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HOW TO BUY COINS

"And Abram was very rich in cattle, in silver, and in gold."

(Genesis 13:2)

 

Purchase Silver Bullion directly from Coinmine!

 

Also see: Why Buy Precious Metals

 

How to Buy Precious Metals

For a beginner interested in adding true wealth by buying precious metals for their portfolio, may we recommend you consider the following order of operations:

1. Buy bullion

2. Buy mining stocks via a Mutual Fund

3. Buy numismatic coin

4. Buy metals via an ETF

5. Buy mining stocks individually

6. Buy jewelry

7. Buy metal pools

8. Trade metals via an ETF

 

 

How to Purchase Coins

The following information governs the purchase of coins specifically, though has other information related to purchase of precious metals generally.

Here are some suggestions - based upon many years of mistakes, lessons learned the hard way [i.e. lost money and time], and the advice of those wiser than we, for your consideration:

Educate Yourself First!

 

"The best investment in Numismatics is knowledge". - Wayte Raymond.

 

She who has the most knowledge typically wins the negotiation.  The one speaking the least also has an advantage.  The fool makes sure everybody know his foolishness because he cannot keep his mouth shut.

 

1.  Buy a book or magazine before a coin.  For the first six months buy more books and magazines than coins. Get yourself a new RedBook.  These come out in new editions every year. Get a copy of the 'Greysheet'.  This shows dealer bid and ask quotes for various coins.  This will help you begin to understand the difference between wholesales and retail. Research this site, go to the internet boards and absorb knowledge (and the scams). Read, read and read some more. Find old books and magazines and catalogs to determine what was important to coin collectors in years past.  Seek to understand numismatic history and you'll become a better collector, investor, and hopefully - mentor. . .

 

2. Focus on being a coin collector at first, not an investor - big difference.  The bid/ask spread, eternal difference of opinion, and vagaries of the market can create large difficulties for those who buy a coin with the express intent to flip it for a quick profit.  (That said, they don't make old rare coins anymore.) The coin market has been strong since 2000, don't let that lull you into a false sense of security. The fact that everything you bought since then went up makes you lucky, not smart. Prices will go down sometime. If you are really that smart, tell me when the prices will start to go down! 

 

3. Along those lines, buy what you like, not what somebody else is trying to sell you.

 

4. Learn what other collectors and investors like.

Go to a coin show. A large show will prove there are few coin that are truly 'rare' or 'scarce'.

Go to the local coin collecting club.

Go to the local coin store.

DO attend a coin auction. DON'T get auction fever and bid more than you should. Set a maximum price you are willing to bid and stick to it.  If you are ever tempted to pay more than you had budgeted for a coin, make sure the coin truly deserves it; one of those irreplaceable coins that you will never have the chance to buy. These are extremely rare.

 

5. Collect your fancy and what suits you but remember that when it comes time to sell, you may be better served by collecting what everyone likes! 

 

6. Should your temperament drive you to 'invest' rather than 'collect coins', here is some food for thought.  Seek diversification; don't not too much in one coin, or type of coin; seek what others want so that when it comes time to sell, you can sell to them.

 

Learn how to grade coins.

7.  Look at many other coins grade by third-party grading companies. But remember: Buy the coin - not the plastic. Realize that many coins in a Third Party Grader (TPG) slab may not actually deserve the grade.  Professional graders do make mistakes. Many times a graded coin receives a grade with under four minutes of examination  That said, the coin in your hand that you think is better than the one in the certified slab, probably isn't (or at least will not receive the same TPG grade).

 

8. Buy quality over quantity. As in everything else.

 

Trust your instincts. If there is something that bothers you about a coin, it will bother you even more after you paid cold hard cash for it and now have to stare at it on your kitchen table.

 

9. As with everything else in life, find a mentor. Easier said than done!  The best way to learn anything is from someone who already knows hoe.  Finding a person both qualified and readily willing to teach you the ropes is a rare combination however.  Nevertheless, when you do find somebody that may be willing, be sure to reciprocate and help them out as they help you. 

