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THE ART OF BUYING OR SELLING GOLD

BUYING GOLD/SILVER, GOLD AND MONEY, GOLD OR SILVER BUBBLE, SELLING GOLD/SILVER   No comments yet

Precious metal is a well kept secret. Folks who own physical gold, or silver, seldom advertise their wise discretion. Few blab across social networking and less openly discuss the nuts and bolts of buying PM (precious metal). In most cases this leaves you, the novice, searching for the right metal offered at a fair price. It’s hard for me to put an exact percentage on how many newbies pay far beyond necessary but I will estimate more than half do, or receive less, than the metal recommended here at TPS (The Prospector Site).

FACT #1: Not all Gold is good

It is a misnomer that gold is always a good investment (paper gold can be the worst choice for wealth storage in many cases). Anything other than physical PM carries far too much risk considering our age of fiat correction and financial insecurity. For this reason alone paper PM is not worthy of today’s discussion or space.

Retail gold, like jewelry, is a blend of artistic effort and precious metal. An established value is always subjective but, nevertheless, still a store of value better than most of today’s “typical” investments. In times of economic despair jewelry returns to a value measured in melt worth. This is why I recommend new bullion, rounds or bars over jewelry.

All physical PM buyers pay a fee over and above the intrinsic value of a gold bar, round, nugget, bullion, etc. This “premium” is what makes those selling PM wealthy but offers no real value to you as the buyer. The older (or rarer) the gold hunk the higher the premium, very simple. In return…….. new bullion, rounds, and bars offer the lowest premium.

Most folks buying gold in 2013 are not collectors or speculators. They, gold owners that is, view the echos of economic recovery as back-ground noise and realize we very well could be facing the end of a great fiat currency experiment. For this reason alone all should own physical silver or gold.

I recommend due diligence before buying your first gram of gold. Old coins are cool but best saved for the experienced PM buyer. Proof coins are flashy but also best saved for those solidly vested in raw precious metal beforehand. Think low-premium PM offerings that are easy to store, insure, and someday sell or trade.

FACT #2: Not all PM advice is good

This site doesn’t sell silver or gold but I would love to know how many precious-metal peddlers hear, “I understand gold is a good investment. What do you recommend?” At such time the art of buying or selling PM is in the hands of a stranger who could be more profit inclined than making sure you receive the best bang for your buck.

I hear so many nightmare stories of good gold intentions going bad. These tales always include trust, deceit, disillusion, distaste, and eventually embarrassment. At the end of the day far too many pay far more than necessary, for PM, because they fail to arm themselves with education.

There is no reason to fall prey to the PM distrustful, not in the internet age. Your education should not come by way of solicitation. Hard asset sellers are always well rehearsed with trigger words and phrases. These trigger phrases stir emotion and prompt protection but have no place for those implementing a controlled PM plan.

The best source for education and advice always comes from the unbiased.

FACT #3: You will someday sell

I have a close friend that has owned physical silver for years. He has no plans to ever sell regardless the value, regardless the offering. What he doesn’t realize is that someday he or someone sharing his last name will sell, or trade, his buckets of silver. It could be for profit, it could be for freedom, or it could be to feed the family, who knows…… but it will trade hands someday.

I personally will not buy silver or gold that I can’t easily track real-time value. Sure owning a coin that spent hundreds of years lost at sea is cool but how does the average Joe know its true value. After all, the only guarantee we have is a fluctuating melt value, right? For this reason I recommend asking two questions before committing to buy; how much are you asking and how much you will pay me to buy it back.

The difference between the two prices is very important. As of August 25th, 2013, a one-ounce gold bullion will run a buyer around $1475. The same bullion, less the premium, will sell around $1390-$1400ish. A second-hand market will bring a few more dollars. By the way, some PM buybacks require a dealer or broker to notify the IRS, some won’t. Do you know the difference?

