Back to Ganoksin | FAQ | Contact

Investing in gold opinions


#1

I am interested in finding out what buzz is out there on investing in
actual gold. I may be interested in buying gold for this purpose and
am looking for on sources, best pricing, best physical
forms and just general opinions.

Thanks,
Nena


#2

Nena- Buy low. Sell high. Right now gold is very expensive. Not a
good time to invest. I’ve been doing this since dinosaurs walked the
earth and I’ve seen this before. Back in the late 70’s and early 80’s
gold was almost 1000. bucks an ounce, silver was 40 bucks an ounce
and a one carat diamond cost 10,000 a carat. I saw sooooo many folks
get caught up in the frenzy and buy then. They still have safety
deposit boxes full of the stuff and still waiting to make a profit,
30 years later.

After that boom was over, I spent the next several years buying
silver common rounds every payday at 4-5 dollars an ounce. Last
summer I sold half of it at 20 an ounce. So if you want to invest in
gold, wait until the price gets lower. We stock piled gold and
platinum when gold was in the 300 range. We bought all of the
platinum scrap that came our way.

Last summer when I sold my metal, “experts” were sayindg that gold
would hit 2000 and ounce and that oil would be 200 a barrel. Yeah,
right. Don’t get caught up in the frenzy.

Have fun and make lots of jewelry.
Jo Haemer
www.timothywgreen.com


#3

Nena -

I have invested both in bullion and in unallocated pool accounts.
(see https://online.kitco.com/sellprice/Ordr_Faq.htm for more
pool accounts are about 2/3 the way down the page)

Physically having the gold in your hot little hands, in your home
safe or secure bank box has its advantages…and disadvantages. It
can be the best kind of cash-in-hand. I have a small amount at home,
the rest in the bank box. But you have to know how and where to
liquidate it without losing your shirt.

Here is the blurb from Hauser and Miller, a refiner I have used

http://www.hauserandmiller.com/fab/bullion.html

GRAIN OR PIECES - Fine gold for casting is supplied in either grain
or cut pieces of sheet as available. (kd note: not hallmarked! not
recommended for investment) BARS - Bars are cast by request in 25 to
100 troy ounce ingots. WAFERS - Heavy sheet in 8 or 10 gauge cut to
exact weight and stamped with our name, weight, and purity. Supplied
in 1, 5, and 10 ounce wafers. COINS - U.S. Eagle Coins and Canadian
Maple Leafs available for sale or return on refine lots. Other sizes
and coins available upon special request. The cheapest form of
bullion is a refiner’s ingot or wafer. It will be hallmarked with the
purity of the gold and name of the business/refiner. It’s not as
recognizable as a coin, and you won’t get as much for resale, but
it’s real gold in hand, and you can always alloy it, roll it out and
make something with it.

If you get coins such as Krugerrands, Maple Leafs, American Eagles,
you will get something recognized throughout the world. They are not
all the same price - demand and perceived desirability will affect
the price. (see https://online.kitco.com/bullion/completelist.html)
Right now, American Eagles are in HIGH demand in the US. Some days
they aren’t even available. They will cost you the most (usually),
but will get you the most (usually) when you sell. Krugerrands are
cheaper, but will get you less when you sell. In my personal
spreadsheet, I have noted that Kitco sells Krugerrands for 1.83% less
than the American Eagles.

If you get gold with the thoughts of ever using it to alloy for
jewelry making, I’d recommend getting the ingots, not coin. Ingots
are 99.9% pure, but the coins are generally 91.7% pure. There IS a
troy ounce of pure gold in there, but the coin itself has been
alloyed to 22k (more or less) for durability. If you weigh it, you
will find its mass is greater than a troy ounce.

Regarding the pool account, after you establish an account, you can
puchase as much or as little as you can afford (see
https://online.kitco.com/bullion/index.html#pools). This is great for
when you have some extra cash and want to invest in something durable
and something you know about. Or for when you have a little cash and
the price of your favorite metal suddenly tanks. Buy low, sell high.

When gold and platinum were in the doldrums in Oct/Nov '08, I bought
what I could. It wasn’t much, but the recent spike in platinum netted
me enough to help fund my new shop.

I don’t know enough about financial markets or the business of mines
to invest in the mining industry. I will leave that to people with
more interest in the subject.

I hope this helps you!

best regards,
Kelley


#4
Buy low. Sell high. Right now gold is very expensive. Not a good
time to invest. I've been doing this since dinosaurs walked the
earth and I've seen this before. 

This is not a buy recommendation, but consider this. The gold was
historically expensive in the last few years because of increased
demand from India and China. Presently demand from these places is a
mere shadow of itself. Nevertheless, the gold is in $1000 range.

The question is why? One theory is because of Federal Reserve
"printing money" like a maniac, it has to trigger inflation at some
point. Another theory is that dollar could be replaced by other
currency. Even a possibility of some way of connecting monetary
system to gold was mentioned in some circles. If any of this would
ever become reality, the current price for gold would be a bargain.
On the other hand, if all this just talk, due to reduced demand, we
can see gold bellow $400.

