General Question

CaptainHarley's avatar

Best way to buy gold?

Asked by CaptainHarley (22419points) August 26th, 2010

With the dollar being a bit unsteady on its feet, I’ve been exploring the possibility of investing a portion of my income in gold. Anyone already done this? Got any pointers for me?

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37 Answers

Nullo's avatar

One of Beck’s staunchest supporters is Goldline, but I don’t know anything else about it.
You might talk with an investing firm.

SeventhSense's avatar

Yes material gold- bullion and graded coins. Th hedge is the actual commodity and is readily transferable in any economic climate.

Nullo's avatar

@SeventhSense I thought that it was more or less illegal to actually, physically own a respectable quantity of gold.

SeventhSense's avatar

No people own plenty of gold. That was decades ago.

zen_'s avatar

Have cash on you when you go to the bank – never buy gold if you don’t have any money.

CaptainHarley's avatar

@zen_

Um… how can you buy gold if you DON’T have any money?? [ confused look ]

lynfromnm's avatar

I have a Gold Accumulation Plan through a broker. I can designate an amount of money each month, which purchases me gold at the rate on that date, and it is accumulated in my name at a warehouse in Delaware.

CaptainHarley's avatar

@lynfromnm

That would work, but I prefer the danged stuff right in my grubby lil palm! : D

SeventhSense's avatar

^Exactly^ And any government who doesn’t want you to collect gold, platinum, aluminum or zinc is not a government you want to trust anyway.

gorillapaws's avatar

Before getting investing with goldline you might want to read this article. They’re under investigation.

From the article: ”By selling gold at twice the melt value, the price of gold would need to double for consumers to break even on their ‘investment.’”

If I wanted to buy gold I would definitely do it through a legitimate broker and not a company that’s making coins.

CaptainHarley's avatar

And how is one to get in touch with “a legitimate broker?” ( Humor me! ) : D

gorillapaws's avatar

@CaptainHarley I would call around to several of the big-name groups like Schwab, Vanguard, etc. I would also talk to my local banker as well. I would think if you checked around enough you’d probably find someone you felt you could trust.

SeventhSense's avatar

@CaptainHarley
There is reasonable prices to be had at auctions and often below spot. Anyone who does strictly gold, silver bullion sales in not going to be the best source and will be expensive. You can even find great deals on eBay from sellers who want to get more than pawnshops are offering them but still below melt value. Granted it’s a bit of searching to find these deals but obscure ending time auctions or middle of the week, poor pictures etc. can often net some good deals. Some of the best is live auctions though. Look for ones that are not necessarily representing coins or gold only and will have less of a bidding audience.
Good Luck.

Aster's avatar

First, get educated on gold coins. Then look over the offerings on ebay.

CaptainHarley's avatar

Ok, I’ve been checking out eBay, but I’ve never used it before so it’s a bit confusing. For example, I find “GIGANTIC! Bavaria~Gold~Vi​ntage Items~Silver~Ol​d Coins,” which looks like a collection by a “Top-Rated Seller.” All offerings like this say the “Price” is $2,750.00. What’s up w/dat??

Aster's avatar

You really need to spend a lot of time looking at the various “Lots of gold coins” on there and learn about the coins. Then make sure the seller has a 100% positive feedback.

CaptainHarley's avatar

How do you find out that the seller has “a 100% positive feedback?”

Aster's avatar

it is listed on the far right hand side of the screen under their ebay name.

theglennnn's avatar

ebay for sure. i bought gold bullion from four different auctions. don’t buy coins, they seem to cost more per troy oz

gorillapaws's avatar

How do you guys test the purity of your ebay purchases to verify you’re getting what you paid for? There may be nicer margins, but it seems like you’re exposing yourselves to fraud.

theglennnn's avatar

i just check their profile before i buy. thousands of good feedback from like auctions is good enough for me.

gorillapaws's avatar

@theglennnn so you never test it after it arrives to verify it’s 24k? or not a lead slug dipped in 24k gold?

lynfromnm's avatar

@CaptainHarley if you have the lump sum funds, you can buy the bullion.Right now it’s over $1200 per ounce. Then you’re looking at adding the shipping costs and you need a place to keep it, such as a safe at home or a safe deposit box. If you want to provide me with your email addy I will gladly put you in touch and send you some websites you may find interesting.
I’m at lynfromnm@gmail.com

GeorgeGee's avatar

Financial advisers generally suggest that you don’t buy actual gold if you want to participate in the “gold rush,” but rather buy a GETF (Gold Exchange Traded Fund) to have the liquidity and protection from theft.
http://en.wikipedia.org/wiki/Gold_exchange-traded_fund
If instead you buy coins, keep in mind that safe storage costs money, and that you pay more than list when buying and get less than list when selling, and all of this eats away at any appreciation in value. And don’t assume that precious metals will only go upward in value. The ten year performance of gold from 1991 to 2001 was NEGATIVE %3.69
http://www.smartmoney.com/investing/short-term-investing/long-term-performance-means-zilch/

SeventhSense's avatar

@Aster
@CaptainHarley
You definitely have to do your homework though. With the collectible gold coins (Liberty heads etc) you have a lot of room to investigate and the value is far more than the melt value. For that reason condition, scarcity and mint come into play which leaves much room to find profitable deals. With the bullion by weight there’s going to be little difference ranging from a small profit by the seller to just plain greedy (or wasting his time because no one will buy it at that price.)