But our faith in PM has less to do with dollars with each passing deficit day. Gold’s true value is its exchange value. For instance, I pay less attention to what gold trades in dollars compared to how many ounces of gold it takes to buy an average home in my neck of the woods or a sandy retreat countries away. This exchange value is the future gauge of your net worth. Dollar value is relevant now but this could change quickly.

QUESTION: Thanks for answering my questions, DC. Yes, it’ll be scary if the governments get creative and do something like Operation Rize. Can’t agree more about diversification. As for the insurance, I think I’ll ask a jewelry store nearby first.

And what do you think is likely to happen in the future? Will we have a repetition of what happened in 1980, where PM prices skyrocketed and retraced later? But considering the world’s current level of debt, can the central banks raise the interest rates like they did back then? Or will we have hyperinflation? But are the central banks so stupid to allow that to happen? Will we stick to PMs forever, or will we have to switch to other assets someday?

Looking forward to your reply and thank you very much.

TPS Reply: You’re welcome, thanks for asking great questions. What happened to PMs in 1979-80 was amazing but only a small sample of our future. So many things have changed on a global level that will affect us all on some capacity. Some will prosper but most will fall victim to an existence that only existed because of a debt-based lifestyle.  I have great concern for those not PM protected.

TPS often hears from readers who boast over their debt-free lifestyle. This is great, and recommended, but the truth is all will fill the pain of worldwide default as it becomes painfully obvious trillion $ obligations can never be repaid. This mess is what happens when we live in a society consumed by the here and now. Our commerce world has consumed the minds and energy of far too many.

You’re right; central banks will send all major currencies into a level of inflation unimaginable. I’m not sure if hyperinflation is the correct term but, nevertheless, it will not be kind to those attempting to live on a fixed pension or income. Most victims will view these days of economic correction (disaster) as “depressed” not realizing such a time is nothing more than another example of what happens when a fiat currency is overproduced. Silver and gold will account accordingly.

A dangerous trio has hijacked America’s future. The FED (central bank), Wall Street and politicians now control our economy. Washington DC proper now boasts an economic boom while the rest of America suffers from a myriad of challenges including, but not limited to, low-paying jobs, rising cost of living, financial tension, etc.

The world’s central banks circle the wagons in order to save our fragile banking system but not willing admit this effort is futile, destructive, and unfair. Anyone relying on a currency, not real money or hard assets, will, too, soon realize wealth stored in paper is growing worthless. Such an era will bode well for those holding physical silver/gold and my prediction is this run will not end anytime soon.

Although, we will reach a point when other assets will become so affordable, in terms of gold/silver, that the temptation to barter will flush wealth out of PMs and back to traditional assets (like real estate, stocks, etc). I don’t see a PM bubble anytime soon, nor do I see anyone holding PM in a hurry to trade. Thanks for the great questions and comment.

QUESTION:  Have you noticed the national debt clock? This is only possible because of our digital non-existent currency age.

TPS Reply:  Yep, it keeps rising, right? This is what happens when a government grows beyond its tax base. My recommendation is to keep stacking silver and gold until it stops.

Our transition to a digital currency is right on time. How else can a currency realize such creation on a global level? We are in the fourth quarter of a fiat currency meltdown created, and now propelled, by nothing more than greed and a political failure to transmit honesty, integrity, and strength. Other than that — this administration and other political leaders are doing a fine job by systematically dismantling our country piece by piece.

 

DC Carlton is founder of The Prospector Site and author of the Amazon Kindle #1 Bestsellers Why Silver and Gold Will Go Higher and Storing Silver & Gold. If you’re looking for trustworthy PM assistance feel free to contact DC regarding his personalized consulting service. TPS doesn’t sell silver or gold; we represent you, the buyer, looking for affordable precious metal from honest trustworthy sources. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

 

 

 

 

 

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MODERN DAY GOLD PROSPECTING

BUYING GOLD/SILVER, GOLD & SILVER, GOLD AND MONEY   No comments yet

With many new readers joining TPS over the last few months I feel led to explain what the heck we do here. Our goals are simple as we continue to prove silver and gold as not only worthy but necessary. One reader recently asked why I named us The Prospector Site and truthfully this is a good question. TPS name perfectly describes our journey to prosperity and preservation while shuffling through sensationalism, facts and fiction. I founded this site around 18 months ago in hopes of making sense of something so worthy of explanation. I realized many years ago gold and silver confuses most new to metal, it did me, since most try to compare PM to other assets. This confusion compounds from misinformation, this is why our goal is to provide facts justifying PM and then let you decide its worthiness. Regardless, I am so very glad you’re joining us today.