 

10. Sell some coins on occasion, don't just buy forever. Test the market waters, see what people want and what they are willing to buy.  Sell a coin back to the person you bought if from; a guaranteed way to learn abut the market AND the person you bought the coin from.  The coin is  brilliant and inestimable when you want to sell, but the prospective buyer will find all kinds of reasons why the coin is a dog that had its day. 

 

11. Be very careful bidding on internet auctions. Pictures can be deceiving and not everyone in the world has your interests at heart. Avoid coins from south asia or expensive coins that haven't been certified, graded and encapsulated.

 

12. Ask lots of questions and get a second opinion whenever possible. Ask the same questions of different persons.

 

13. Most bargains, aren't.

 

14. Set realistic goals. You will not double your money in a month or two. Don't start out collecting the hardest coins to find and the most expensive to buy. You will not finish your goal that way and may become premature discouraged.  However, there is a competing philosophy that may even prove more valuable. That is, pick a difficult series to collect in its entirety. This will force you to be a picky buyer.  Visualize the coin you want and the grade you want before you see it.

 

15. Do not ignore technical quality.  Eye-appeal demands respect, buy never at the expense of strike and the other factors that drive grade.

 

16. Put a nice and obsolete coin back into circulation now and again. That may get another person started in the hobby, or make the day of someone already in the hobby.

 

17. Endgame:

Plan on how to bequeath you collection upon your death.  Leave directions in your will and avail your spouse or family/friends understand your desires.  Your collection, at that point, took a lifetime to build and could prove valuable, or at a minimum sentimentally valuable, to that person receiving your coin estate.  Why not leave a legacy, the coins last forever. Although your collection won't last forever, it may well outlast you while always providing a reminder of you and your interests in both life and your heirs and their well being. Not a bad gift, all in all.

 

18. As with everything else: Slow down and enjoy it but don't enjoy it too much; there are more important things in life - and they aren't things.

 

How To Choose A Coin Shop

How to pick a coin shop.  Now THAT is a good topic to mewl on about. 

I like to go to as many different places as possible, but concentrate my buying at just a couple.

 

For the time being:

Canvass all in your area. Look up 'Coins' in the yellow pages. Call up the owner and ask for the hours. Since many shops are owned and operated by just one individual or couple, it is not unusual for the store to close - even if during common store hours - when the owner needs to run an errand, see the doctor or take a day's vacation.

 

You may consider what neighborhood the coin store is in and then surmise what the expected clientele and business plan is.  For instance, if the coin store is in the nicest part of town, in a business suite, you may need an appointment to visit - or at least be willing to spend a substantial amount of money (several thousand dollars) if dropping in unannounced.  Don't expect to get much attention, or even be able to get in the door, if you show up in sweatpants and announce that you simply want to look around or purchase some common lower-priced coins. 

 

Alternately, if you are seeking high grade and slabbed type coins, your best bet is probably not the check'n'go/pawn store/coin shop in the hood with all the bars on where you either need to ring the buzzer or show an ID to the armed guard to get through the door with alarms and bars across the entrance.

 

Understand that each store fills a market niche and that over time, after visiting multiple stores in multiple cities,  you should be able to determine which one in any given city matches your wants and needs.

 

Once you get to the store, be discreet in your mannerisms. For instance, do not count a large amount of cash while sitting in your car.  There could be unsavory individuals out there noticing you without you noticing them. by and large, security is rarely an issue.  Should you wish to conduct a transaction of a very high dollar amount, such as selling your grandfathers lifetime collection (if he collected the good stuff) you may seek to meet at another location or perhaps request the store owner visit your home to conduct an appraisal. Store owners are always seeking to buy material, and high quality estate sales are one of the highest margins of profit for a store owner because they can always sell high quality collections to the wholesale market on a very short turnaround.
 

The coin business has some of the best and worst business people around. They all have differing market niches and business plans. Understand that most coin business exist economically because they buy coins from people who walk in of the street. They cannot make money buy selling coins to collectors because that market simply isn't big enough (yet).  Understand that the store owner is used to people walking in all day. Most first timers will look around, maybe ask some questions, and walk out of the store without buying anything. Some may ask to use the restroom have a glass of water, and take up time that could be used to serve other customers and then still walk out of the shop without buying anything.  Retail jobs dealing with the public all day are not very easy.  Some people think everything they own is a rarity worth thousands.  Others are on drugs.  Buy definition, half the population has an IQ below average and it may seem to the dealer that he get a higher proportion for whatever reason.  As a result, many old timer dealers get a reputation for being a little bit crusty.  You will be associated with the typical behavior of a first time visitor until that moment you exhibit some atypical (and hopefully positive) behavior that will demand some time and attention from the shopkeeper.

