Author Topic: Physical gold (eagles, kugerrands, maple leafs)  (Read 2267 times)

Drifterrider

  • Handlebar Stache
  • *****
  • Posts: 1122
Physical gold (eagles, kugerrands, maple leafs)
« on: August 04, 2017, 08:13:20 AM »
Do any of you hold gold?  Did you make a wise choice?  How much above spot are you paying?  Do you consider it an investment for future value, a hedge against inflation or it just gives you a "warm fuzzy"?


L.A.S.

  • Bristles
  • ***
  • Posts: 396
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #1 on: August 04, 2017, 10:04:57 AM »
Not gold, but earlier this year I bought two modern silver eagles (1oz fine silver $1 face value), and took physical delivery.  One is a business strike and I bought it through Amazon because I was curious, had a gift-card, and couldn't think of anything else to buy.  The other is a proof I bought directly from the U.S. Mint.  The business strike I definitely overpaid from spot price by about 30-40% (spot of silver was about ~17 and I paid $23).  It's my understanding that spot price is quoted for unfabricated fine raw bullion for physical delivery at a certain place -- so to buy a fabricated coin (gold or silver) from a dealer and have it shipped you'll pay over spot to account for the fabrication costs, the dealer margin, and the shipping.  I think the mark-up is higher percentage wise for silver but dollar wise for gold. 

The proof also was at a significant margin over spot -- It was something like $58 for it including shipping.  But, the proof silver eagle is amazingly gorgeous.  It has a mirror finish in the fields of the coin, the coin came in a plastic capsule, and it came in a felt box.  I keep it on my desk at home as a decoration.  On the obverse, the silver eagle has the Adolph Weinnmann walking Liberty motif, which i think is stunning.  The modern gold eagle uses the Augustus Saint-Gaudens standing liberty motif which is also easy on the eyes.

Will I buy another coin? Who knows.  Certainly not for investment purposes -- mostly just to goof around and have some "prized possessions."  If I did get another one, I'd probably get a pre-1932 Saint-gaudens double eagle or a modern 1oz gold eagle since I want to see the Saint-Gaudens standing liberty motif IRL... or the mint did a modern strike of what is essentially the original 1907 double eagle in 2009 called the 2009 Ultra-High relief double eagle -- that could be nice to possess.  I believe all of these would trade at a margin (sometimes significant) over spot due to the "numismatic value."

I would personally always prefer U.S. coins over foreign, and I would avoid anything that is a private mint offering.

 (Note: The eagle is historically in the U.S. the designation of a coin $10 in value -- but, modern 1oz silver eagles monetized at $1, and modern 1oz gold eagles at $50. Modern American gold eagles are also struck in fractions of an oz.).
« Last Edit: August 04, 2017, 10:21:47 AM by L.A.S. »

seattlecyclone

  • Magnum Stache
  • ******
  • Posts: 3987
  • Age: 33
  • Location: Seattle, WA
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #2 on: August 04, 2017, 10:32:49 AM »
I don't really believe precious metals to be a good long-term investment. At best, they'll keep up with inflation pretty well. At worst, we start mining gold-rich asteroids in 20 years and the price comes crashing down.

My father-in-law, on the other hand, does believe precious metals are a good long-term investment. He's a bit of a doomsday prepper though. He has given us a few coins that we hold on to out of consideration for his gift and the spirit in which it was given, but we don't plan to buy more.
I made a blog! https://seattlecyclone.com/

The Roth IRA was named after William Roth, who represented Delaware in the US senate from 1971-2001. "Roth" is a name, not an acronym. There's no need to capitalize the final three letters.

Koogie

  • Stubble
  • **
  • Posts: 173
  • Location: Toronto-ish
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #3 on: August 04, 2017, 10:42:46 AM »
Lots of people believe in the "Permanent Portfolio" of which precious metals usually makes up 25%

http://www.investopedia.com/ask/answers/09/permanent-portfolio.asp

I personally don't but that is another story.

I do own some gold bullion (about 10 ounces)  I also used to own about 1400 ounces of silver bullion but sold it.  I kept the gold for some reason.  Sh*ts and giggles mostly.   Or a small nod to extreme diversification.

Fermentation is a miracle of nature.
Distillation is a miracle of science.
Better living through Science !

Semi-ERd: September 2015 at 42.