To those new to silver and gold I encourage you to invest $5 in my book Why Silver & Gold Will Go Higher. I recommend this book not because it’s my work but because it’s one of the few PM books written by someone not selling silver or gold. The book outlines many relevant reasons why PM will rise without sensationalizing today’s economic correction. I don’t want you to buy one ounce of silver or gold until fully understanding why both are so very necessary to protect your family’s future.

Modern day prospecting no longer requires a gold pan or pick. Sure it’s possible a guy can still find a few nuggets hidden below crystal clear Sierra waters, but not likely. Your prospecting efforts are best spent doing exactly what you’re doing today. Prospecting in 2012 and beyond is less about price paid compared to ounces owned. This doesn’t mean we should pay a dime more than necessary but it should focus each owner on the long-term goal over price per ounce.

Modern day prospectors are not traders like the days of old. Think about this if you will. Old world prospecting required much effort to find gold with a goal to TRADE it for cash. Wow have things changed since no one in right mind trades gold for cash, not today at least, not unless under economic duress. Why you ask? The answer is the cornerstone to understanding PM’s usefulness so please read carefully.

Wealth held in currency based assets is declining at an alarming rate. Because of this we must find a new storage to save the little remaining wealth we still have. Trillions in wealth has disappeared over the last few years and trillions more soon will. Trading dollars, euros, yuan, etc into silver or gold provides a reprieve while foolish monetary controllers try to print the world back to prosperity. THIS WILL NOT WORK, NEVER HAS!!

The economic unraveling we describe today requires modern day prospectors to find (purchase) PM and then tuck it away. This is what I mean by hidden wealth or storing wealth outside traditional investment avenues.  No other form of wealth is as discretely hidden from overreaching governments and taxation as gold. No other storage of wealth benefits from such a time of economic volatility either.

Questions & Comments:

Question: I have a simple question and will keep it short. How do I know how much physical silver is enough? I asked my bullion dealer and she said to diversify with proofs, rare coins, and other metal contradictory to your opinion. I’m confused!!

TPS Answer: Congrats on making the decision of a lifetime by owning physical PM. It’s not long before nearly all my clients or readers ask this question and to be honest there’s not a rule of thumb. Each new day justifies not only owning silver and gold but justifies owning more PM. No one can tell you how much and if you give it thought the decision should be yours alone. I encourage you to do exactly what you’re doing today by furthering your PM education. You’ll know when it’s time to buy more, trust me.

Now, let’s discuss the advice coming from our bullion salesperson. Is their goal the same as yours? Hardly, their goal is to sale the most profitable PM for them, not you. This is why I advise all buyers decide exactly what they’re looking for, how much, and how much to pay before contacting a seller. I’m not against asking your seller questions but against relying on a salesperson to offer the best PM advice FOR YOU. This not only stacks silver and gold in your favor but eliminates PM confusion. Awesome, keep up the good work, you’re doing great.

Question: With all the talk of PM suppression I’m not sure what to think. If metals are suppressed isn’t it wise to wait before buying therefore paying less for physical? I’m buying bars of silver and each time paying less than the time before. Your thoughts?

TPS Answer: Thank you for the question, and using my PM consulting service. I completely agree too much is written today about PM suppression. Of course PMs are suppressed, name one asset not suppressed or supported. My opinion is suppressed or not physical silver and gold are necessary to grow and protect wealth. Who cares if you buy silver for less tomorrow than today if the goal is to trade dollars to PM?

