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Metals Market investment


#1

Dear Folks,

My Dad & I are considering investing in the Metals Market. We are
specifically looking at purchasing 24K Gold casting Grain, Silver
Casting grain & also Sheet & Wire in 18K Gold & Sterling Silver.

Another one of our investment considerations is gem quality Rough
Opal.

If YOU were considering a prospect such as this, what would you
invest in?

Thank you!
Sincerely,
Char
www.ejewelryoriginals.com


#2

Neither of them. It would be much safer to invest in the stock
market than either of the two things you are talking about. Gold and
silver are running at close to historic highs. Very bad timing on
this. Opal creates issues in being able to liquefy your inventory
quickly when you need the money.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
www.spirerjewelers.com


#3

Lottery Tickets.

Gold - where to start? Assay costs? Liquidity (Krugerrands vs.
unmarked scrap)?

No one should ever use the word “investment” in the same sentence or
paragraph as the word “gemstone”. Try to sell a loose diamond or
colored stone if you are not in the trade. I have spent myself rich
on rough. Still working on the second part of the equation where I
profit by it. Good thing I enjoy cutting so much.

What are the objectives? If it is a hedge against the end of
civilization you would be better off with.22 caliber bullets. They
will be the new currency and when you shoot a rat you have something
left to eat.

Robert Kyle


#4

Charlotte you did not say if you were investing for future jewelry
use or as an investment for profit. If for jewelry use I would by
24kt gold and pure silver in either coin, ingot, or grain. You can
always allow your own 18kt stock for casting and if you have the
equipment you can mill your own wire and sheet. This way you avoid
the expense of the milling charges and the alloy charges from the
refiners.

For investment for profit buy only those ingots or coins (no grain
as it is not marked) that are marked by the manufacturer as pure. The
cost is only slightly higher but they also bring a premium when you
sell them. Of course there is always rare coins which tend to
appreciate much faster than just the raw metals do.

Hope this helps.


#5

A good mutual fund. If you are just raging thrill seekers, don’t buy
sheet and wire, just buy bullion. You’ll never recover the forging
fees on finished goods. Go to Kitco.com, look at the historical
charts. There you wil see that if you had bought gold in January, you
would have made a whopping 3% on it to date…

http://www.donivanandmaggiora.com


#6

Charlotte - unless you and your dad are professional long term
investors -

I’d buy a mutual fund that included the metals market. If you don’t
have lots of money, and want to play the market, use options. If you
don’t know what options and futures are, don’t start here.

If you go to www.kitco.com and go to the pool accounts - they are
offering to sell one ounce of gold at $3.50US over what they would
pay to buy it. A 1000 gram bar of gold goes for $22,000+US, and
that’s a lot of cash out of your pocket to make $100 more or less.
And if you actually want to hold it, you have to pay for shipping and
insurance and that will pretty much chew up any profit. Oh, by the
way, the prices do go down too.

As to the rough opal market - many of us have many years in the gem
and jewelry business - and darn few of us know enough to invest
profitably in rough opal. If you cut stones, and you have years of
experience in opals, this might make sense, if you have a good
conduit to the miners. And are you the first to go thru the rough or
has it already been high-graded? What are you going to do with the
rough after you get it? How would you find it? Where is your profit
and to whom would you sell it if you aren’t a lapidary? This part of
the business is a fairly small part of the market. We buy from those
we know, and a new guy has to be around for a while to be trusted.

Simply said - buy what you need for the next couple of months, sell
what you make, and buy more. If you want to be an investor, do that
well and forget being a jeweler. Else - go to your studio and make
stuff.

Judy Hoch


#7

I would second Daniel Spirer’s comment on gold buying: don’t buy
unless you need it as part of your work. I don’t recall if the query
was from a goldsmith.

Opal more than almost any other stone requires expertise when
purchasing. By expertise I mean how much buying and selling
experience in opal do you have?

Neither of these, it seems to me, would be good as liquid assets.
Gold selling would cost you unless gold goes higher. Only once did it
reach $800; 1978, I believe.

KPK


#8

Your post raised the hairs on the back of my neck. The idea of
making an investment implies that you expect to make a profit by
selling your investment at some time in the future. For example:
selling dollars for gold now because you believe that the dollar is
going to devalue relative to gold and then someday selling the gold
for dollars because gold is then going to devalue relative to the
dollar. You need to be pretty smart and quick to pull this off. The
current price of gold is a market balance between a roughly equal
number of sellers and buyers who have opposite beliefs. That said,
lets address the vehicle for your investment in the precious metals.

Casting grain and sheet are not saleable back into the market unless
they are assayed and perhaps refined, this cost might be 3% discount
plus $30.00 assay charges on each piece (after you melt your grain
and pour bars). This is on top of the premium that you lost when you
bought your gold the first time. The same may be true for silver but
I believe the discount is higher. If you want to hold physical gold
you might be better off buying Canadian Maple leafs that can be
bought and resold with a spread of 1 or 2%.

Since this is a goldsmith forum you might be intending to use your
metal investment eventually for fabrication in which case you only
need to decide whether you feel gold is cheap now or expensive. Of
course if you have an emotional attachment to gold you can hoard all
want and bury it in the back yard.

Unless you have a lot of expertise in opal cutting you will very
likely lose money buying rough. Better to buy exceptional polished
gems and at least know what you are getting. Be aware that the margin
in gemstone dealing is much, much higher and more subjective then in
the metals and you will need to be very knowledgeable in order to not
overpay for your stones. Diamond and gemstone dealers believe that a
stone is worth whatever someone will pay for it. You might end up
being that someone. Very likely you will also find it very difficult
to sell them profitably afterwards. If you buy stones that you like
or love and expect to mount and sell them as jewellery someday, you
might be come out of it OK.

Be very careful about investing, if you do, learn everything you can
and still be careful. Take baby steps and get experience. And
whatever you do, don’t gamble more then you can afford to play with.
Good luck.

Dennis Smith - The Jewelmaker - Former life - Hard Asset Broker


#9

I remember the days when inflation was a big fear and silver was
going for $50.00 an ounce in bullion blocks.

Justine


#10

There’s a case to be made in developing an investment portfolio,
that holding (some) actual gold and silver could be an important
hedge, particularly against a falling dollar, and that it can have a
diversifying function that reduces overall volatility in one’s
portfolio. My understanding, however, is that you could do this best
through the gold ETF and the silver ETF (I forget the ticker symbols,
but you could find them pretty easily). I’ve also heard that CEF is a
good option, it’s a Canadian fund that holds actual gold and silver.
Paying the brokerage fees to get in and out of these funds would be
far cheaper and far more convenient, I bet, than collecting, storing
and trying to sell any of your own supplies. Of course I’m no expert
on these things, just another person trying to figure out the best
way to parlay my retirement savings into an early retirement so I can
make jewelry full-time.

Tracy Munn


#11
Paying the brokerage fees to get in and out of these funds would
be far cheaper and far more convenient, I bet, than collecting,
storing and trying to sell any of your own supplies. Of course I'm
no expert on these things, just another person trying to figure out
the best way to parlay my retirement savings into an early
retirement so I can make jewelry full-time. 

Of course, all you REALLY own with these funds is a piece of paper
with an I.O.U. that may or may not be good when you go to cash out,
especially if there is some type of corporate hanky-panky (remember
Enron?) or financial services meltdown.

Lee Cornelius
Vegas Jewelers