CrispySub

  • 5 O'Clock Shadow
  • *
  • Posts: 23
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #4 on: August 07, 2017, 12:45:21 PM »
I hold physical gold, silver, and other precious metals.

A few years ago, I decided that I needed a collecting hobby of some type to make it easier for friends/family to buy a gift for me.  Otherwise, I am stuck with random items I do not want and they insist on giving me something.  So I chose coin collecting.  Coins are easy to transport, they build wealth, relatively easy to liquidate, and vary in value for any gift giving occasion.

The next step up from there was bullion. My degree is in Materials Engineering, so I have a good understanding of engineering uses of materials. Because of that, I see the value of Palladium, Platinum, Silver, Gold, Rare Earths, etc. as a commodity/non-renewable resource whereas most people look at the materials in terms of "stored value" or "traditional money".

I am long on physical metals. I am not a big fan of buying electronic gold or ETF's with management fee's etc. You can find near spot on Ebay for all precious metals at times.  You can find below melt value on sterling silver on Ebay, Craigslist, Rummage Sales, etc. a decent chunk of the time.  In fact, my best 'value' buy was an entire drawer of silverware at an estate sale for $3.  The melt value of the silver pieces (which were buried amongst the silverplated pieces) was around $90.

The reason I am long is 3 fold:
1) Most common reason: people cherish gold for historic, intrinsic, artistic, numismatic value. This could make it a collectors item.

2) The supply of precious metals is limited and the usage (with the exception of silver in photography) is expanding. Satellites require gold components. Space ships require gold components. Submarines require platinum components. Many modern and growing technologies consume a little bit of precious metals. As big ticket items grow in the future, demand should rise.  So it is my belief that technology will continue to grow in our lifetime and the next and the next.  Space mining is not feasible within our lifetime at current projections and definitely not within the next 15 years.

3) The future. Earth is expecting 10 billion people by 2050.  In 30 years, there will be 3 billion more people. These people will have interests per reason (1) (this is also why I like land away from a coast/sea level rise) and demand more technology.  Right now, there is virtually one cell phone per person on this planet (and only around 2-3 billion estimated phone users).  Most people get a new phone within 2 years and very few actually recycle the old phones. It is estimated that one cell phone contains around 0.001 ounces of gold (plus additional metals).  There is less than 1 ounce of gold for every person mined in human history (around 6billion total ounces). Just one cell phone with current technological consumption for the additional 3 billion people would result in 3million more ounces of demand. If recycling doesn't occur, then every two years, 10 billion people will need 10 million more ounces of gold that has a finite supply. 

And that is just one of the dozens of products this applies to for only one of the precious metals.  Nations are building more submarines, private ventures are building more satellites and space ships, more and more solar systems use some type of precious metal (to include silver paste), gold is used in beauty projects, virtually all advanced electronics, jewelry, some glass on high rise buildings, in paintings/rugs/artistic work and dozens of other uses beyond its "financial status".

In short, I am long on precious metals due to basic economic conditions of supply and demand.


SeattleCPA

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 58
  • Location: Redmond, WA
    • Evergreen Small Business
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #5 on: August 07, 2017, 01:52:41 PM »
I don't own any gold, but I think there's pretty good logic behind holding gold in a portfolio that's attempting to use modern portfolio theory...

Here's a nice write-up from William Bernstein, for example: http://www.efficientfrontier.com/ef/0adhoc/harry.htm

You can test how this gold impacts a portfolio using PortfolioVisualizer or PortfolioCharts

P.S. For what's worth, I use the Swensen "Unconventional Success" asset allocation, which is another portfolio the reflects modern portfolio theory
My blog Evergreen Small Business
My free downloadable ebook: Thirteen Word Retirement Plan

2Birds1Stone

  • Magnum Stache
  • ******
  • Posts: 3212
  • Age: 30
  • Location: New York
  • Peter Gibbons
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #6 on: August 07, 2017, 02:02:46 PM »
I have about 8% of my portfolio is physical Ag/Au.

I bought it because I was uneducated back in 2012-2013 and was convinced that quantitative easing and loose monetary policy would create rapid inflation, from which Ag/Au would benefit from.

I bought it was 50% of my net worth at the time, when prices plummeted I doubled down.