Yet even with the bullion after you find out the current rate per troy ounce I would filter recently listed /BUY it NOW always and snatch good deals as they arise. With gold there is a very strong and savvy buying audience so speed is of the essence.

CaptainHarley's avatar

I bought two of these: B.U. Gold Austrian 1 – Ducat

I intend to use the gold I buy as a hedge against run-away inflation, being on a fixed income and all. The smaller size of the coins makes them more negotiable for that purpose I think.

Comments??

gorillapaws's avatar

I was concerned about the same thing, so i bought some shares in EWA and EWL: the index funds of Australia and Switzerland, respectively. The nice part about these stocks is that they continue to produce things even if the dollar turns out not to tank.

The Australian dollar is historically very stable, they’re isolated from many international conflicts, and yet close enough to Asia to trade and profit from the recent boom in China and Indonesia.

The Swiss economy is based primarily on banking of course. They have historically been a reliable safe-haven during times of financial instability.

I should also note that I’m only 29, so I can afford to be riskier (even with the stocks I pick to hedge against the dollar). The thing I don’t like about gold (and other commodities) is that it just sits there and isn’t producing anything. Also the trust issue when buying on ebay would freak me out. Trusting reviews is very risky since there are companies that get paid to write fake reviews out there. That story applied to the App Store on iTunes, but what’s to stop stealth groups from bidding each other up on ebay?

SeventhSense's avatar

@gorillapaws
As far as stealth bidding: That’s far less common than people imagine and if you don’t bid more than the market value or what you are willing to pay there’s no fear. The market will always indicate anomalies and trends over time as well. If one is silly enough to pay ten dollars for a dollar bill under compulsion they shouldn’t be bidding at all. Decide ahead of time at auction either live or online exactly what your limit is and do not exceed it.

gorillapaws's avatar

@SeventhSense I was thinking more along the lines of companies creating fake auctions and bidding on them to artificially boost their seller ratings, and then using that in order to sell gold at a lower purity or otherwise deceive buyers. I have no idea how likely it is, but I know that fake autographs (even with “certificates of authenticity”) are rampant on ebay for example.

SeventhSense's avatar

@gorillapaws
Even if it would happen it wouldn’t hold water for long. Although I do think there are powerful and wealthy individuals who create and destroy markets for their own gain. The Hunt Brothers with silver back in the 1980’s are a perfect example. Although it hurt him in the end.

CaptainHarley's avatar

@gorillapaws

Well, I certainly won’t be risking very much on this gold investment. The cost of the two coins was under $500, which is less than an eighth of what I make each month, and we have no debts except on my Harley. : ))

gorillapaws's avatar

@CaptainHarley that’s good to hear. I just want to make sure nobody is going to screw you over. Perhaps I’m a bit too paranoid when it comes to buying/selling on ebay (one tends to hear about the scams and not about all of the millions of successful transactions). Good luck with your investments.

Aster's avatar

Is a gold coin less valuable than a non-circulated one in a plastic case and , if so, why?

CaptainHarley's avatar

@gorillapaws

Thank you! I assure you, I am very cautious about scams and such. : )

zen_'s avatar

@Aster Of course. Like anything – from a comic and action toy – to a coin or stamp.

gondwanalon's avatar

@CaptainHarley Hello Captain! Have you bought any gold lately? I’ve been buying gold since 2008. I’ve educated myself on this topic by going to coin shows, coin shops, internet and books. I buy mostly gold bullion coins but if I can get them cheap I buy old gold Swiss Francs, British Sovereigns and old U.S. gold currency. My number one rule is to NEVER pay more that 8% over spot melt down price. I buy my gold from coin shows, coin shops, ebay but mostly from APMEX (American Precious Metals Exchange). APMEX is vary fair and usually sell their bullion for around 2–4% over spot price and charge $20 for secure shipping and sometimes they have sales. By the way NEVER do business with “Goldline” as they tried to sell me some Swiss Francs for 68% over spot price. When I told them to cancel my order they suddenly offered to sell me the same coins for 12% over spot. I simply said that it isn’t going to happen. Anyway…

I’ve got a gut feeling that our U.S. Congress and President are going mess up our economy big time and soon. So today (7–30-11) I bought some more gold from a trusted ebay seller for $1692.40 per ounce (including shipping). OUCH! But that’s less than 4% over spot melt down price of gold so I didn’t do too bad.

By the way the same gold buying principles apply to buying silver.

If you have questions please let me know.

Lon

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