How to Invest in Gold
#1
This is a datasheet specifically for who wants to invest in gold. Portfolio allocation is out of this scope.

Why gold?
Nothing is 100% safe but with a trajectory of millenia, I would say it's a safe bet.

How?
First thing is choosing the gold. The best ones are the gold coins minted by a country's oficial mint. Some examples:

American Eagle
*Each Gold Eagle coin contains one troy ounce of .9167 pure gold that is combined with an alloy of 3% silver and 5.33% copper to enhance its wear-resistant durability
[Image: 2020-american-eagle-gold-one-ounce-bulli...00x600.jpg] [Image: 2020-american-eagle-gold-one-ounce-bulli...00x600.jpg]



Canadian Maple Lead
[Image: 2020-canadian-gold-maple-leaf-obverse-600x600.jpg] [Image: 2020-canadian-gold-maple-leaf-reverse-600x600.jpg]




Australian Kangoroo
[Image: 2020-gold-kangaroo-obverse-600x600.jpg] [Image: 2020-gold-kangaroo-reverse-600x600.jpg]




Austrian Philarmonic
[Image: Austrian-Philharmonics-Gold-Front.jpg] [Image: Austrian-Philharmonics-Gold-obverse.jpg]




Kruggerand (South Africa)
[Image: South-African-Krugerrand-Back.jpg] [Image: South-African-Krugerrand-Front.jpg]


They come in different weights (from 1/10 oz to 1 oz). In my personal opinion it is better to go straight to 1 oz coins since you're paying once for the mint.

TO BUY:
The price of coins are SPOT price + ~2%. The closer you get from SPOT, the better. We have some volatility now so premiums are around 4% above SPOT.

TO SELL:
Usually you can sell to the same place where bought. They usually pay SPOT + $25.

Take into account that the mentioned ounce is the TROY OUNCE (31.10 grams), not the american ounce (28 grams).

You can check gold price easily by just searching for GOLD SPOT PRICE. If you have an iPhone, just add GC=F to default Stocks app to have accessible quotes.

Why government minted coins?
- Quality: They're beautiful.
- Liquidity: They're easy to resell.
- Tax advantages: For some coins you don't have to declare sales. If I'm not mistaken you can sell for up to $40k worth of coinds without telling the IRS. 
- Standarized: It's difficult to make a fake. You don't need complicated tools to spot one.
- They're physical: YOU have them. You're not trusting somebody else to take care of them. You can sleep knowing they're safe.


How to spot a fake?
If you buy from reputable sellers you don't have to worry but let's say a private party is selling them for an attractive price? In that case you need to check the measurements of the coins. The easiest way is buying a tools like The Fisch (thefisch.com). You pass the coin thru the hole and if it gets stuck it's because the coins is fake; gold is dense so if you try to use another metal the coin will need to be bigger to weight 31.10 grams. The same Fisch comes with a "scale". You put the coin in the holder and if it doesn't flip it is because it doesn't weight the 31.10g. The closest metal with similar density of gold is Tungsten. They use for fake gold bars (putting Tungsten inside) but for coins it's easier to check by simply doing a scratch (border is a good place since it's less noticeable). I imagine you can use a simple scale and ruler to measure. Or find cheaper options.

What about numismatic (rare) coins?
Some "experts" will try to push you some rare/old coin that might cost a fortune since it belonged to Napoleon (or something similarly crazy). They might even show you a newspaper with a similar coin being sold at Sotheby's for a fortune. STAY AWAY. If they were a fortune the person would be selling it ASAP to such places instead of looking for you. Those numismatic have no liquidity, most likely tied to scammers and it might even be a fake since minting a coin hundred of years ago was way more rudimentary.

This information is a good start. I wish you guys success.
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#2
Bought a few hundred grams of bullion back in April. Price had already jumped considerably after pandemic started but my investment has considerably profited since then.

Where do you see gold going in 2021? Going to try to buy a more hundred grams next month as I imagine that after Christmas we’ll see another increase on spot price.

