Tried to buy gold and hit some problems...

hope_full · Heavy Crude Joined: May 27, 2008 Posts: 254

Having spent way too much time reading way too much stuff about Peak Oil and its many side effects, I decided it's TIME to sink a few dollars into gold. I called our broker (big name national company deal) and asked, "how do I buy gold?"

First, the fellow tried to dissuade me from buying gold. He said that gold is too high right now and that the price will go down and it'll be years before it goes up and why don't I just add some money to our mutual funds because that's the best place to invest right now.

Yeesh.

He referred me to their massive website and it was so busy and confusing and focused on stocks and bonds and I didn't learn much there. So today, I called the 1-800 number (listed on the website as their "futures traders") and talked to a nice young man.

He suggested GLD which is traded as "a regular equity account" (I know nothing about all this) and he said this might be a good venue if I really want to buy gold. NONE of these stock-broker types think I should buy gold...

So my question is, should I buy real gold and hide it under the bed? Or Krugerrands that I can occasionally visit at the bank's vault in the safe deposit box? When folks speak of buying gold, what are they really talking about? And do you really think gold can be used "to pay debts public and private" when our cotton-fiber dollars lose value?

I'm a little unsure about buying another stock (GLD) because we've already got all our eggs in a few mutual fund baskets. If I were queen of the world, I'd sell all that and get heavily vested in gold, but the S/O says no.

I'd be very grateful for all responses. I know so little about this and I'd be grateful to read a few links, if anyone knows some to suggest. This is all new territory for me.

HF

heroineworshipper

Everyone knows about GLD, so yes, it is a bad investment. It also has the 1% commission. True doomers are buying gold coins at the premium & storing them in their $3000/month apartments.
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Cashmere · Light Sweet Crude Joined: Mar 27, 2008 Posts: 1971

Walk into coin dealer that sells bullion - every sizable city has one - for spot + 20-40 bucks you walk out with a 1oz coin. In your pocket. Not some electronic credit on a monthly statement.
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Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.

RonMN

IMO I would say buy physical gold & keep it some place safe...NOT a safe depost box at a bank (google "Gold Confiscation" it happened in 1933 & may happen again).

If you can find physical silver, I would buy equal dollar amounts of gold & silver (50 oz. silver = 1 oz. gold).
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smallpoxgirl · Moderator Joined: Nov 08, 2004 Posts: 6278

Well...I think anyone that can answer your question for sure would probably be very rich.

Lot's of folks here will tell you to buy Gold (or silver) and hide under your bed. The principal advantage to this strategy is that there is a whole lot more paper gold floating around than actual metal. If the system ever collapses, people could find themselves holding paper gold that becomes worthless. If your broker goes belly up, and SIPC isn't able to cover you, then your shares of GLD could become worthless.

The down side to holding physical metal is that there's a LOT of volatility in the metals market right now. If you buy physical metal, you've bought your ticket on the roller coaster, and there's not much you can do but hold on and ride. You can't readily move in and out of the market. I got burned on that a few months ago, so I'm more inclined to hold them right now in a way that I can buy in when they go up, and get out when they go down. GLD is an exchange traded fund that is invested in gold futures. If you are already in the stock market, it's an easy way to add metals holdings to your portfolio and trade it in your standard brokerage account.

Alternatively you could trade an unallocated pool account through somebody like Kitco. It would allow you to escape some of the downturns and would potentially be easier to convert to physical metal at some point if you chose to do so. Warning there is that Kitco tends to be overpriced on physical metal, and if some calamity beset Kitco such that they went bankrupt, you'd probably loose everything.

So...it really I think the physical metal vs. paper gold discussion is a matter of sacrificing present day instability in order to buy apocalypse insurance.

I personally would stay away from gold futures. The standard futures contract is for 100 ounces of gold. Over the last month, gold has ranged from about $950 per ounce down to $850 per ounce. That's a ten thousand dollar swing on a single contract. I suspect that if you had the money to tolerate a $10,000 swing in your investment with equanimity, you wouldn't be posting the question here.

