Buying Precious Metals?

[Mao]

I've recently come into a bit of money (not much at all...but a lot for me...) and I want to hide it from colleges. I also want to buy something that'll keep it's purchasing power over the years. So I'm considering buying precious metals. I'm thinking gold or platinum...buy a bit, put it in a safe place (maybe a bank safe or whatnot) and take it out when I need it. Stocks maybe, but they're more of a risk. What do you think? Is there a good, trustable place, I could get some? I'm in the Northeast if that helps...

[MRT144]

bonds? the only way id buy precious metals is in jewlery form, like getting a fat platinum chain.

[MichaeltheGreat]

Two things - check on whether you get screwed by sales taxes. In the Peoples Republic of California, if you buy bullion or coins, you pay sales tax on it unless you have a resale license. You don't recover that on the sale, so make sure you either get a seller's permit, or buy it in a way that you don't have to pay sales tax.

If you're going to buy gold, for a long time, the best deal around was in the Austrian and Hungarian 100 Koruna (sp?) coins. Kruggerands are the next up. They had the lowest premium over the bare metal value, so you got more ounces of gold for X dollars. Stuff like the modern US Eagle and the Canadian Maple Leaf shore is purty, but they're **** for investment purposes because there's an arbitrary premium.

If you want to invest on the coin side of things, buy some PCGA MS63 or higher US $10 eagle or $20 double eagle coins. If you want to invest on the bullion side, get yourself whatever carries the lowest premium over the bare metal value.

Platinum is more volatile in price, as it's an industrial and jewelry metal more than it's a monetary hedge. Gold is more of a mix of the three, so gold prices are a quite a bit less volatile on industrial demand, and more volatile on perceived inflationary and currency risks.

There are a fairly large number of reputable dealers out there - just look in the yellow pages, and a lot of them have call numbers where you can check the current market prices. Since all these coins are all the same within a given type - just a lump of metal with fixed weight, go for the lowest price, and a dealer with the lowest spread. 8-10 dollars between buy and sell prices for one ounce coins is pretty good. Don't get hosed on half ounce or less coins - the premium over metal value is way high, and so is the dealer spread. Just stick with standard one ounce coins or ingots.

[Lancer]

Mike, what's the best place to buy gold such as the Hungarian Koruna you mentioned? Is there a mail order place or a website or what? Zero experience in this, but I've been thinking a couple of thousand in case everything goes to hell wouldn't hurt too much.

[Urban Ranger]

I would say bonds would give you better appreciation than gold. Stocks are even better, but you need to do the research. Ignore the funds, they all lag behind the market.

[Mao]

Yeah...I was thinking bonds might be good too...but gold is...well...shiny!!!

[Ecthy]

Buying dollars with euros? why not now?

[Mao]

I already have 120 pounds...don't really want any more...

[Ecthy]

yeah, but next time the euro crashes, I coul dsell the dollars I buy now.... and afford a cup of ice cream

[Dinner]

Precious metals are almost a commoditity item now. Don't wast your money in them.

[Mao]

Hmmm...so bonds are the way to go then?

[Kidlicious]

Gold is high right now. It could go higher, but it seems kind of risky too.

[Cruddy]

Bonds are a guaranteed return (well, as guaranteed as possible). But you have to wait for that return.

Gold, while slightly lmore risky, can be cashed in anytime. It's better if you are using the cash as an emergency fund.

But check what the price is when you buy - always best to buy when prices are low (get a comparative 5 year index from a reputable publication - Financial Times have a reasonable website).

As for merchants, check your local telephone directory. See if there's any consumer reports out there.

If I was looking for investment advice, Apolyton's the LAST place I would rely on!

[Cruddy]

Originally posted by MRT144
bonds? the only way id buy precious metals is in jewlery form, like getting a fat platinum chain.

Jewellry is almost always overpriced compared to bullion or coins. You are paying for the craftsman to make it, as well as the price of the materials.

I say ALMOST always because even in this area there are bargains - but there are also many pitfalls too.

[Urban Ranger]

Originally posted by Cruddy
If I was looking for investment advice, Apolyton's the LAST place I would rely on!

We are better than mutual fund managers