I realize PM experts try to justify PM’s stagnate growth of late but all I see is added confusion. No one can stop the rise of physical PM we will experience over the next few years and because of this I still recommend buying silver without looking back. Your plan is wise so pay little attention to the manipulation or suppression talk dominating the PM world. Thanks for the great question.

WHAT ABOUT SHARING YOUR THOUGHTS OR QUESTIONS WITH OTHER READERS TOO? SEND THEM HERE.

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WHAT WILL HAPPEN TO THE SILVER MARKET?

BUYING GOLD/SILVER, GOLD & SILVER, GOLD/SILVER COINS   No comments yet

When I was around four years old my father and grandfather invested a full day in me and fishing. I can’t recall how many fish we coached to shore but I vividly recall asking far more questions than any father with a much-needed day off should endure.  Finally my father resorted to a generic reply of, “because that is simply the way it works” to each unanswerable question that only a four-year old mind can create.  Unfortunately, explaining the purpose of PM is far too important for a generic reply. Many of you are sending questions to The Prospector Site and we appreciate each question and comment, thank you. The value within each question goes beyond an answer so let me explain.  Gold and silver dialogue, or questions, create further discussion and interest in the one nontraditional asset each person should now own.  Not every question is answerable but each question is worthy of a reply. Today I want to share a couple of what I call common questions from a reader willing to invest time and money to preserve financial wealth via silver and gold, congrats.

By the way, don’t forget to sign up for The Prospector Site online newsletter emailed straight to you once a week. It’s free and available by registering here.



QUESTION:

Hello, I am an European reader and I am very fond of your site ( found about it while reading dailyreckoning.com ). I have read your website from the beginning, started last month and only now got to March. It has been very enlightening but I never said anything up until now. I wanted to read the whole site so that I could have a grasp on what the global scene was month after month, since March last year, basically reading the gold/silver economy trend, trough your posts. I have now stepped up and registered at Bullionvault.com buying small amounts of silver.

I would like to ask you 2 questions:

1. What will happen to the silver market if the copper is “the” next silver, will silver drop in prices?

2. Why if there is a gold dip, there is a silver dip at approximately the same proportion?

Thank you very much
Regards from Europe

PROSPECTOR REPLY:  Always great to hear from our European readers so thanks for the comment and questions.  I’m not sure if you know or not but you guys are in the news a bit lately?  You mentioned something that really grabbed my attention with an interest in the global scene as part of your decision-making process to buy silver.  I’m flattered our site is part of this decision so thank you for using us as a PM resource.  Starting with small amounts of silver is exactly how I advise clients to begin a soft entry into PM (precious metals). Silver is relatively cheap to own and easier to buy allowing newbies time to develop confidence in PM without spending boatloads of money in the process.  I do recommend owning both metals ONLY AS YOU FEEL COMFORTABLE in doing so.

Now, to question #1. I see no long-term drop for silver considering all worldwide currencies committing to printing themselves out of economic trouble.  Injecting fiat currency into world markets will drive up value and demand for real money, like silver, and copper rising is no more a factor than two ships rising from the tide, simultaneously.  My opinion is most metals in limited supply will find monetary attraction but nothing like silver or gold. Copper and nickel could easily be included in future monetary attraction but they will not suppress or replace silver, not in my opinion.

I see slim odds of silver doing anything but putting smiles on silver holding faces; this comes from a guy not selling silver or gold. Please stay in contact by letting other readers know how Bullionvault.com is working out (I’m assuming you’re using their vault in Zürich?).  Some PM advisers are hesitant to recommend passive storage but each person must judge risk accordingly depending on local volatility and government overreach. Diversifying storage is as important as diversifying wealth in general (hope this makes sense).