 

Many times you will walk into the store and not meet the owner at all, but a salesperson or counter helper.

 

First Time in the Coin Store: DOs and DONTS

 

DO:

- Say hello or introduce your self

- Let the shopkeeper know what you are interested in

- Be courteous and polite, no matter what the reaction on the other end

- Let the owner know you carried in some coins or other material such as a book or loupe

 

DON'T:

- Make too many assumptions about your first visit.  Relationships are a big part of the coin business and relationships take time.

- Try to haggle the very first time in a shop. The margins in coins are not that large; in bullion VERY small.

- Don't ask to not to pay taxes. (In some states, Ca, Md. purchase over 1,000 in coin or bullion will exempt payment of state sales tax.

 

One technique is to bring in some coins or a book or magazine with your inventory and show the owner the type of coins you like to collect and are seeking to buy.  This will help the owner determine what type of merchandise to show you.  Also, realize that if you walk into a coin store for the first time and want to sell coins, the owner must assume that he will never see you again, because you are selling off your entire collection, and therefore there is no reason to begin a relationship. This dynamic may sour your initial experience because the dealer must offer the lowest reasonable wholesale amount possible in order to make a profit.  Don't have wild expectations for your coins; you may have bought coins with problems that were not obvious to you since your not an expert, and almost without a doubt you will overestimate the value or your own collection and the quality of your coins. If you need to sell some inventory and plan on visiting the coin shop again, consider instead asking to put coins on consignment.

 

Ask the exact same question at each store, and compare answers.

What were the conditions of the store, compared to each other?

What are the respective neighborhoods like, any security concerns as you walk to/from with coin or cash? Security guards/cameras watching your every move (and capturing your every purchase)?

 

Helpful and KNOWLEDGEABLE service? That is, can you learn something from the person at the counter; and more importantly, are they WILLING to teach?

 

Will the counter person let you look at the coin, taking your time, in detail?

Does the inventory, and other factors, suggest that they would love to make you a sale, but DON’T NEED TO? For that matter, would they be ABLE to make a big purchase, on the spot – cash – if that is what you needed at any given moment.

Are all sales through the cash register, with a receipt?

 

Next step.

Buy a coin from each shop you consider doing business with.

Now, try to sell it back.  What are the differences?

 

When to Sell to a Dealer

There better and worse times to sell bullion and coins to a dealer.  The worst time to sell is Friday Afternoon. Why, well for one thing the dealer is getting ready to go home and has generally lost interest in buying.  Moreover, the dealer takes on a larger portion of risk when buying right before the  work week closes.  Dealers often base their bid price (what they are willing to offer) on CoinNet and NY spot price. These are no longer available, generally, after 3:30 Eastern Standard Time.  Third, a coin dealer doesn't necessarily want to lay out several or tens of thousands of dollars before the weekend. This creates an opportunity costs by removing cashflow that could be used over the weekend to make offer on private estates.  Buying on a Friday afternoon provides that there is no opportunity for the next 48 hours to sell the bullion or coin, since the stores are closed.

 

For these reasons, Monday Afternoons often provide the best time to achieve the bets buy price from a dealer. The markets have already opened and determined some semblance of direction and the news of the weekend is generally out into the market place. The rest of the week provides opportunities to sell and move inventory. The longer the purchase sits in the store, the staler it becomes = "dead inventory".

 

Likewise,

Various Days of the Month provide a better sell period, and

 

Various Months of the Year provide a better sell period.

 

HOW TO SELECT A DEALER

How to select a dealer, something rarely discussed. Great topic.

 

The Circle of Trust

The coin business is a fairly small group. Trust and reputation and relationships are important because bad news carries fast and a poor first showing can close many doors for a long time.  The Circle of Trust means the group of people you do business with that you can sell something sight unseen (that is, buy a coin based upon the description by the seller without having  to physically inspect it yourself) or front cash to and expect the transaction to unfold smoothly.

