fro & the range will be less than what you'd get by shopping/selling around anyway, all other things being equal.
I'd also 2nd the fractional Toz coin idea - British Sovereigns are good: known & accepted worldwide as proper money for ~200 years (they are real, spendable legal tender in the UK, post 1837 - although you don't seem them in your change!). But don't forget other European small gold coins - Swiss/French francs, German gold 20 marks etc - all very attractive & don't attract any numismatic premium (unless sold as such) over spot bullion price, other than bullion premium. Old (slightly worn) gold coins are much less likely to have been faked in some way - patina is your friend. Tungsten coin chicanery (esp. on fractional Toz coins) would neither have been worth it, nor, I suspect, practicable, 80+ years ago. Buy a small digital scale (0.01 gram resolution is good enough) & make a point of weighing/comparing against published values - some wear on older gold coins is acceptable & they may have lost .05/.1 of a gram over time. Simple rule is: the the bigger the unit (bar/coin) of gold, the more temptation for the forger, so small(ish) sizes are safer.
Vis-a-vis the purchase point - yes, do keep purchases off grid if you safely can, although draw the line at cash transactions via classified small ads & meets in motorway service stations. LCS - yes - and often you can pay cash for small amounts (check your jurisdiction laws/regs on that) & will give provenance (via receipt) to your coins. You may also want to sell back at some point.
Store offsite if you can & never tell anyone (not even extended family - spouse/partner/closest only) - act dumb if the topic arises socially, and when you're buying always appear like a 'small time' person - you don't need any type of profile here.
The whole point with gold is the metal itself, not some pretty (or ugly) figures on the face of the coin. You can cut a bigger coin or bullion in smaller pieces.
If you want some scratch resistant coins, try stainless steel coins.
If 1oz of pure gold (.9999), why would the US government start to produce the gold Buffalo. Good point.
California Numismatic told me 6 or 7 years ago that they refused to sell gold maples anymore because of the scratches they'd get back from customers wanting to sell back since the coin's design makes it vulnerable to scratches. They sold me their last ones for $20 over spot. I drained my bank account and got 8 of them for like $650 a coin and they were the 9999 with the skinny version of the queen. Not the new double chin blue poofy hair version. That was a happy day for me. Don't care about the potential scratch issue. Dam fine pure gold coin. I buy 1 oz swiss bars now because APMEX wants $50 or $60 over spot now and I don't care for a new blue hair maple anyway. Did I mention I love gold?
And...why would any intelligent being save in gold and THEN "sell" it back for paper cash? Seven years ago!! $400 gold.
I would prefer to pay cash and pick up in person. Were I to buy metals, I certainly wouldn't trust APMEX or Kitco with my information. Patience, due diligence and anonymity would serve anyone well who is considering buying metals.