wanting to invest a bit in precious metals

[FriedChicken]

sorry for being so ignorant on the matter but I've been looking into investing in some gold, silver, platinum, palladium and maybe even rhodium (just seems historically cheap, but I'm extremely unfamiliar with rhodium).

Should I mess with the online places like APMEX, US gold bureau, goldmoney, goldline, etc.?
I don't really know of any gold sellers in my area, however, I get a feeling that if there are some that they will be more expensive.

What I've been thinking about getting are some ms, pf or pr 70 gold buffaloes for long term storage and some bullion bars in each of the metals for shorter term storage (saving up for a house and would rather have the money in metal for the next two years rather than the bank)

I've talked to different people who sell gold but I trust the people of this forum better.
So if anyone has any advice please fire away. I'm just wanting to hear different opinions, I'm not looking for someone to tell me what to do - don't worry.

Also, someone told me that palladium would probably shooting up quite a bit in the next couple years. Thoughts on that?

Thank you.

 

[Arklatex]

i don't think the graded stuff is worth it... it's kinda funny to me anyway. A clean silver eagle to me is like any other!

Gold is the ultimate metal methinks, I was reminded last week when I came out of the heavily treated hot tub with corroded silver jewelry but alas, the gold was untouched. Gold is the highest of the high. Platinum is cool, palladium is cool. I'd concentrate on the silver and gold. Can't beat gold.

 

[Watch]

Wish I had some capital to invest. All I have right now is an untouched line of credit..which means nothing. :-(

 

[bluemarkets]

depends how much you want to buy. Stick with just bullion and not the numismatic coins as they are less liquid and have much more of a premium.

Cant go wrong with APMEX, but if you are just purchasing a handful you might want to check your local coin shop if you have any.

Buying lots .... look at tulving, they have some of the best prices for large orders.

 

[wgadget]

Yes, stick with bullion and skip the premiums. I like www.bulliondirect.com.

 

[A Son of Liberty]

If anonymity means anything to you, check out your local coin shop, and buy with cash.

 

[asurfaholic]

If anonymity means anything to you, check out your local coin shop, and buy with cash.

Why would this be important? Other than risk of thieves?

 

[inibo]

Why would this be important? Other than risk of thieves?

Some people do not like have their names on lists of people who own PMs. Should the state decide to confiscate that's the first place they'll look.

 

[pmbug]

sorry for being so ignorant on the matter but I've been looking into investing in some gold, silver, platinum, palladium and maybe even rhodium ...

Good advice for noobs: http://the-moneychanger.com/commandments.phtml

Don't mess with the more exotic metals until you have a base of gold/silver. The market for selling them (platinum, palladium, rhodium) should the need arise isn't as liquid. $.02

Should I mess with the online places like APMEX, US gold bureau, goldmoney, goldline, etc.?

If you have a lot of capital to spend, you won't find a better deal than tulving.com (they have very large minimum purchase requirements).

If you have a little to spend, you are best off finding a local coin shop and establishing a relationship with them. They will have prices comparable to the online sellers.

What I've been thinking about getting are some ms, pf or pr 70 gold buffaloes for long term storage and some bullion bars in each of the metals for shorter term storage (saving up for a house and would rather have the money in metal for the next two years rather than the bank)

ms, pf or pr70 are numismatics. You are paying a premium for "collector value" over and above the "bullion value". You likely won't be able to recoup collector value if the economy takes a turn for the worse. I would strongly suggest sticking with bullion coins only.

 

[FriedChicken]

wow, that was a ton of helpful responses in a short time. Thank you very much.

Thank you for your opinions on the numismatic coins - the advantages I've heard with those is that, regardless of market prices, they always seem to go up in price steadily (I've been told- but I haven't found a good way to track the value of "collector coins"). Another thing that I liked was that you can "get out" of paying income taxes on their sale. (with certified gold anyway).

Here are my thoughts on the specific metals - please correct my assumptions if need be.

Platinum: [I've been told] we don't know where else to mine it and unless we find another source we'll be out of new resources in two years. I'm guessing it will be a lot more expensive then.

Palladium: [I've been told] the price stays closer to the platinum price (within $400 usually) than what it has been recently. So its expected that either palladium will go up about $600 per once or platinum will fall about $600. I find it more like that palladium will go up. Would make a profitable investment to buy now and sell in two years or so.

