The Smart Way to Buy Gold?

[Mike 03]

In the past I've had luck with gold stock, but I'm beginning to worry that it's a better idea to purchase actual hard gold, but I have no clue how to do this.

Is the smart thing to buy coins? From who? What kind of coins?

Is the smart thing to buy bullion? From who?

Also, how will it be delivered, and how can I trust that it will be safely delivered?

Store it at my home, hide it, or put it in a safety deposit box?

[TheWraith]

1. Honestly, gold isn't that spectacular of an investment.

It holds value well, yes, but that's true also of a bank account.

[Zynx]

2. And the idea that it is a proxy for other prices is also flawed.

Commodity prices outside of gold have collapsed, while gold has increased. This theoretically should not have occurred. There is the thesis that it is the only "safe" asset class left, but history tells us that gold prices are extremely volatile. There's little reason to believe that the high gold price now is any better fundamentally supported than any other commodity price was. I will point out most commodities have fallen further than most stocks.

[Mike 03]

3. You mean cash? Just hold cash? I would believe that, but I'm having a hard time

convincing others of this.

[TheWraith]

20. US bank accounts are insured by the government up to $100,000.

So even if your bank were to go belly up--not a major risk as long as you stick with smaller, non-investment banks--then your money would still be safe.

Gold on the other hand is a commodity, and subject to the swings in value that that can bring with it. It's high right now, but that is usually a sign that it's not a good time to buy in. Somebody who'd bought gold when it was at $250 an ounce would be golden, not to make a pun, but what happens if it retreats back to something like $800 from its current $986? When you see the price of something quadruple in just a few years, a lot of people are going to suspect that it's a speculative bubble, like the price of housing and oil were recently, as well as less noted commodities like rice, wheat, etc. Consider, how much potential upside there is versus how much downside. Is it more likely that gold will go to $1500 an ounce, or back to $750?

If you really want an investment with a better return, but one that still offers the security of cash value, most banks also offer certificates of deposit: you basically lock up your money for 3 months, 6, a year, and the bank will give you well above the standard savings rate.

There is one other option, which is, crazy as it sounds, the stock market. It's like the old saying: when there's blood on the streets, buy property. We're either at or approaching the most pessimistic stretch of the recession, meaning stocks are about as low as they're likely to go. GM is a good example. It's currently sitting at $1.77 per share. Compare that to a little over a year ago, when it was peaking near $29 per share. It's the same thing as with gold: is it more likely to go down, or to go up?

I'm not an investment expert, but I'll say this: if you're talking about money that's critical to your future, then you can't be too safe with it, and a good savings account or certificate of deposit are about as safe an investment as you can get. However, if you're a little risk-tolerant, there's other options.

[sandnsea]

6. Oh yeah, $252 to $1002

That's just a terrible investment.

Gold is still the best place to be right now. It will go up in value because there's nowhere else for investors to go.

[Telly Savalas]

17. In other words, there's currently a speculative bubble in gold.

When investors find other places to put their money, the price of gold will crash, yes?

[sandnsea]

18. It's been going up since 2000

And just like every other investment vehicle, it runs in cycles. So, duh, when some other segment of the economy improves, people will move their money out of gold. But it has been a great investment for years now and is still a safe place to put money until the financial market gets done crashing.

[TheWraith]

22. Which is also how long oil has been going up. And all the other commodities.

All of which are conveniently tied to the Gramm-Leach-Biley Act.

[sandnsea]

24. Oil was $50.04 in 2005

People have been settling in gold at a regular pace since 2000. Probably because of the sporadic nature of the rest of the markets.

[girl gone mad]

28. Have you heard about the "gold parties" people are hosting in their homes?

Like tupperware parties, but everyone's hawking grandma's gold bracelet and the ex's wedding ring.

If that isn't a sign of a speculative bubble about to burst, I don't know what it.

[zagging]

7. Not exactly true

Gold's historic buying power remains fairly steady, while the dollar's buying power fluctuates.

[TwixVoy]

23. It is not meant to be an investment

people who buy gold right now are trying to preserve what wealth they have in the event the dollar collapses. In such an even gold could still be converted to whatever currency is strongest after.

[Oregone]

4. Some pawn shops specialize in coin and bullion...theyll charge small premiums per ounce...

Buy one ounce coins when you can afford them if you wish. I would never buy now...so expensive. Last time I bought it was 380 an ounce or so....Silver was like 5 bucks an ounce (turned out to be a much better investment when I cashed in, with near 100% return).

[zagging]

5. If you decide to do it

Kitco.com is a good place to start. You will pay coinage and spot unless it's bar. They will deliver it to your door insured. I've done it a number of times. I don't keep it in a safe deposit box. It's well hidden. During the depression FDR confiscated all the gold and you could not open a safe deposit box without an IRS agent present.

Good luck.

On edit: I have bought American Eagles and Canadian Maple Leafs in 1oz and 1/10oz coins.

I...uh...gave them away to...uh...charity in case any G-men ask. Sorry, I didn't get a receipt for my donation.