Silver IMO is the best investment but I know no silver miners.
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#3
(10-21-2020, 07:46 PM)MzungoMonster Wrote: Bought a few hundred grams of bullion back in April. Price had already jumped considerably after pandemic started but my investment has considerably profited since then.

Where do you see gold going in 2021? Going to try to buy a more hundred grams next month as I imagine that after Christmas we’ll see another increase on spot price.

Silver IMO is the best investment but I know no silver miners.

You don't need to know any silver miners.  I believe that the US mint still sells silver coins, however the cheapest and my personal favorite way to buy silver is what is called buying "junk silver coins," at those reputable shops that Yul was talking about.  What are junk silver coins?  They are retired dimes, quarters, half and full dollars that the US minted back when silver was comparatively cheap with a ratio of 90% silver and 10% copper.(I know that UK minted just about the same way, likewise with Canada)  They stopped minting silver coins for regular currency in 1964.  I like them because the combination alloy is a bit more durable than just raw silver,(as mentioned above with the gold eagles) and everyone knows about them so all that most shops do is see what the date is, and perhaps weigh the coins.  It is also pretty close to spot price given its ubiquitous presence in the coin market.  

In general, silver is a good choice for those on a budget and can't afford the 1/10 oz gold coins.  Problem with Silver is the weight, and bulk.  Not a problem if you are keeping it in a safe, but a problem if you are putting it into a go-bag.
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#4
I’m in the UK and thinking about putting a few k in gold.

Should I diversify in terms of type of gold? British sovereigns are tax free. Ordinary bullion bars you’d likely pay less premium but I guess you’d sacrifice some flexibility? As well as lose capital gains exemption (though realistically this would be a non-issue unless you made like 12k of profit).

What about ETFs for maximum liquidity? Say you had 15k to put toward gold. What about 5k coins at home, 5k bars held by a vault and 5k ETFs?

Also when would be the best time to invest at this point? From what I heard early January might be the best time.
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#5
(10-23-2020, 04:39 PM)Wannabang Wrote: I’m in the UK and thinking about putting a few k in gold.

Should I diversify in terms of type of gold? British sovereigns are tax free. Ordinary bullion bars you’d likely pay less premium but I guess you’d sacrifice some flexibility? As well as lose capital gains exemption (though realistically this would be a non-issue unless you made like 12k of profit).

What about ETFs for maximum liquidity? Say you had 15k to put toward gold. What about 5k coins at home, 5k bars held by a vault and 5k ETFs?

Also when would be the best time to invest at this point? From what I heard early January might be the best time.


Remember that an ETF is a security that are usually redeemable in currency and not a real asset, which is both good and bad.  I am not against adding it to a retirement or stock portfolio if that is what you want to do within these account, but there is a difference in owning an ETF and owning physical gold.  Similarly, it is as different as owning property and owning an REIT.  Over here in the US there are all kinds of commercials from gold dealers who sell a service where they take money from your retirement account and invest in gold.  I would admit that I have never looked into how they exactly do it, as I have too many questions as to how it works and prefer other vehicles of ownership, but I don't see much of a difference between what they are advertising and buying into a gold ETF.  

This goes to the main question as to what you are buying Gold for.  Are you buying gold as a hedge against inflation, Zimbabwe or Weirmar Republic style currency collapse, total societal collapse insurance, to retain wealth, or something else?  All of those scenarios vary in what will be available to you, and while gold works in all four, some vehicles of ownership are better than others.  The diversification above is not bad, honestly, IF that is what you want to invest in Gold, and you like that allocation.  You can mess with allocation percentages if you feel one way or another.  

As far as when it is a good time to buy gold, a general rule that I heard long ago was that during the winter months, you have Christmas and New Years where many people are getting engaged, or buying gold for their spouse during that time.  Not to mention some other festivals in the east where buying gold gets an uptick, so January is purported to not be the best of months to buy gold.  August was purported to be the best time of the year, but take all of this with a grain of salt as other market factors always plays a bigger role than seasonal factors.  That is like chasing the stock market from one day to the next.
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#6
(10-21-2020, 07:46 PM)MzungoMonster Wrote: Where do you see gold going in 2021? Going to try to buy a more hundred grams next month as I imagine that after Christmas we’ll see another increase on spot price.