Good luck. It's a brave new world. Smile

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I can hear the flowers a-growin in the rubble of the towers.
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I hear babies quit their crying.
I hear soldiers quit their dying, one and all." - OCMS

3aidlillahi

No broker is going to tell you to buy physical gold. Why? They can't make any commission off of it. Not to mention, they don't want money going out of the US dollar and into gold. They want to keep the floodgates from opening and causing a free-fall in the US dollar. It's like a Hummer dealership pointing the way to the bike path or scooter store. Not gonna happen.

Just google your city and "coin dealer" or "coin shop" and you'll likely pick up a few nearby. Other options which are more limited but better deals are coin shows. Look for those as well. Lots of traders which keeps prices down, from what I've heard.

I'd also advise you to never disclose where you keep your bullion and always take physical. Much of the market is manipulated because of paper or electronic metal which is useless. Here are the oft-quoted 10 commandments:

allenwrench · Intermediate Crude Joined: Apr 23, 2008 Posts: 893

joeltrout · Light Sweet Crude Joined: Sep 19, 2007 Posts: 1317

Buying gold right now is a tough call, physical or electronic. If you would have bought it a couple months ago you would have wasted $120/ounce.

It is a tough choice to invest in gold which is very volatile and dependent on a ridiculous number of variables that are not controlled by anyone.

It really doesn't make sense to purchase gold by the ounce because of commissions and the fact you can only divide a gold coin into so many pieces. When I purchased silver in college I would buy bulk which is more upfront money but the commissions are much, much lower saving you money.

But then you run into the problem of would it be better to spend $30,000 on gold or on property/other preps. There will be a point in time where a loaf of bread might be more valuable to some people than an ounce of gold. You cant eat gold if you are starving.

joeltrout

3aidlillahi

vision-master

I'd like to buy a new pair of shoes.

Ain't they more important, huh?

The hangers-on of status quote. Razz

Disgusting.

Money

KingM

You can't think of it as an investment. In the best case scenario you'll be putting your money into a non-performing asset. You've got to think of it as an insurance policy. Just buy a few coins whenever you can, being careful not to go off the deep end, and it can be your "smuggle me out of the country" money if TSHTF.

threadbear · Expert Joined: Jan 22, 2005 Posts: 7738

You never ask your broker anything. You direct them, and let them know you are willing to take your business elsewhere if they interfere with your wishes. I went through this with my broker, who, after much resistance, invested my money in an Evergreen Precious metals Fund. I doubled my money in a year. That was a few years back.

YOu can buy physical gold from a bank, and allocated silver certicates as well.

Denny

Most people believe you should have some physical gold and silver.

A good way to buy that is eBay. US double eagles for instance of other variations. Just don't get into a bidding frenzy, put in an advance bid at a price you'd be happy with and let it go. It may take you eight tries, but in the end you'll be happy, not ticked off that you overbid.

I have seen the gold coins go for not much above the physical value of the gold inside them.

It is interesting to peruse all the various old coins that exist on Ebay.

dunewalker

Investing in any form other than physical precious metal is investing in the future of a system that you're already concerned with the fragility and imminent collapse of, or you wouldn't be here. To do so would be a contradiction in perception. The function of physical purchase and possession of pms is to preserve wealth in the face of economic collapse, as mentioned by previous posters. A compromise with your s/o would be to retain the mutual fund investments that you mentioned, and additionally purchase some silver rounds to begin with, to get your feet wet. Once that feels ok, then consider a few ounces of gold if you must. As mentioned in the book on monkeywrenching: "act alone, and never tell a soul". If possible, find a coin dealer who will take cash. Choose a secure spot to stash this stuff ahead of time, as well as a plan to get it there unobtrusively. Better to divide it between two places.
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