[Wiley50]

9. kitco was sold out of bullion coins last time I looked, unless you have $300,000 for a bar

Not that I a disabled person living on SSI is in that market

But I buy a Powerball ticket every week and dream

so investments in hard assets are something I sort of keep up on

But, you're right. In normal times kitco.com seems to be the place to go

They're just all sold out of this years allotment of new bullion coins

[zagging]

12. Damn. I haven't bought any in over two years.

I had no idea.

I suppose the OP could talk to any stock broker and get a source for coins.

I know that silver has recently had a premium over spot. Gold must have one, too.

[sendero]

10. One thing for sure..

.. a "safe" deposit box is the LAST place I'd put anything of value.

[zagging]

13. It's good for papers and maybe some heirlooms

Definitely not precious metals, coined or bar.

[movonne]

15. Why isn't a "save deposit box a good thing???I thought that is where

you went to keep things safe...

[sendero]

19. Safe from what?

Not the feds, not the bank. Better off in your mattress.

[TheWraith]

21. And in the event that the economy implodes, what are you going to do with that gold?

Sell it? Who's going to buy it? Sure as hell you won't be using it at the grocery store or the gas station. In the '30s, there was a long history of using gold directly as currency. Not so anymore.

[zagging]

25. Gold simply has value

Humans value it. Throughout human history it's always been valuable and my guess is it will always be valuable no matter what economic condition we find ourselves in.

If it came to implosion I wouldn't trade it for paper money. But because it is valued maybe someone will trade it for a salmon fillet. Currency is the matter.

It doesn't matter to me anyways. I already said I...uh...gave it away to...uh...charities, and relatives for their birthdays.

[TheWraith]

26. If you're imagining trading gold coins for salmon, then you'd do better to plan ahead.

Like investing that money ahead of time in a chest freezer for your basement, and filling it with meat any time the grocery store has a sale. Buying canned goods. Buy a gun and go hunting. Saving gold with the idea of using it in an emergency is inefficient: you'd get far better value for your money putting it into useful goods.

[zagging]

31. You mentioned implosion, not me.

I don't expect it to get to that point, and there are a number of problems with your plan. I don't own any place where I can put a chest freezer. If I were to hunt where I live the only thing I'd get are rodents, stray pets, and jail time. Other useful goods like big boxes of stuff require space and transportation. It's not an option. If one we to travel lightly, a decent amount of gold and small firearms could be transported and concealed, on foot if necessary.

I suppose there are some who buy gold to hedge against the apocalypse, but most buy it to hedge against what is happening to us right now. The price of Gold fluctuates with the dollar, but an ounce of gold will pretty much trade for goods what it historically could. Paper money is manipulated, gold generally tracks the manipulation.

[rucky]

8. First thing to do is travel back in time...

[Earth_First]

11. The smart way to buy gold was to purchase it $700 ago. n/t

[truebrit71]

14. www.apmex.com

Coins, bars and bullion...I use it to buy my silver..(I mean that's where my friend buys his silver....)

[Warpy]

16. The cheapest way might be by the hundredweight at a

jewler's supply store.

Then you need to figure out where you're going to put it so it doesn't attract thieves.

Then you're going to have to deal with the fact that if there's a total meltdown, gold rarely brings its paper worth. The Depression was full of people exchanging gold jewelry and other items for a few meals at a cheap diner just to keep them going another couple of days.

However, there are stories around that the US is keeping the price of gold artificially low by flooding the market, selling off the reserves at Ft. Knox. I tend to take them with a pound of salt for a number of reasons, but who knows?

If you want to bet on inflation, gold has been a hedge against that in the past. It doesn't earn you anything but it keeps its value if you can avoid getting it stolen and you have someone to buy it when it's time.

I'm betting on deflation in the short term. Whether or not it's followed by enormous inflation depends entirely on how much Obama is allowed to do in office.

[yorgatron]

27. invest in arable farm land and bullets.

since we aren't facing dust bowl conditions,it's the only sure way to make sure you won't go hungry.

[wuvuj]

33. Be careful where you buy the land?

http://www.alternet.org/environment/127625/?page=entire

I think that in the real world...things like cigarettes...t paper...toothpaste...other necessities...certain storage foods....ammo....would be the things to stock up on....IF you find a way to protect what you have.

Gold is good if you have the serious $ to buy it, protect it, and yourself?

[western mass]

29. Gold speculation, like other speculation, is a pyramid scheme

Gold is a "hot" investment now for one thing and one thing only: everybody else believes it's a "hot" investment. When they stop believing this (i.e. when you stop getting new people to buy into this belief), the belief-driven bubble bursts and the price drops.

[KharmaTrain]

30. Ya Missed The Boat...

First of all, if you're going to buy gold, I suggest bullion...coins...the real thing...and the best coins to have are Krugeraands.

I have mine stored in a safe desposit box and have each coin documented...and that list is on file with an attorney.

The best place to get the coins is through a bank...or at least get a recommendation. A coin dealer will tack on all sorts of charges a bank won't.

That said...the current price is around $985 an ounce...down a little from a high of around $1,000...nearly double what it was 3 years ago, but it's been around the $900-950 level for the past year. While logic would say as more people want gold the price will continue to rise, as one knows, there's no sure thing, especially in this economy. Too bad you didn't get in about two years ago.

[Lost in CT]

32. The smart way is to wait till it is about $700 an ounce again.

Gold has a trading range... use it.