How does one buy gold?

behaviorkeltonJuly 25, 2007

Six years ago, a friend handed me a brochure from a company that sells various sorts of gold (vintage coins and bullion).

I think gold was under $300 and I should have bought. Anyway, the reason I didn't buy was that this company charged big fees.

So how does one actually buy gold? Must we use these outrageous "precious metal" companies with the slick brochures?

Thanks

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duluthinbloomz4

The smart thing is to STEER CLEAR+ I> of the slick brochures, TV hucksters, pawn shop type places that buy and sell scrap all of whome will sell you (s)crap for big bucks.

1. Be constantly aware of gold prices.
2. Get friendly with a reputable local coin dealer or someone who deals in very high end watches or antiques. They generally have sidelines.
3. If they deal in gold or other precious metals, they've bought low and made their money so should sell you a gold coin or a bar of silver (or whatever) at a few dollars over spot.

    Bookmark   July 25, 2007 at 6:04PM
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cissado

Gold stocks or mutual funds. 'Precious metals'

    Bookmark   July 25, 2007 at 8:35PM
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joyfulguy

The Bank of Nova Scotia will sell you gold in Canada, at the going price, with a bit of spead between buying and selling price as their transaction fee.

If you store it with them, they'll charge you storage fees periodically.

If you take it home, when you sell it, they'll charge fees to weigh it again, and to check it to be sure that you haven't added some other stuff to make it less valuable as an alloy (called "assay" fees).

If you're worried about the continued integrity of the U.S. Dollar, maybe diversify by buying shares in companies outside of the U.S.

If you'd bought Canadian Dollars about 4 years ago, you'd have paid about 69 U.S. cents for one ...

... and if you were to sell one now, you'd get about 96 U.S. cents for it.

In addition to what it might have earned while you had it working for you in Canada through that period.

It used to be that US$1.00 would buy more than one Euro. Now one Euro will buy more than US$1.00.

It used to be that a large portion of world trade was done denominated in U.S. Dollars. Recently some producers of crude oil are asking a number of customers in various countries to pay them in Euros, which it appears that they consider to be a more stable currency.

Or Swiss francs.

ole joyful

P.S. Too bad that you hadn't bought gold about 20? 40? years ago, when the U.S. had it pegged at $35.00 per ounce.

But it seems to me that it was illegal for U.S. folks to buy it, at that time, as some of our U.S. family were wondering about buying some up here.

ole joyful

    Bookmark   July 26, 2007 at 6:49AM
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kudzu9

Investing in gold is not for someone who has to ask how to do it. This is a complex investment and you are unlikely to make much of a profit off of it compared to many other safer and more easily held and liquidated investments. I've invested for decades and have seen numerous smart and sophisticated investors do poorly with precious metal investments.

    Bookmark   July 27, 2007 at 12:57AM
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mxyplx

Some years ago (early 90's I think) the Wall Street Journal carried an ad; gold buyers wanted - million ounce minimum.

    Bookmark   July 31, 2007 at 10:15AM
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italianchildhood

I think you can buy gold in a mutual fund. That makes it easier to buy and also much easier to sell I think. Good luck with it!

    Bookmark   August 9, 2007 at 7:16AM
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behaviorkelton

I'm not so sure I want gold, but I've only seen it offered through "scammy" sounding businesses... so I was wondering how savy buyers buy gold.

Thanks... some interesting comments!

    Bookmark   August 13, 2007 at 5:05PM
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xminion

As of this writing gold is around $1500ou. and will absolutely go to $2000.00. Check back here at the end of the year and see if I'm correct!

    Bookmark   May 20, 2011 at 12:27PM
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kudzu9

...and if you're not correct, do I get my money back?

    Bookmark   May 21, 2011 at 8:44PM
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dreamgarden

"As of this writing gold is around $1500ou. and will absolutely go to $2000.00. Check back here at the end of the year and see if I'm correct!"

I hope your right.

    Bookmark   May 24, 2011 at 11:28AM
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behaviorkelton

Yes... in spite of some reservations in this thread, the past few years have been EXCELLENT for gold buying a making very tidy profit!

What is really shocking is that the reasons for continuing to buy metals actually appear to be stronger than they were in 2007!

However, I am seeking other investment options for the sake of diversity. I tend to listen to Peter Schiff, but do not want to invest totally within the "we're doomed!" investment philosophy!

    Bookmark   June 23, 2011 at 1:35PM
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dreamgarden

"What is really shocking is that the reasons for continuing to buy metals actually appear to be stronger than they were in 2007!"

I think gold will go higher. There are a lot of ads in the paper, tv or radio offering to buy gold jewelry, etc.

I don't know if they know any more about the market than the experts, but it makes me think the top hasn't been reached yet.

    Bookmark   June 24, 2011 at 8:59PM
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jkom51

Gold is like anything else. What matters is the difference between what you buy it for, and what you sell it for.

If you don't sell it, you've made nothing. Whatever you invest in, you need an exit strategy, and you also need the intestinal fortitude to execute it.

Nobody ever calls the exact high or exact low price on any investment, except in hindsight.

    Bookmark   June 28, 2011 at 11:21PM
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ian_bc_north

One of my co-workers who formerly ran a jewelry store said that there was a fellow who would come round regularly and buy up any scrap gold he had on hand. If you don't know how to determine the grade & value of gold I could not recommend such a course of action.
Years ago I was in the gold assaying business. Some of the people who are in the gold business are either very strange or shady. I prefer dealing with copper, people don't get nearly as weird about copper as with gold.

    Bookmark   June 29, 2011 at 2:19AM
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joyfulguy

It's not so much that the "value" of gold ... gasoline ... etc. has "gone up" it's the price that has!

If you take inflation into account, gas, and, likely, gold, though in the U.S. its price was regulated for a number of years, have not gone up much.

The value of a U.S. Dollar has shrunk.

They've been printing so many more of 'em, is the trouble.

Years ago when I was helping refugees get resettled in Korea, and an old retired Canadian doctor was helping with their major TB problem, he said that inflation was government theft ... and I argued with him, then ... but I'd be less inclined to do so, now.

Especially when they keep the interest rates low - when you factor in the rate of income tax on that income that reduces the amount of that interest that you keep ...

... and reduce the rate of after-tax return by the current rate of inflation ...

... you're under water!

You're going behind, in terms of purchasing power.

In Canada, interest was and is taxed at the top marginal rate: higher than Canadian dividends, earlier ... now a lot higher.

Also, if you but a mutual fund or ETF purportedly holding gold ...

... make sure that they have the gold on hand enough to cover all of the funds that they've sold.

And when you bought the fund, gold was at a certain price, so you were buying whatever percentage of the price of one ounce of gold, at that time. Will the price of the mutual fund in a month - six - a year - five - work out to the same percentage of an ounce of gold, then?

Want something under-valued?

Buy a chunk of a quality gold mine!

Or, maybe, a silver mine ... as silver has industrial uses, and increasingly so, while gold has only minimally such: it's mainly a store of value ... and jewellery.

ole joyfuelled

    Bookmark   January 18, 2012 at 4:16PM
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