Gold: The metal to own. I have a feeling that the fed will dump a massive amount of it on the market soon to make the dollar look stronger- I know they own massive quantities of it. I'm keep going back and forth on whether I should go into gold slowly till that happens and make a large purchase then or not ... its very speculative, I know.

Silver: The prices look high now and I'm expecting to pull back a little before shooting up even higher ... I don't know if I've come across this assumption based on what someone told me of if I just made it up one night while I was sleeping because I can't tell you why I expect it to that.

The goal here is for my wife and I to be able to store our money in something inflation proof and that will draw more than 3% interest while we save up for buying a house/land in the next couple years.
So prices and short term activity does matter some - if the prices go down, even if only for a month or so, during the time we're ready to liquidate the metal for a house ... that would be kind of bad.

After we have a house and land I hope to put a little away for longer term storage where I don't have to keep such a close eye on the markets -- I just know its safer there than in Fed. reserve notes.

Anybody want to add their two cents to my "by the seat of my pants" assessment of the markets?

Platinum - buy now, watch market in 3 years when "we're out" of new resources. Probably liquidate directly into money for a house.
Palladium - buy now, sell soon based on the price going up comparable to platinum. Invest money from sale into gold.
Gold - buy a little now, buy a lot later. Liquidate for a house.
Silver - buy after the first price dip, hold for a couple years and liquidate for a house.

Rhodium - too much of a wild card to take a chance on a relatively short term investment???

 

[nobody's_hero]

Maybe a matter of semantics, but I feel inclined to mention in these 'investor' threads that you aren't really "investing" as much as you are hedging against inflation (that does not mean you are not doing a wise thing)

At the current rate of money printing, if you bought gold/silver with US dollars and then exchanged them back for more U.S. dollars in the future, you *might* not actually have made a "profit". Unless of course the U.S. dollar suddenly increases in purchasing power, which is unlikely.

When I think of actually investing in gold/silver, I think of mining stocks, or investing in the actual companies that deal in gold/silver. Even then you have to ask yourself: "if your stock price goes up, is it because you actually made a profit, or because the dollar has been devalued and it simply takes more dollars to equal what you initially put into the stock investment?"

I guess the point is that it is difficult to weigh the true value of something using the U.S. dollar as a measurement, since its value fluctuates depending on who is tipping the scales at the Federal Reserve.

 

[Seraphim]

Here is a way to look at it - Gold per ounce VS housing. Silver per ounce vs a gallon of gas. Etc for any commodity/good denominated in PM's.

Gold = pure monetary savings, not an investment per se.

Silver = monetary savings PLUS investment grade potential as it is heavily exposed to modern technologies and industry.

Maybe a matter of semantics, but I feel inclined to mention in these 'investor' threads that you aren't really "investing" as much as you are hedging against inflation (that does not mean you are not doing a wise thing)

At the current rate of money printing, if you bought gold/silver with US dollars and then exchanged them back for more U.S. dollars in the future, you *might* not actually have made a "profit". Unless of course the U.S. dollar suddenly increases in purchasing power, which is unlikely.

When I think of actually investing in gold/silver, I think of mining stocks, or investing in the actual companies that deal in gold/silver. Even then you have to ask yourself: "if your stock price goes up, is it because you actually made a profit, or because the dollar has been devalued and it simply takes more dollars to equal what you initially put into the stock investment?"

I guess the point is that it is difficult to weigh the true value of something using the U.S. dollar as a measurement, since its value fluctuates depending on who is tipping the scales at the Federal Reserve.

 

[kill the banks]

"Gold = pure monetary savings, not an investment per se. "
gold is now being used in the car industry

 

[Seraphim]

Yes, gold has SOME industrial applications but for all intents and purposes they are negligible.

"Gold = pure monetary savings, not an investment per se. "
gold is now being used in the car industry

 

[nobody's_hero]

Here is a way to look at it - Gold per ounce VS housing. Silver per ounce vs a gallon of gas. Etc for any commodity/good denominated in PM's.

Gold = pure monetary savings, not an investment per se.

Silver = monetary savings PLUS investment grade potential as it is heavily exposed to modern technologies and industry.

Noted.