Leonid Surpin
www.studioarete.com


#5

Nena,

I am not a financial advisor but my friends tell me:

If you buy high karat gold and have the skills to turn it into fine
jewelry you are likely to make a nice profit, but this is not
traditional investing in gold.

If you subscribe to the “buy low… sell high” theory be sure you
look at the fluctuations in the price of gold over the past 25 years
which you can google. Right now gold does not meet the criteria for
"buy low… sell high".

And, physical gold does not pay dividends, which is a major reason
for many for investing. However, gold stocks do pay dividends.

Get professional advice and recommendations and be careful.

Happy investing. Mary A.


#6

Nena, you can invest in a business, or an education, or treasury
bonds. Buying gold is speculation. The value of gold in the future is
in the hands of a few dozen ‘market makers’, including the US
Treasury Department, various central banks in Europe and Asia, ‘the
Chinese’, ‘the Economy’, and enormous mutual fund managers. 'They’
have the power to increase, decrease, or maintain gold prices
indefinitely, depending in large part on what makes THEM money when
they need it.

That said, the ‘gold standard’ for gold speculation is one troy
ounce ‘coins’ minted by the governments of the US, Canada, Austria,
or Australia, purchased ONLY from reputable dealers. Smaller size
coins are available, but they are often at a serious premium over the
melt value. The purchase or holding of larger sizes, bars, or
off-brand rounds limits the market for their re-sale when you want to
sell them.

Gold, like everything else, is subject to periodic episodes of ‘pump
& dump’, where major holders of the metal cause the price to
increase, until the unwashed masses jump on the bandwagon, and then
liquidate their positions just before the price collapses. These
collapses are NOT forseeable, except by those causing them.

Good Luck!
Lee Cornelius
Vegas Jewelers


#7

Kelly,

For alloying you recommend purchasing 24K gold ingots, grain or
wafers , instead of coins, as the coins are usually 9l.7% pure gold.
I know that Krugerrands are less than 24K, but what about Maple Leaf
coins? I was told that they are pure 24K. If this is not correct, how
can one find out the true karet of them? This would be
necessary to know if one is planning to alloy them.

Alma Rands


#8

Lee, that was very sound advice about gold. You are right. It is not
an investment, it is speculation, and one should venture into this
territory with caution.

It seems to me, that given the current high price of gold, if one
bought now they would be violating the principle of “buy low, sell
high.”

Alma


#9

Hello Nena,

I am Stephen Wyrick, from San Antonio, TX and I am listed in the JBT
industry for 35 - 38 years.

I travel Africa and have since 1975. The only exception was the war
in Sierra Leone, Gambia, and most other Western African countries.
Not bragging but I have traveled 52 countries in all, and may go back
to the Congo soon!. I buy Gold in several countries and rough diamond
materials, very few coloured stuff, most of those small patches ore
worked and or bought up by the big boys…

Can you explain your interest and maybe I can help.

Stephen Wyrick, CMBJ CSMP
Gemmologist


#10

Alma- If you are going to work with the metal then buy Maple Leafs.
the Canadian Govt. refines them to a higher standard than the rest.
And yes, you can make much more money off of gold by making
beautiful things out of them.

Have fun and make lots of jewelry.
Jo Haemer
www.timothywgreen.com


#11

Alma -

Yes, the Maple Leafs are very pure (.9999, and .99999 for special
issues), and could be used for alloying. However, you will pay a
premium for doing so. Here is the wikipedia link to more

Besides finding data on the web, you can contact a bullion dealer
for more on the purity of other nations’ gold coins.
There are brochures available to them that provide such data.

In any case, gold should only be a part of an investment portfolio.
I can only tell you what I have done, and so far it has worked out
for me. But I didn’t risk anything I couldn’t live without.

Some of my own gold are coins that my grandad & stepdad bought. It
didn’t bring them any profit, but after I inherited the coins, the
price of gold rose considerably, so I have benefited. And one of the
Krugerrands became the first piece of gold that I ever worked on…a
part of it is now a pendant.

best regards,
Kelley


#12

Hi Nena,

Well, I thought I’d just chime in with my 2 cents on this one along
with the caveat that I am not a financial advisor.

I realize that your question began with the premise of investing in
"actual gold" and assume that you mean physically holding ingot or
bullion. It is important to point out that if you wish to physically
take hold of your gold, that is one thing, but if you are interested
in investing in gold primarily for monetary gain, then your better
option is to get into an ETF (exchange traded fund) such as GLD
which tracks gold prices. It is the best way to get the most return
for your dollar when it comes to gold as you do not have to pay any
refining charges or deal with selling your gold under spot to others.
As a general rule, it will always be hard to buy gold at spot (as
there is always some level of minting fee whether it be $10 for
ingot, $15 for Maple Leafs, etc.) and it will always be hard to sell
your gold at spot as you will always have some sort of refining fee
or percentage taken from the lot. However, with an ETF you pay only
the commission for the transaction (whatever your broker may charge)
regardless the size of your holding. From an investment perspective,
it is definitely the better way to go.