It's still way off of what I paid, and I'm still down about 25-30% from the prices I paid. I keep it as a reminder to avoid emotional purchases in the future. 
"A small house can hold as much happiness as a big one." - Fortune Cookie

29 Months till FI - Stop by, or stay a while.....
https://forum.mrmoneymustache.com/journals/fire-by-thirty-five-chronicles-36-months-till-sabbatical!/

Mr. Green

  • Handlebar Stache
  • *****
  • Posts: 1437
  • Age: 34
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #7 on: August 08, 2017, 10:02:45 AM »
I have about 8% of my portfolio is physical Ag/Au.

I bought it because I was uneducated back in 2012-2013 and was convinced that quantitative easing and loose monetary policy would create rapid inflation, from which Ag/Au would benefit from.

I bought it was 50% of my net worth at the time, when prices plummeted I doubled down.

It's still way off of what I paid, and I'm still down about 25-30% from the prices I paid. I keep it as a reminder to avoid emotional purchases in the future.
That is a fantastic reminder because you can look at the physical object in front of you and say, "Fuck!" Why more effective thandigital bits on the internet.
FIRE, Take Two.

theolympians

  • 5 O'Clock Shadow
  • *
  • Posts: 53
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #8 on: August 12, 2017, 10:15:27 AM »
I like the idea of gold and silver sitting in a safe but have reservations, to say the least. My father is a big gold/silver guy having lost a boat-load of cash in 2008-09 (yes, when the market tanked he sold everything locking in his losses. Like many people he believed the market should act like a savings account and should go up and a up.) He now buys gold and silver seemingly at random, meaning I don't know how he tracks what he has, or its value on any given day. He buys the "collector" coins, proofs and the like which I find more dubious as an investment.

He peroidically sends his grandkids some eagles for christmas. Silver is around $15 of so an ounce, the eagle (with an ounce of silver) costs $99. The "mints" literally make tens of millions of the "proofs per year. Which leads to more concerns (scam!!!!).

How do you sell those things when the need arises? My father mentioned coin stores. Oh, so they mark down from market rate, which is really whatever they say it is. Assuming "precious metals" go through the roof, a bunch of people will off load at the same time, depressing the value. I wonder if you would ever get your $99 back........

Bullion might be better, you can you track its value daily. With that, how do you unload it without  getting taken to the cleaners by a shop owner?  How do you unload the stuff?

L.A.S.

  • Bristles
  • ***
  • Posts: 396
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #9 on: August 12, 2017, 04:13:54 PM »
I like the idea of gold and silver sitting in a safe but have reservations, to say the least. My father is a big gold/silver guy having lost a boat-load of cash in 2008-09 (yes, when the market tanked he sold everything locking in his losses. Like many people he believed the market should act like a savings account and should go up and a up.) He now buys gold and silver seemingly at random, meaning I don't know how he tracks what he has, or its value on any given day. He buys the "collector" coins, proofs and the like which I find more dubious as an investment.

He peroidically sends his grandkids some eagles for christmas. Silver is around $15 of so an ounce, the eagle (with an ounce of silver) costs $99. The "mints" literally make tens of millions of the "proofs per year. Which leads to more concerns (scam!!!!).

How do you sell those things when the need arises? My father mentioned coin stores. Oh, so they mark down from market rate, which is really whatever they say it is. Assuming "precious metals" go through the roof, a bunch of people will off load at the same time, depressing the value. I wonder if you would ever get your $99 back........

Bullion might be better, you can you track its value daily. With that, how do you unload it without  getting taken to the cleaners by a shop owner?  How do you unload the stuff?

This is false.  A silver eagle proof direct from the Mint is $54 (plus $5 for economy shipping per order) -- still a good margin over spot price but it's not $99.

https://catalog.usmint.gov/american-eagle-2017-one-ounce-silver-proof-coin-17EA.html

As to selling them, check around for websites that buy and sell coins.  As longs the coins are in their original packaging and are not damaged they should make you an offer to buy over spot.  It will not be the same as what you would pay to buy, but thats the spread and how they make money.  If they become badly damaged or if all else fails, you should be able to sell them right around spot as scrap silver to just about any jeweler.

Really though, I don't see the harm if he wants to send a shiny coin to his grandkids each year.

theolympians

  • 5 O'Clock Shadow
  • *
  • Posts: 53
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #10 on: August 12, 2017, 05:52:53 PM »
There's no harm in giving the kids shiny coins, it is that some people consider that investing; which it is not.$54 or $99, you are still paying way over the value of the metal. It is unlikely you will get your money back.

