Best way to buy gold - PeachParts Mercedes-Benz Forum

MS Fowler · #1 07-09-2009, 06:37 AM

I think the title says it all. In a time of inflation, gold is often seen as a good place to park some money so that it won't lose value as the currency does.
There are several ways to buy gold. Some that I know of are:
Gold Coins
Gold Bars (taking physical possesion)
Gold certificates ( no possesion)
Stock in Gold mining companies.

I think that you pay a buyer's premium AND a seller's premium when buying and selling gold.
What are the pros and cons of each method. Some, I know--actual gold bars are not easily turned into liquid cash, and usually involve larger sums of money. Gold coins are more easily bought and sold--but how does one know the true value of a coin? Is the collector value more than the gold value, or what?
Is owning stocks or gold certificates really any better than owning stocks in a blue chip company? Some large, secure company like, say, GM for instance, or Bethlehem Steel to name 2 in the not too distant past.

I've watched as my 401K has dwindled to a fraction of its former value. I am thinking Gold might be a good hedge against the coming inflation for a portion of what is left.

LUVMBDiesels · #2 07-09-2009, 07:01 AM

All I know is that the last time this happened people were snapping up Krugerrands because they are exactly one once of gold.

You can also buy ingots, which are smaller and more easily handled. If worse comes to worse, you can always trade gold for food - try that with worthless paper money. I would stay away from mining stock or certificates. If the bank on which the certificate is written goes under you are out of luck, and mines can go bust pretty quickly.

You can also buy these
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=american_eagle_bullion

Jim B. · #3 07-09-2009, 09:18 AM

Well, I never saw a hearse with a luggage rack.

JRS · #4 07-09-2009, 09:34 AM

Another option is an exchange traded fund (ETF) that hold gold for you. GLD is the symbol for one of these.

It will rise and fall with the price of gold, but doesn't require you to hold (and safeguard) the actual gold. It has a cost (expense ratio) of 0.4%/yr.

Versus buying a gold mining stock, a gold ETF won't be affected by the fluctuation of the stock market - only the price of gold. Which, of course, may be good or bad, depending on where the market goes.

Medmech · #5 07-09-2009, 10:10 AM

Locally we have a coin shop that sells coins and bars @ market price. Personally I buy 1oz coins whenever the cash stack gets too thick. It been a little rare lately though

jt20 · #6 07-09-2009, 12:01 PM

its too late to buy gold. Check recent history for its lows and highs within the past 5 years. Don't buy the media rhetoric.

TMAllison · #7 07-09-2009, 12:35 PM

Quote:

Originally Posted by JRS

Another option is an exchange traded fund (ETF) that hold gold for you. GLD is the symbol for one of these.

It will rise and fall with the price of gold, but doesn't require you to hold (and safeguard) the actual gold. It has a cost (expense ratio) of 0.4%/yr.

Versus buying a gold mining stock, a gold ETF won't be affected by the fluctuation of the stock market - only the price of gold. Which, of course, may be good or bad, depending on where the market goes.

Mining companies are also valued on their reserves or lack thereof in addition to fluctuations of the commodity itself. GLD doesnt suffer strikes, cave-ins or deaths.

Merits of the investment aside, if seriously wanting to own gold I'd go the ETF route and let someone else store and insure it. It can also be bought or sold with the click of a button.

LUVMBDiesels · #8 07-09-2009, 12:41 PM

Quote:

Originally Posted by TMAllison

Mining companies are also valued on their reserves or lack thereof in addition to fluctuations of the commodity itself. GLD doesnt suffer strikes, cave-ins or deaths.

Merits of the investment aside, if seriously wanting to own gold I'd go the ETF route and let someone else store and insure it. It can also be bought or sold with the click of a button.

Yes but in a doomsday scenario, will you be able to get at your gold? What do you mean the bank has been taken over by Radicals!!!

If you are going to hoard gold, keep it close and the shotgun closer

Personally I agree that it is too late for gold unless things really hit the fan.

John Doe · #9 07-09-2009, 01:09 PM

Quote:

Originally Posted by jt20

its too late to buy gold. Check recent history for its lows and highs within the past 5 years. Don't buy the media rhetoric.

Yep. Also check your insurance rider if you are holding.....new riders are rising significantly.

Hatterasguy · #10 07-09-2009, 01:41 PM

Quote:

Originally Posted by jt20

its too late to buy gold. Check recent history for its lows and highs within the past 5 years. Don't buy the media rhetoric.

Thats kind of what I'm thinking. I'm waiting for a price drop, I think the gold market like the gun market is pumped up by fear.

Thats why I don't plan on buying either until they correct.

Not to go off topic, but have you seen the prices on M14's lately? WTF? Its as bad as gold.

jt20 · #11 07-09-2009, 01:44 PM

there may be one way MR. Fowler...

Make a habit out of taking leisurely trips to nearby, well-stocked ghettos. Invest in some cheap form of gold analyzing chemistry and buy up the streets. Your little collection just might become a brick in some time.

just don't pay anyone to trade gold for you and forget those silly coins.

Medmech · #12 07-09-2009, 03:09 PM

Quote:

Originally Posted by jt20

its too late to buy gold. Check recent history for its lows and highs within the past 5 years. Don't buy the media rhetoric.

How did the media manipulate gold prices? If you invested in gold five years ago you would be far above doubling your money. It may be high right now but it has a strong floor of support.

Hatterasguy · #13 07-09-2009, 03:13 PM

Yes but if you buy now will you double your money again in 5 years?

I don't know how safe of a bet that is, my gut is telling me the price of gold needs to come down a bit. But I really don't know, so I'm asking.

MS Fowler · #14 07-09-2009, 03:40 PM

Quote:

Originally Posted by Hatterasguy

Yes but if you buy now will you double your money again in 5 years?

I don't know how safe of a bet that is, my gut is telling me the price of gold needs to come down a bit. But I really don't know, so I'm asking.

As I understand it, the valur of the gold actually does not change. What changes is the strength of the various fiat currecies. I see MASSIVE inflation as the only way to "pay" for the trillions of pork just spent, and the additional trillions still to come. No way to raise that kind of money by simply "taxing the rich."
So even though gold may be at a 5 year high, it may go far higher.

jt20 · #15 07-09-2009, 04:00 PM

Can I recall your attention to the shoeshine boy who asked for stock tips from Kennedy (or Rockefeller?)? The investor he asked quickly withdrew many of his investments from the market just before the crash.

If you are seeing ads to 'buy gold now!' or any radio personality suggesting the same.... it is way, way too late.

I am looking at a buy gold now banner as I type this.

I am not saying the media directly manipulated the prices... investors in the know have already invested and the lower ranks have followed suit... thus the price goes up.