Now, to question #2. You are correct by noticing both silver and gold follow lockstep to monetary demand, kind of. Silver has one over gold and this one thing is a very big thing.  Silver is now the second most used commodity, we can thank modern-age technology for this.  Silver is a great conductor and technology now contributes to silver’s demand.  This means silver has monetary value (money) and industrial value simultaneously.  This is why PM experts feel silver undervalued and will close the silver to gold ratio very soon.  Paper silver suppression obviously is a major factor in today’s cheap silver prices (I hope all are taking advantage of discounted physical silver).

Regardless if (when) silver closes the gold gap; both historically parallel each other in true relevance and value.  This is because both metals are real money and no amount of fiat printing will change monetary balance.  Both metals float along inflationary rivers willing to rise to whatever point necessary to equal true value and worth.  This is why I started trading currency for metal ten years ago to the month.  I’m guessing this is why you are too.  Thanks for the great questions and welcome to The Prospector Site.

IF OTHER READERS  HAVE A QUESTION OR COMMENT WE WOULD LOVE TO HEAR THEM.  REACH ME HERE.


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READER ASKS: SHOULD I SELL SILVER TO BUY CAR?

GOLD & SILVER, SELLING GOLD/SILVER   No comments yet

Have you noticed the interesting precious metal opinions circulating the internet? We didn’t see the fuss back when physical silver sold for $4 but now with metal around $40 it seems many metal holders are truly seeing the power of  ownership.  This is what it is all about folks and congrats to you for having the foresight and now option to use real money any way you choose, very prudent.  Let me say there is not a right or wrong answer but we should look at several options before selling a perfectly good asset like silver.



Answer:

It all comes down to debt service so if you can afford a short-term payment consider hanging on to the silver.  Your silver is in the prime of its life and according to precious metal experts has plenty of room to grow.  Factor this growth in real buying power, not just dollar value, and it’s easy to see why 1:10 physical silver owners are sellers compared to buyers.  Looking back silver has appreciated over 400% in the last few years.  I know of few cars that are realizing this kind of appreciation.  It is hard to justify selling a real money asset like silver to buy a depreciating asset.

I’m not big on debt unless one, someone else is paying for it or two, the interest is fixed and costs less than what my metal is earning.  In this case I’m guessing your car is new enough to qualify for 5% interest or less meaning borrowed money is cheap and return on silver is high.  My other concern is once the silver is gone it could be hard and expensive to get back.  Cars are as common as any asset I can think of.

Another option is to sell a few ounces of silver to raise a down payment and then finance the balance.  It is always good to keep your term under 3 years.  Enjoy your car.

Thanks for reading The Prospector Site and feel free to sign up for our weekly newsletter.


NEWS WORTHY:

YAHOO FINANCE:  Layoffs, housing data point to chronic problems

“We have had a worrisome string of soft numbers which is painting a fairly bleak picture of the recovery,” said Sal Guatieri, senior economist at BMO Capital Markets. “The labor market is weakening according to the jobless claims numbers, confidence appears to be slipping among households and small businesses and home sales are still very depressed.”  Read it here.

NEWS WORTHY:

MARKET WATCH:   Late-hour Sell-off Sends Gold to 5-week Low

The decline was “follow-through selling after yesterday’s strong drop,” said Brien Lundin, with the Gold Newsletter. “The dour economic news recently, combined with dwindling hopes for any further quantitative easing in the near term, are weighing heavily on the metals.“  Read it here.

NEWS WORTHY:

MARKET WATCH:  The U.S. is too big to fail, right?

Since the 2008 crisis, we have seen an implosion of sub-prime and other private debt replaced by an explosion of U.S. government public debt — currently $14+ trillion — and this is coupled with the very real risk that we could default on our debt payments in August if our politicians continue to play a high stakes game of fiscal chicken and are unable to increase the debt limit.  Read it here.



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SILVER STALLS SO SHOULD YOU SELL?

GOLD & SILVER, SELLING GOLD/SILVER   No comments yet

I get a dozen or more online newsletters from guys that know much more about precious metals than I do with no doubt.  With these newsletters are charts and graphs and some could confuse a MIT graduate to be honest.  I’m sure graph lines pointing up compared with ones pointing down should mean something but to be honest sometimes I’m more confused then before.  If you follow our site  you know I’m not big on charts and graphs.  I have found when one expert is saying sell and another is saying buy maybe it’s time to use simple cowboy logic to bring order to the situation.  The question is should you sell some silver since it has run itself to a point of exhaustion, at least for a day.