SuperSecretName

  • Stubble
  • **
  • Posts: 212
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #11 on: August 12, 2017, 06:22:38 PM »
I actually just sold the last of my physical coins.  I called to renew my renters insurance, and gold isn't covered without an appraisal.  Too big of a risk keeping around.

Nothing like holding an ounce of gold in your hands though.  It's magical.  Real money.

If you are looking to buy, actually check ebay.  There are legit, major companies (apmex, JMBullion) selling there for low premiums, and you can pay with a credit card.

chasesfish

  • Handlebar Stache
  • *****
  • Posts: 1798
  • Location: Texas
    • Years in the making, I created a journal!
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #12 on: August 13, 2017, 05:37:46 AM »
I appreciate them as a coin collector, but have a tough time buying them over an equivalent amount of VTI.
Counting down the days until I Stop Ironing Shirts

I occasionally Blog

CrispySub

  • 5 O'Clock Shadow
  • *
  • Posts: 23
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #13 on: August 14, 2017, 12:07:55 PM »
Instead of selling bullion to coin shops, you could sell to the big companies like APMEX, JM Bullion or Providential online.  They have competitive buy back prices and free shipping. 

At the time of this post, silver is at $17.20 and they will buy generic silver for $16.70+ from you (some have higher premiums, like ASE) with free shipping.

And for buying, JM Bullion has a buy 10oz at spot price with check once in a life time. https://www.jmbullion.com/starter-pack/ 


As for the other comment about $99 proofs, I can attest they do exist.  They are often sold by a variety of dealers as a "West Point rare Blue label limited edition MS-70 proof" or the likes.  "Guaranteed" collectors items to "appreciate" in value...

dcamnc

  • Pencil Stache
  • ****
  • Posts: 515
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #14 on: August 14, 2017, 01:30:51 PM »
I do have a percentage of my taxable account in gold. For my gold allocation, I'm 50% physical gold, and 50% gold etf. I only buy full 1 oz coins as they usually have less premium over spot than fractionals, are a little easier to keep up with accounting-wise, and are generally a little easier to sell.

1962colreb

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #15 on: August 15, 2017, 07:24:48 PM »
I used to buy silver dollars from a jeweler.  Most weren't worth more than the spot price,
but at the time I could sell them on eBay and make an average of $5 profit per coin over
what I paid after subtracting shipping costs.  Never scaled it up to make serious money though.

daverobev

  • Magnum Stache
  • ******
  • Posts: 2706
  • Location: Canada
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #16 on: August 16, 2017, 11:21:34 AM »
I have some silver and a very little gold. Silver/gold price kind've shows silver is historically the one to buy now, I think.

Hmm, less than 1% of my NW? As a real "oh, fuck, I need to get my family out" type thing, or a trading thing until you can stabilise.

Or, yeah, I just like shiny pretty things. Some of the Britannia coins are lovely. I particularly like



I'd love to get a full, proof 1Oz gold one!
Amex Cobalt - 10x points at grocery stores in December!! This is amazing!

Great Canadian Rebates good extra sign up bonuses on credit cards, among other things.

Tangerine Orange Key: 48322202S1. I prefer Simplii (was PC Financial) to Tangerine, but you get $50 for signing up (and so do I).

PayTM - pay bills with your credit card. Like Plastiq, but currently a lot of stuff that Plastiq charges for is free. My code is PTM9691063, pay a $50 bill and we both get $10 in PayTM cash which you can use on the next bill. Good for min spend, at least.

dcamnc

  • Pencil Stache
  • ****
  • Posts: 515
Re: Physical gold (eagles, kugerrands, maple leafs)
« Reply #17 on: August 16, 2017, 05:29:13 PM »
I have some silver and a very little gold. Silver/gold price kind've shows silver is historically the one to buy now, I think.

Hmm, less than 1% of my NW? As a real "oh, fuck, I need to get my family out" type thing, or a trading thing until you can stabilise.

Or, yeah, I just like shiny pretty things. Some of the Britannia coins are lovely. I particularly like



I'd love to get a full, proof 1Oz gold one!

The British coins are beautiful. They have the best looking coins imo.