 

The flip side is that the industry can also be hard to break into because both the clientele, the collectors, and the dealers tend to be older individuals who have made relationships with each other, for better or worse over the years and have become somewhat cliquish.  As such, it can take a while gain access to wholesale prices or first options on a coin that has recently come to market.  Rather like those individuals that move to New Hampshire and are not considered local until four generations have been around. no, it isn't quite that bad, but it will take time to get your foot in the door at the various collector clubs, coins shows, or brick and mortar coin stores. The best approach to this situation is to provide the antidote yourself by being as friendly and inclusive and engaging as possible at each and every possible transaction or gathering.

 

Going to a Coin Show

Attending a coin show provides very valuable experience and buying and selling opportunities.  A coin show serves as the big tent where tens or hundreds of coin stores operate simultaneously and side by side.  The coin show will allow a glimpse into the market and show how dealers interact with buyers on the floor, and if you really pay attention, other dealers on the bourse. Local coin shows are typically sponsored and organized by local coin clubs whereas larger shows are sponsored by the national coin and dealer associations.

 

1. Select a Coin Show

2. Go to the Show

3. Don't show at the show (protect yourself and your coins and your money. Personal security and safety, every time).

 

Buying Over the Internet

 

1. If buying through an auction, look at the Feedback

If their feedback is less than 99.5%, find out why. Are there multiple retaliatory negatives left by other users with a short history or high negative ratings themselves?  Make sure that positive feedback is accurate. It really isn't that hard to pad feedback by buying 100 auctions for 1$ each.

 

2. Look at the photograph.

Does it look original? Do any parts look photo-shopped (different quality, lighting, shading or number of pixels)?

 

3. Ensure the item is properly identified.

Buyer beware, know what you are bidding on. Of course, this can work in your favor those times when someone has listed, for example, a 1919 dime whereas it actually is a 1919-s dime worth more.  There are also varieties and errors that you can sometimes spot on a coin photo that the luster may not be aware of.  She with the most knowledge wins.

 

4. Learn to grade.

Many sellers improperly grade out of inexperience at best, through fraud at worst. Know what a cleaned coin looks like, plenty of those out there.  Learn the difference between natural and altered toning.  Many second and third-tier grading services are inaccurate. All of them are in the game for their profit first.  Look at this way, even the best third party graders will grade thousands of coins a week and therefore may spend a total of three or four minutes looking at a coin before assigning a grade.  You may look at that same coin for an hour and see a much different, and perhaps truer, picture.  Even the larger grading companies may refuse to grade your coin because it has been cleaned yet clean their own supply and grade the coins.

 

5. Insist on fair postage and handling and insurance charges.

 

6. Know the return policy before you bid.

 

7. Use patience and common sense.

Treat the seller like you would want to be treated (the golden rule seems to be in shorter supply than gold itself).  If you receive something in the mail that disappoints, work to return the coin or otherwise make the transaction satisfactory through open and honest communication with the seller first BEFORE leaving an immediate negative feedback.

 

Buying from the US Mint

 

The US mint sells these silver and gold products because they are large moneymakers.  Typically the purchasing collector will never get their initial investment back.. However, occasionally a mint product goes against this grain.  For example he silver mint sets offered in 1999 and 2001 sell for many times their initial sale value.  However, there are many more examples such as the 1968 or 19732 mint sets that still sell for near or below their original purchase price.  When interest in mint products wanes to far, the mint will purposely print an 'error' issue that will generate immediate buzz and typically drive up other offering for that numismatic year.

 

Buying at a Flea Market

You might find coins, and potentially all sorts of antiques or collectibles (amidst a sea of junk) at your local flea market.  Before you go, put together a “flea market buying bag.”  Use a large shopping bag to carry small items (or a collapsible shopping cart/hand cart for larger items). Include packing material like newspapers, bubble wrap, boxes or old blankets to protect glass and ceramic and the like.  Diapers are also excellent for wrapping breakables. Within the shopping bag carry smaller plastic bags to segregate items and to use as packing material when empty. Carry a rope and/or bungee cords to hold items on top of the car or to secure an open trunk or back of the pickup truck bed door on the way home. Other potentially helpful items include a screwdriver, hammer and WD-40 (to loosening oil) to dismantle larger furniture to fit it in your car.  A tape measure will prove helpful checking furniture size against the size or your trunk or space at home.