As far as the price of gold is concerned (when to buy, when to
sell), you need to understand a number of the reasons for the
movement in gold price.

Primarily, gold is a hedge against inflation. It is typically linked
inversely to the US dollar. When the dollar rallies, gold usually
falls. When the dollar weakens, gold usually rises. For example,
around March 9 or 10, the Fed announced it was going to be buying
$300 billion in long-term treasuries…

ie. printing money and debasing the US dollar. The following 9 days,
you can see how debasing the dollar caused a massive rally in the
Euro ($1.26US to $1.37US… a truly astonishing move for the
currencies market) which paralleled gold’s move of $893/oz. to
$978/oz. over the same period.

Because the value of gold is so closely related to the US dollar,
one metric for measuring the “estimated” value of gold is to compare
its price to the Dow Jones Industrial Average (DJIA). This is another
way of looking at its relative cost in the same way investors look at
P/E ratios (price to earnings ratio… the ratio of the stock price to
the company’s earnings). For example, let’s say that Company X in a
given industry has a P/E ratio of 15… Now let us suppose that the
industry’s average P/E is 18. By comparison, Company X’s stock would
appear to be undervalued by that metric and may be thought of as a
"BUY" to some investors (although one should never use only one
metric to value a stock!). In the same manner, gold can be viewed
relative to the DJIA. In 2000, it took 44 ounces of gold to buy a
share of the Dow (which makes either gold appear under-priced, or
the market to be over-priced). Currently, it would take only around 8
ounces to buy a share… which in turn makes either gold appear
over-priced or the market under-priced…depending on your
perspective.

This can also be done relative to the price of crude oil…(how many
ounces does it historically take to buy a barrel of oil). But,
ultimately, I believe all of the metrics used are just other ways of
looking at the cost of gold relative to the US dollar. Sorry to have
rambled on about this. I could talk for hours if unchecked.

Basically it boils down to this: If you believe that inflation is
around the corner, buy gold. If you believe that deflation is where
we are headed, then sell gold. Given the current administration’s
budget, the varying bailouts and actions by the Fed, inflation is the
most likely place we are headed for now (hence China’s
suggestion/insistence of a world currency decoupled from the US
dollar
as they are currently bearing $1+ trillion of our debt which they see
as being devalued as of late). Anyhow, that is just my thoughts on
the subject at the moment. I hope that helps you in your decision.

One final word of thought from Warren Buffet. He does not advocate
owning gold as it pays no dividend or interest… your money sits
until you sell it off at either a loss or a gain.

Quick side note on mining stocks (since they were mentioned). To the
best of my limited knowledge, mining stocks may not be a bad idea
right now. With credit markets tight, there is a good chance for a
lot of consolidation to occur among the smaller mining stocks. As
mining stocks will behave similarly to gold a lot of the time, you
may have better luck with them considering that a number of them pay
dividends and will also now have the chance to “double your bet” (so
to speak) with the possibility of a buyout.

Reminder: I am not an investment/financial advisor. Research things
carefully before you get into the markets and talk to your financial
advisor about what options may best suit you.

Best of luck!
Erich C. Shoemaker


#13
If you are going to work with the metal then buy Maple Leafs. the
Canadian Govt. refines them to a higher standard than the rest. And
yes, you can make much more money off of gold by making beautiful
things out of them. 

When I was in Canada (5 years ago) coins carried sales taxes. Wafers
were cheaper and not taxed. If 999 is not good enough you must have
better sources of alloying metals than I do (and not breathe on them
:slight_smile:

jeffD
Demand Designs
Analog/Digital Modelling & Goldsmithing
http://www.gmavt.net/~jdemand


#14

Alma

This is from the Wikipedia:

The Canadian Gold Maple Leaf is the official bullion gold coin
of Canada and is produced by the Royal Canadian Mint. The
brainchild of Walter Ott, it is one of the purest gold coins of
regular issue in the world, with a gold content of .9999
millesimal fineness (24 carats), with some special issues .99999
fine. That is, it contains virtually no base metals at all - only
gold exclusively from gold mines in Canada. 

And further from the Royal Canadian Mint:
http://www.mint.ca/store/mint/about-the-mint/our-products-1200028.

Introduced in 1979, our precision-crafted 24-karat Gold Maple
Leaf coins have become the standard by which other bullion coins
are measured. The world's first bullion coins to reach the
heightened level of 9999 purity, each one bears the 9999
hallmark, a mint mark and a reverse-proof maple leaf. 

Karen
Karen Bahr - Karen’s Artworx
Calgary, Alberta, Canada Under another 6" dump of snow
http://karensartworx.ganoksin.com/blogs/


#15

Who wants mined metals? Gold with or without White metals? I do
mining and have for to many yeaes. Stephen Wyrick, 210 260.0662