I was just saying that you can't look at an ounce of silver that you bought in 2002 for say, $8, and say with certainty that you've gained $30 if you sold that ounce of silver this year. (I haven't gone back to look at the exact numbers there, so don't hold me to that).

The question that you have to ask yourself is, did silver actually go up? Or did the dollar go down? Silver's value probably stayed about the same (relative to the dollar's nose-dive), because they can't just decide how much or how little silver they want to print, like they can with dollars.

We know that inflation always has a lagging behavior, as dilution is not immediately realized in the economy. As Ron Paul says, those that get the new money first get to spend it before its loss of value is truly realized.

We're still waiting to see the inflation effects from the doubling of the money supply in 2008. I don't really want to see them.

But, back to the point, maybe we shouldn't think of silver/gold purchasing as a 'money making' venture, but rather, a way to 'stop the bleeding.' If you hold on to dollars, you will 'bleed to death.'

You bring up a good point about gold being used as a weight for measuring property values, goods, etc. That shows that people are wising up to the fact that gold is a more reliable measurement tool than the dollar; that they could turn around tomorrow and triple the money supply with a stroke on a Fed-Chairman's keyboard and totally screw up the measurements.

 

[Seraphim]

Noted.

I was just saying that you can't look at an ounce of silver that you bought in 2002 for say, $8, and say with certainty that you've gained $30 if you sold that ounce of silver this year. (I haven't gone back to look at the exact numbers there, so don't hold me to that).

The question that you have to ask yourself is, did silver actually go up? Or did the dollar go down? Silver's value probably stayed about the same (relative to the dollar's nose-dive), because they can't just decide how much or how little silver they want to print, like they can with dollars.

We know that inflation always has a lagging behavior, as dilution is not immediately realized in the economy. As Ron Paul says, those that get the new money first get to spend it before its loss of value is truly realized.

We're still waiting to see the inflation effects from the doubling of the money supply in 2008. I don't really want to see them.

But, back to the point, maybe we shouldn't think of silver/gold purchasing as a 'money making' venture, but rather, a way to 'stop the bleeding.' If you hold on to dollars, you will 'bleed to death.'

You bring up a good point about gold being used as a weight for measuring property values, goods, etc. That shows that people are wising up to the fact that gold is a more reliable measurement tool than the dollar; that they could turn around tomorrow and triple the money supply with a stroke on a Fed-Chairman's keyboard and totally screw up the measurements.

I view it as a money SAVING venture.

I use PM's as a counter weight to my house. I expect the value (in real terms) to go down, while I expect the value (in real terms) of my PM's to go up (by a much larger degree then the loss on the house). When it comes time to refinance my mortgage, the appreciation in value of my PM's will likely offset any loss I take on the value of the home while granting me the ability to put a second down payment on the house going into the second term.

I'm using PM's as a counter to the depreciation of my dollars as THE WHOLE WORLD shifts to safer assets but also as a counter play to real estate.

The 2nd downpayment should erase a large portion of the debt still owed on the mortgage, thereby DRASTICALLY reducing the pain of higher interest rates. My refinance date is Jan 1st 2016. I expect near 20% interest rates for mortgages by that time.

By 2016, PM's will be a HUGE function of money and creditworthiness. Banks will be kissing PM owners feet in an attempt to sway them into their client base. Mark my words.

 

[nobody's_hero]

I view it as a money SAVING venture.

Bingo.

 

[JasonC]

The OP mentioned that he may need to liquidate his PMs at any time for a house... Based on that, I don't think you should be investing in PMs, or at least not a large amount. PMs are very volatile right now and you could get caught with your pants down if it comes time to liquidate and PMs just had a big correction. IMO, look for less volatile investments and put the amount you would need to liquidate in those. Then whatever you have left over you can put into PMs.

Edit: I reread the OP's post and he said they will be saving for a few years. I would have wrote something entirely different if I remembered that, because I was thinking he could possibly have to liquidate at any moment. So scratch most of what I said above...

With that said, don't put all of your eggs in one basket (PMs).

 

[Seraphim]

http://www.kitcosilver.com/

The past few days signal that summer weakness is essentially over. I wouldn't be waiting for a correction at this point. It already happened. The consolidated base is in.

 

[wgadget]

Yes, OP, you should be sure to join the kitco gold forum, if you haven't already. I think you have to wait 7 days to post, tho.

www.kitco.com