 

 

HOW TO BUY GOLD

Gold Bullion (bars and coins)

Gold Stocks

Gold Exchange Traded and Mutual Funds

Gold Jewelry

Gold Pools

 

 

Gold Bullion

 

Frequently Asked Questions

Is there tax on buying gold coins?

Sales tax depends upon what the state/province/country charges. There are ways of minimizing the tax burden. For instance, in California if you pay over 1,000 there is no sales tax. In Nevada there is a sales tax unless you have the dealer mail it to an out of state address, for example, in California.

California State Tax exemption for coin sales to dealers for re-sale purposes.

 

If I buy a gold one-ounce bullion coin for $400, can I sell it the next day for the same amount?
There are transaction costs. The dealer will typically buy the coin for the spot price, and sell at spot plus a cost. The cost is his profit margin and expenses. Depending on what type of customer you are and how much you are buying, the actual cost of one ounce bullion gold at spot price 450 will cost you between 460-495. The price also depends upon the relative supply of the dealer, the recent price activity, and even the time of the day and week. For instance, dealers may charge more if you try to buy on Friday afternoon because they will have to lock in future market risk.

 

Can I pay with a check?

Yes, you can buy any amount with a check.

 

Can I pay with cash?

Yes, coin and bullion dealer all you to buy any amount with cash.

 

Are cash sales reportable?

Only for large purchases done with more than one check or via more than one account. You can buy any amount with cash BUT if you buy more than  $10,000 in cash, with two separate checks or cashiers checks, you must fill out I.R.S. Form 8300.  The gold purchase itself does not trigger the reporting requirement, the cash transaction via two separate checks over 10k in total triggers the requirement.  Large cash transactions are tracked by the government.  If you cashed a check at the bank for 10k, this transaction is also reportable by the bank via their logs of Cash Transaction Reports, Currency Transaction Reports (IRS form 4789), Monetary Instrument Reports, or Money Instrument Logs.  Dividing up one large transaction into two smaller ones is considered fraudulent buy the government. They say tax avoidance, you say tax minimization. These requirements were instituted when Congress decided to begin tracking citizen financial transactions in their effort to criminalize normal and ordinary American lives via, amongst other abominations, the Tax Reform Act of 1984 and the Anti-Drug Abuse Act of 1988, and the Bank Secrecy Act.

 

The Broker Reporting Act of 1982 provided that certain commodities contract purchase (cotton, sugar, precious metals, etc.) are subject to reporting by the broker/dealer to the IRS on form 1099-B only on the sale by a US citizen when the bullion was held for investment purposes and resulted in a capital loss or gain.

 

Some rules apply to bullion only when you sell and do not apply to numismatics.

Small gold bullion coins do not need reporting. So, buy many of these!

Silver transactions of $1000 face 90% silver bags and 1000 ounce silver bar transactions are reportable only on the sell side. This report is for any size bars that total over 1,000 ounces in total. Smaller size silver bars are not reportable. $1000 face 90% silver junk bag contains 715 ounces of silver.

 

Silver sells of 40% bags or less than $1000 face in 90% silver coin are not reportable.
$1000 face 40% silver junk bag contains 295 ounces of silver.

 

However, many instances of moving cash or bullion out of or into the country may require U.S. Customs Form 4790 and the corresponding Currency and Monetary Instrument Report.

 

And yes, it does get worse.  Though not pertaining exclusively to bullion, if you withdraw $5,000 or more, and your nosy entry level banker driving a leased car and losing her ass in mutual funds decides she doesn't like you, she may decide to invoke that portion of the Banking Secrecy Act passed while you were asleep which requires that she file a Suspicious Activity Report (OTS SAR Form 1601) if she unilaterally determines, typically out of her own ignorance and pettiness, that your transaction "Has no business or apparent lawful purpose or is not of the type that the particular customer would normally be expected to undertake."  Further, she is then mandated to send this report to the Financial Crimes Enforcement Network (FinCEN) at the Treasury Department so that they can put it in your 'permanent file'.

