see the post i just wrote above this one.
Hi,
I have been following your journey of refining strategy for your metals…I am glad you have been procrastinating on your process because the metals have increased greatly since the start of your posting (yay!)
you seem to have quite a bit…maybe, just pull the trigger and send some out under the 10K annual threshold.
at least take advantage of the current pricing on some of your inventory…income average…?
just my musings, not financial advice!
Julie
At the current price of precious metal, it will take years to evade the 10K threshold for the IRS form 8300. I don’t even have an idea of how much this big pile of metal is worth now. The price keeps rising for all metals.. Gold and silver as a store of value is unexcelled. Holding on to it and transfering it to my estate may be the best thing to do. 400 troy ounces of ugly raw sterling ingots is worth at least 25K, @ $80 per oz. The refinery will take a 20% cut if I cashed out. More if returned in investment grade ounce silver bars, which is what I really want.. In addition to ingots, I have another 5lbs of fine silver medical electrodes that are gold plated- another 73 troy ounce, at 5.8K That is only half of the silver I have to deal with. Another 25lbs in coins, Most are Mexican silver coins. However, there are many that are proof sets, worth far more than their weight in silver… A welter of Kennedy half dollars, Morgan $1 pieces, even some Third Reich silver coins. These will all have to go a coin dealer for sorting and appraisal before they can be sold. My mother was a coin collector back in the 1920’s to 60’s, I inherited this stash of coins with a zero basis. 3 troy ounces of 18K gold is another 10K…This is a HIGH QUALITY PROBLEM. (much better than low quality problem)… The spot price of gold at this writing is $4,471, silver $78.87. Gold found its floor at 4K, 4,4K seems to be the next floor. Silver had a floor of $60… now the floor is likely to be $70 at minimum. Platimum spot is at $2,305…I also have precious metals as insurance. Insurance against the weakening of the dollar, collapse of the global economy due to trade wars and a deep recession in the US, political instability which just had a quantum jump. Precious metals and its proxies, the gold mining companies comprize 5% of my total portfolio wealth.
I expect to see a pull back in the price of precious metals by 30-50%, with metals languishing for years before another tremendous burst in the price, as has been the history of the pricing of metals However, this time may be quite different. Central banks are increasing their stores of gold, selling dollar denominated assets- US treasury bonds. The US national debt growing by the deficit balance is unsustainable. All fiat money growth has is no longer sustainable. Any default on US bonds will cause the dollar to plummet in value. The fundementals of precious metals are intact. The price will only continue to rise. A 4.9K price target by the end of this year is not without reason. Silver could hit another all time high of $100. A copper shortage is also looming. The poor man’s gold is silver, the poorest man’s silver is copper. Copper is at all time high of $5.80-$5.84/lb. A pound of copper is 1/ 4 cup…Copper futures are trading at three months for $6/lb, Aluminum is another all time high at 1.60/lb… recycled soda pop cans fetch 60 cents a pound at a recycling center…All metal prices will continue to rise in the next year and beyond.
I don’t think you really a problem. People who can pay for gold and silver will pay for jewelry, The greatest value in jewelry is the craftman’s labor. Transforming a lump of gold or silver into a high quality, high beauty piece, is where the value lies. Jewelry has always been a discretionary spending item. Those who have the income will continue to buy jewerly no matter the price of the metal in it. Discerning buyers look for beauty and esthetics, not so much for the value of metal. The exception to the rule is the buyers looking for an engagement ring and wedding ring to follow. Even the poor will buy these pieces for their beloved. Money is saved by using synthetic diamonds. The value of the metal is a minscule part of the total cost.
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What you describe as a current glut on silver at the refinery level, echoes what happened when the Hunt brother’s effort to corner the market on silver drove prices to historically extreme highs (for that time).
Once the refiners began to lose a market for the refined silver, the prices for silver dropped like a rock, back to about where they started.
Just a thought, and a word of caution. I started at the bench when gold was @$75/oz. and have seen this all before in various forms.
Agreed! I just did the math on my bread and butter rings and they use ~.2 oz sterling so my cost is now only ~$25. I’ve only raised prices $10 and still maintaining sales. I’m low level and work more on volume and sprinkle in some more “advanced” art pieces along the way. I’ll concentrate on smaller gems at Tucson this year though and put more thought into higher priced items.
the silver glut just got started. silver futures dropped. contract and commodity basket rebalancing is on going, driving down the price of silver. I still don’t expect it to go below $60, $70 is more likely to be the floor. Gold dropped only by a little, holding at 4,450….It still doesn’t really matter than much what the price of metal is. Metal is still only a small part of a total piece of jewerly’s price. This history of dollar value of gold and silver has had wild swings to both the down and upside. A 35-50% in drop in value has been a historical average for downside swings. The Hunt brother’s attempt to corner the silver market was back by their personal fortune in oil. Silver peaked at $50 at the time, it was insane.,. the public was selling everything silver that they owned. Family heirlooms were melted down. Antique silver was melted down. Even silver plated metal was scavenged for silver. The market crashed when Hunts oil fortune was exhausted. The Hunts went bankrupt. A century earlier, Jim Fisk and Jay Gould also attempted a gold corner. Jay Gould lost a fortune also. But as one of the wealthiest man of his time, he managed to survive- barely… This time around, I’m not sure that history will repeat itself. The fundemental economic forces are eroding fiat paper money. The US dollar is declining. In the 1960’s a dollar then is only worth a dime today. The cumulative effect of a 4% inflation average rate from 1960 to the present, has eroded a dollar to a dime. In addition, the US currency is backed by the “full faith and credit of the United States Goverment”… we live in strange economic and political times. Neither blue nor red administrations have addressed the unsustainably growing national debt. Each administration runs a new record deficit, added to the national debt. Every person, every corporation could provide free labor, free services, free goods for a year and a half to pay off the national debt. I don’t see that there is any political will to fix our problems. This growing debt is self compounding- more dollars are borrowed to finance the interest on the debt. The credibility in the credit and faith of our country is being undermined. Other paper money currencies have the same problem but to a lesser extent. Only Japan is in worse shape. The Euro has appreciated against the dollar by 10% over the last 1.5 years. I never was a gold bug until I realized that gold is insurance against an dollar catastrophe.