If you are skimming through this post looking for a thumps up or down to sell let me save you some time. I have no clue if silver is going up or down tomorrow, the next day, or the day after that and frankly it doesn’t matter.  Sometimes writers start to believe they know more than they actually do but the truth is not one of us has experienced anything like the economic mess of today.  The idea of The Prospector Site is to give information that helps you decide what and when to sell/buy according to your own research and knowledge.  I honestly believe no one will look after your money as well as you can.

Nervousness prevails for some silver holders who don’t want to miss out if the bull runs on but doesn’t want to lose if silver busts. I understand this conflict but let me tell you friend what a problem to have when some families are nervous not over selling silver but their next paycheck.  Rarely a week passes without someone commenting on how they sold silver several years ago thinking it had run its course but now kick themselves for doing so.  My guess is the same ones that sold early reinvested into well thought out assets and probably did okay regardless.

Before you sell let me at least say this for what it is worth. Silver has been on a run like never seen before but I refuse to believe this is all silver has to offer considering the status of the US Dollar.  The undeniable truth is the masses have no clue how, where, or why to buy silver and won’t until a major spike sends silver onto every headline.  For the ones that have recently bought most have no clue what causes a bubble or how trading dollars for metal is wise.  Most bought because someone they trust said silver is a safe haven so off they went with dollars in hand like a kid chasing an ice cream truck.  This is completely opposite of the type of reader we have the pleasure of spending ten minutes per day with.  You are, or becoming, educated and calculated of the security in real money like gold and silver.  I’ll take my chances with silver correcting over a busted dollar.

QUESTION:  My financial adviser said if I must own gold or silver to not take possession of physical metal but paper instead.  I guess I’m confused on the difference?

ANSWER:  Paper ownership of precious metal is the most common form of gold and silver ownership today. Owning paper precious metal is similar to holding a stock certificate but the question that many are asking is the paper actually backed by an inventory of gold or silver?  Your adviser maybe  concerned with securing physical gold or silver from theft but today we have many options for physical ownership without actually storing metal in our homes.  Brink Inc offers a storage for precious metal for a fee and is just one example of a reputable firm that provides this type of service.

Feel free to read more about storing physical metal here.

TIP OF THE DAY:  Be very cautious of advertisements offering rare gold coins with healthy premiums.  Remember the best coin to buy, regardless if gold or silver, is the one with the lowest premium over spot unless you are an experienced coin investor.  Ninety-nine percent of us are not experienced rare coin investors.

FAIR PRICES OF PHYSICAL GOLD & SILVER (9:30 am MST)

  • ONE OUNCE SILVER BULLION:                  $52.16

  • ONE OUNCE SILVER ROUND:                      $48.82

  • ONE OUNCE GOLD BULLION:                      $1652

  • ONE OUNCE GOLD BAR:                                $1611


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LOOK WHO IS BUYING DISCOUNTED GOLD & SILVER

BUYING GOLD/SILVER, GOLD & SILVER, GOLD/SILVER COINS   No comments yet

Most commodities offer discounts for volume or bulk but silver rarely does and gold will but you better have a fat check book.  Ask nearly any broker or shop for a discount and watch how quickly they look over your shoulder and to the next customer willing to pay full price for metal in inventory.  So where does that leave metal buyers/sellers looking for a fair deal?  Maybe we should be looking at discounted silver and gold from a different perspective.

Yesterday after I picked up my son from school he asked if we could visit a pawn shop in town.  I had not been in this shop so I had no idea what to expect but something my son asked me just before entering made me think about discounts.  He asked if I thought it was possible this shop had silver and might sell it for less than market by not knowing current prices.  This might make sense to a kid but I can tell you there is not one shop that doesn’t know silver is hot and unless they are facing cash flow issues full price is the offering.