 

Another example of regulatory creep.  The alternative minimum tax was never intended to catch the middle class.  Or so the middle class was told.  Oops, now it does apply to you - so sorry.  Same with the income tax.  Eventually, 5k will buy so little gold that a couple ounces of gold transaction will put you on the 'list'.  Though if you reading this, may be too late...(winkies)

 

- Bullion through eBay

 

- Bullion through a brick and mortar coin storefront

 

- Bullion over the internet

 

 

Gold and Silver Exchange Traded Funds

 

iShares Silver Trust exchange-traded fund ( SLV )

Bank of New York (BK) is the trustee and J.P. Morgan Chase Bank (JPM) in London is the custodian.

 

StreetTRACKS Gold Trust Shares ( GLD )

Bank of New York (BK) is the trustee

 

GLD ticker performance:

http://www.investors.com/quotes/default.asp?ac=&t=GLD

 

iShares Comex Gold Trust ( IAU )

 

DBS PowerShares DB Multi-sector Commodity Trust Silver Fund (AMEX)

DGL PowerShares DB Multi-sector Commodity Trust Gold Fund (AMEX)

 

Since the gold and silver ETFs are an easy way to partake in the metals market, why pay for a closed-end fund mutual fund?
 

Pro:  Liquidity, visibility, low-cost.

Since the ETFs trade like stocks so they offer easy liquidity and great visibility.  You can trade in and out relatively cheaply with an expense (2006) of of 0.4% per year. 

 

Con:

- Not really gold, just electronic digits reportedly tied to the price of gold.

- Your stake in this venture could just as easily become unavailable to you for all the same reasons that other electronic 'wealth' may be denied to you: Acts of God, Acts of War, Force Majeure, government Confiscation, Loss of account, 'computer glitch', fraud, insolvency, intestate will, lawsuit and judgment, liens or garnishment, etc. Read about various types of risk for more information.  Those who historically have opposed holding silver and gold have used the argument that the government could confiscate private holdings of gold (as it already has done).  If the government again attempts to confiscate private citizen gold holdings, the metals held by the ETFs is the logical place to start.

- The ETF may trade like a stock, but its taxed like a collectible. That is, instead of paying the 15% on long term (year and one day) gains for a stock, you instead would pay 28%. Big problem in our book.

 

Gold Exchange

An interesting concept, but one that has also garnered a fair amount of negative attention. The feds in their constant search to imprison any people that do not support total corporate hegemony have targeted this site as a supposed conduit for 'terrorist' conducting 'money laundering operations'.

 

Although this is not a dedicated means to buy gold, per se, it provides a conduit for purchasing other goods in a an electronic currency medium with a purported  physical gold backin.

 

http://www.e-gold.com/

 

Gold Mutual Funds

 

PSPFX  - Resource and Precious Metals

 

SCGDX
 

SCP.TO - A Precious metal mutual fund with a focus on small Canadian junior mining firms.
 

TGLDX - Good metals fund.

 

UNWPX -World Precious Minerals Fund

The World Precious Minerals Fund complements our Gold and Precious Metals Fund by giving investors increased exposure to junior and intermediate mining companies for added growth potential. With a high level of expertise in this specialized sector, our portfolio management team includes professionals with experience in geology, mineral resources and mining finance."

http://www.usfunds.com/our-funds/

USAGX - Precious metal fund including many smaller producers

 

USERX - Good benchmark precious metal fund.


VGPMX - A quasi-precious metal fund

 

 

Gold-Miner Exchange Traded Funds

Here's out favorite: Market Vectors Gold Miners (AMEX: GDX). 

 

Annual expense ratio: %0.5

 

Top 10 GDX holding (2007)

Newmont, Freeport McMoran, Barrick Gold, AngloGold, Harmony Gold, Kinross, Yamana, Gold Fields, and Agnico.

 

GDXJ - Similar to GDX, but with more junior miners in the mix.

 

 

Gold Pools

Consider gold pools as another form of savings account where your assets are denominated in shares backed by physical gold held in trust by a broker.