Silver IMO is the best investment but I know no silver miners.

Hard to say. If the economy tanks, demand for USD will increase short-term since people have to pay bills.

Having gold is useful long-term so I think it's a great hedge against inflation. Silver is good but bulky, thus having to buy larger quantities. If you want to sell them in the future, it's different shipping a single gold coin compared to a heavy box of silver.

(10-23-2020, 04:39 PM)Wannabang Wrote: Should I diversify in terms of type of gold? British sovereigns are tax free. Ordinary bullion bars you’d likely pay less premium but I guess you’d sacrifice some flexibility? As well as lose capital gains exemption (though realistically this would be a non-issue unless you made like 12k of profit).

What about ETFs for maximum liquidity? Say you had 15k to put toward gold. What about 5k coins at home, 5k bars held by a vault and 5k ETFs?

Also when would be the best time to invest at this point? From what I heard early January might be the best time.

Some people like to buy different coins since they're beautiful but I would choose the ones based on price (the lower premium, the better) since they're all gold. You can also choose based on tax advantages.

I would avoid gold bars. Like I said, they're easier to make a fake (putting tungsten inside).

I would also avoid ETF. They're practical but it's better to trust yourself instead of some firm. You never know if there's another Madoff taking care of your money. As for liquidity, I don't know how's the market outside USA, but here it's pretty liquid. They pay you SPOT + a little extra.

Can't tell you when to invest since it would be a guess. If you have savings, keep 5% to 10% of your portfolio in gold. Having 6 months of your monthly salary in CASH for emergencies is important too. You lose to inflation but it's not much in a developed country. And having cash gives you chances to take advantage of opportunities that appear every now and then.
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#7
Mining companies are another way to get exposure to gold. Look at Barrick Gold (ABX) and Newmont Mining (NEM)



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#8
I threw a couple of Gs into a silver ETF (PSLV) last March, it’s still up over 30%.
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#9
(10-05-2020, 06:53 PM)Yul Wrote: - They're physical: YOU have them. You're not trusting somebody else to take care of them. You can sleep knowing they're safe.

As always, one counter-point on this: If something happens to your physical coins, you're boned. The guys who lose a hard drive with $500m of Bitcoin on it always end up in the news, but there are far more out there who lose $500k in gold coins and never tell anybody.

Firefighter theft, among many other things, happens. It's also not unknown for people to develop dementia or other problems and just forget they have it or where they put it. There's the chance, however slim, that some emergency happens and you can't get back to them. Think of the lockdowns or a wife figuring out where they and stealing them before she serves you with divorce papers. Bank safety deposit box thefts can happen.

It's all cool, but people new to this kind of thing should remember to think ahead and think about the trade-off risks that come between safety and secrecy. No free lunches, etc.

(10-23-2020, 04:39 PM)Wannabang Wrote: Should I diversify in terms of type of gold? British sovereigns are tax free. Ordinary bullion bars you’d likely pay less premium but I guess you’d sacrifice some flexibility? As well as lose capital gains exemption (though realistically this would be a non-issue unless you made like 12k of profit).

The tax treatment of these is really interesting, I did not know about this. It says "for UK residents", I wonder if you need to be a legal long-term resident or just tax resident? Could be an interesting strategy in there for somebody building a long-term escape plan.
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#10
I have a stack of gold bullion in a safety deposit vault overseas. But even as someone who holds physical buillon, I highly recommend that guys hold their precious metals in allocated, closed-end funds the type of which are offered by Sprott.

Unlike the GLD exchange traded fund or the IAU, Sprott’s PHYS fund is backed by actual, physical gold.

Bullion has storage fees, insurance costs, and other risks (if you hold them) and you cannot easily liquidate them into cash when you need to. With Sprott’s funds, you can.

I also recommend holding a basket of gold, platinum, palladium, and silver. Buy a little each month so your purchase costs remain averaged.
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