 

Kitco runs the most honest pool. Kitco founder Bart Kitner has developed an honest reputation in the industry. Even though pools provide a fair amount of liquidity, the transaction costs are high enough that this method of investing must be considered a swing or long term position. Better yet, just consider it a long term strategy for holding part of your physical bullion.  You must use a money order or bank wire transfer since credit cards are not accepted (never buy long term physical gold holdings with a credit card!).

 

Essentially, this method of owning gold is for the richer folks who need to diversify part of their physical holding by paying someone else to buy in bulk and store their portion.

 

Other pools include Monex and Comex. Both of these have poor reputations in the industry.  Monex provides 4/1 leverage whereas Comex provides 15/1 leverage.  Of course, with increasing leverage comes increasing risk. These accounts are typically margin accounts.

 

Anglo Far-East Bullion Company or of their silver savings accounts

Goldmoney.com is another which is sponsored by James Turk ......a known entity in the GOld Community ..

 

 

Holding Gold and Silver Bullion within an IRA account.

 

Yes, since 1997 Americans have had the option of holding precious metal coin and bullion within an IRA.  You may also hold gold in all IRA varieties - Traditional and Roth IRA, simplified employee pension (SEP) and simplified incentive match plans for employees (SIMPLE).

 

However, many conditions apply which, in the opinion of CoinMiner, make this a less than palatable alternative. 

 

Here are some restrictions and conditions

 

:1.  Make sure your IRA custodian allows you to hold physical gold in your IRA account.

 

You may be required to establish a new, second, IRA.

 

2. Select a Custodian that administers gold and silver in an IRA. Also - this is the tricky part - you need to find a custodian who not only has much experience dealing gold, you must also ensure they will give you back your gold when you ask.  Sure enough, I have heard of problems in the past with Monex, for example.

 

3. Fill out the administrative paperwork, send to new IRA custodian in order to open your new gold-silver IRA account.  They may charge an administrative fee, custodial fee or storage fee. These vary, so shop around.  coins you will hold in your account.  The IRS requires you store the gold at an approved depository in a physically separate location from the IRA custodian.

 

4.  Transfer money the existing IRA to the Custodian so that they may open a new one. 

 

5.  Along with the transfer, specify which coins you want in the account.  Not all gold coins trade with the same premium. The gold

coins must be at least 99.5 percent pure.  The coins also must be legal tender (per the government mint of each country where the gold originates) to qualify; you cannot always store bullion.

Qualifying coins include: American Gold Eagle, Australian Kangaroo-Nugget and Perth Mint Lunar series; Canadian Gold Maple Leafs and Austrian Philharmonics.

Early US Gold Coins, South African Kreugerands and some other foreign mint-produced gold coins are not 99.% gold, and therefore not eligible.

 

You can store some types of silver bullion along with Mint-produced platinum and palladium.

 

6.  If the sum is large, consult an accountant with experience; examine your risk tolerance and overall portfolio strategy.  If the amount is small, why bother.  Save the fees and administrative headache and purchase the gold directly, yourself, and use your IRA to trade the Gold and Silver Exchange-Traded Funds (GLD and SLV respectively) to hedge your physical holdings.

 

For further information:

 

http://www.cmi-gold-silver.com/gold-silver-ira.html

 

Also, CoinMine recommends Goldine/GoldStar Trust as a custodian.

 

Gold Mining Stocks


http://www.globefund.com/
(If you are into Funds)

Commodity Brokerage Houses

Another way to gain information of gold miners is to read the brokerage firm coverage.  Typical brokerages that cover miner stocks include the following:

BMO Nesbitt Burns

Canaccord Capital

CIBC World Markets

Desjardins Securities

Dundee Securities

Haywood Securities

Merrill Lynch

National Bank Financial

Orion Securities

Paradigm Capital

Raymond James

Rbc Capital Markets

Salman Partners

Scotia Capital

Sprott Securities

Warrants

 

Information on Warrants:

 

Canadianwarrants.com

preciousmetalswarrants.com

 

eGold

 

Jewelry

How to sell gold jewelry

 

Gold Jewelry is sold based upon Karat weight while measured in Pennyweight. DWT is the unit for pennyweight, where there are

20 DWTs per ounce of troy gold = 31.104grams.

 

Gold Karatage and Gold Content as a Percentage

24K = 100%
22K = 91.75%
18K = 75%
14K = 58.5%
12K = 50.25%
10K = 42%
9K = 37.8%
8K = 33.75%
 

Minimum amounts gold buyer wants:

10Kt at minimum buying amount (typically 5 ounce minimum)

100 Pennyweight or DWT per gold chain

 

As a general rule, try not to waste time with Karat 10K and lower.

 

Places to sell gold jewelry and scrap:

http://www.goldkit.com/

http://www.usgoldbuyers.com/

 

How to Buy Silver

 

http://reviews.ebay.com/Investing-in-Precious-Metals-Bullion_W0QQugidZ10000000000938000

 

How to Buy Silver

 

1. Buy bullion

2. Buy numismatic coin

3. Buy mining stocks via an ETF

4. Buy mining stocks via a Mutual Fund

5. Buy mining stocks individually

 

How do you plan on looking at silver as a part of your portfolio?

If as a futures commodity, try:
Chicago Board of Trade Ticker Symbol: CBOT:YI05K
 

or

COMEX
http://futures.tradingcharts.com/marketquotes/quickquote.php3?sel=Silver
 

For large amounts (1,000+ ounces per purchase) of physical silver, try kitco.com or any of the other dealers under the links section.
 

For historical prices, please realize that there are 500+ year charts for precious metals. See Sharefin's site for a fine selection of charts.
 

If that doesn't scare you off, and you want to try you hand in the more risky commodity option arena, start here:
http://www.mrci.com/
http://www.crbtrader.com/
 

The big sharks play in these waters; best to not act like tuna...

 

PHYSICAL

 

Government Mint Rounds

US American Eagles

Canadian Maple Leafs

Canadian Wolf 1/2 Oz. (2006)
 

Purchasing Bullion

The initial cost is high in relative terms because of mark up.  Markups of 50 cents to $1 over spot price is common from the smaller local dealers in your neighborhood.

 

Private Mint Rounds

Most rounds are off-brands or art bars and you will take a large hit when trying to sell quickly, and all at once, The best market for these are collectors or other small purchasers.  Other problems include little general public trust regarding purity or weight.  Hence, you will find these harder to sell than more well known rounds or other forms of silver and typically selling at a discount to silver melt value. In sum, avoid unless you want to specialize in this area.

 

Bars

Engelhard Johnson

Matthey (JM)

 

Focus on 1, 10, and 100 oz. bars. Avoid off-unit size bars as they are harder to sell since they won't add up to round lots

 

100 Oz bars

Con: The bars are not divisible. You must sell all or none. There is the possibility of forged or hollowed-out bars where a hole was drilled into the bar interior, the silver removed, and other base metals were inserted.

 

'Junk Silver'

90% silver US coins. Expect to pay a premium for one type of coin, half dollars and bags of older coins (those without Washington quarters or Roosevelt dimes).  Junk silver bags present a sound investment method because it is trusted, recognized everywhere, easily divisible, may contain premium coins above melt value (possible appreciation in numismatic worth based upon your input of time - an example where holding bullion pays 'interest'), there is a floor -face value - beyond which the value can never fall.  .

 

Another reason to purchase gold bullion:

For example, you want to invest $100,000 (2005 US) dollars in silver.  IF you buy silver eagles for $10 a coin you would have 1000 coins which is over 620 pounds. However, if you buy $100,000 (2005 US) dollars in gold bullion (at $500/ox.) then you have 200 coins.  These 200 coins will fit in 20 rolls which in turn will fit in a shoebox. now, its a matter of deciding where to STORE that shoebox.!

 

Buying silver within an exchange-traded fund:

ETF Prospectus

http://www.ishares.com/misc/prospectus.jhtml

 

 

Other Resources

 

OTHER PRECIOUS METALS

Platinum and Palladium

Sales and buys of 25 ounces or more in total are reportable transactions with the following exemptions:

Canadian Maple Leaf, U.S. platinum Eagle, Australian Koala and Russian Ballerina.

...and remember, this time is NOT different.

 

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