But the fact is many buyers are getting 5% to 10% discounted metal even in this day and most of these transactions are right under our noses.  The problem is the guys buying are paying spot and then reselling for market which is always over spot.  Unlike the traditional investment mentality of buy low and sale high most sellers are content to give up profit based on an outdated mind-set.  I recently went into my local coin shop and asked if he was willing to sell a couple of gold pieces on consignment.  His reaction was quick and firm by telling me no way, no how, since most sellers don’t even question selling at spot so why should he accept consignment?

Of course coin shops and brokers argue the difference in spot and market leaves room for market fluctuations but this excuse only holds water in days gone by.  Most shops and brokers can’t keep inventory in stock so why should sellers give up 5% to 10% in an explosive market like today?  Five minutes on Craigslist ( see it here) and you will see buyers 5:1 over sellers looking to capitalize on discounted (spot) metal for those willing to sell.

The only thing standing between fair prices for sellers is the nerve to ask for a better than spot price.  The time is right for this type of bravery since soon shops and brokers will be hungry for inventory realizing sellers will only be encouraged by spot +.  If you are looking to trade gold to silver or just liquidate some of your stash look outside the traditional box of normal buyers for your metal.  You are the one who took the risk so why sell short? The precious metal market as you know it is about to change so our thinking must change with it.

QUESTION:  My local coin shop is selling silver $5 over spot, is this a good price?

ANSWER:  It depends on how much you are buying and what type of silver.  American Silver Eagles are the top shelf of physical silver but foreign silver and rounds will go for less. If you are buying twenty ounces or more at a time it might pay to go online for a deeper discount even with shipping.  The benefit of a coin shop is cash and carry when some online brokers will be weeks, maybe months, to receive metal.  Of course your price is “locked” so any market movement is your benefit or loss.  Online buying and selling will be the next emerging precious metal market because of security and value.

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WHAT YOU SHOULD KNOW ABOUT SILVER

GOLD & SILVER   No comments yet

Most would say an investment that realized 75% gains last year should be the last place a new investor plant money.  I would agree to stay clear of silver, without hesitation, if it not for uncharted economical waters.  Personally I would invest in silver if it was $10 an ounce or $60 per ounce.  It’s not that I feel lucky or like donating it just comes down to who will be the last asset standing.  If you are in search of a way to protect your money I feel your pain.  Let me break down what you must know about white metal we commonly call silver.

The reason I’m so cautious about influencing new investors on metals is because I want the decision to be yours by way of knowledge and not advice.  The fact is we could wake up tomorrow morning and silver be down 25% on some wild card not considered.  Its possible but not likely.  What is more probable is that continued spending of printed money will push your dollar’s value down.  What is more likely is prices of everyday necessities will go up because of devalued dollars.  What is more likely is fear and mistrust will lead massive amounts of money into precious metals like gold and silver.

SILVER COMPARED TO GOLD: Silver is true money by proof of its reference in the Bible.  But how does it weigh up against the other real money so commonly called gold?  Historically silver runs 14:1 compared to gold with gold being the most valuable.  Recent values have seen this ratio move from 60:1 to currently running around 38:1.  If you are wondering what these silly ratios represent the answer is more money is going to silver than gold.  Does this alone mean silver is a better investment than gold?  Not by a long shot does more money being spent on silver mean it is stronger than gold.

EVERYONE IS A PLAYER: I recall a flustered auctioneer lowering the opening bid low so “everyone could play.”  I guess it can be said silver is priced to where everyone can play so this affordability seems, well, affordable enough for new investors.  Some buyers are motivated by fear, some by greed, and some because they have no idea where to park money so silver it is.  What ever the motivation, it is driving silver too highs not seen it years.  On a personal note, I don’t look to what an investment has done but what drives an investment and how much room for growth.  My opinion is silver has plenty of vertical left in it.

WHAT’S SO BAD ABOUT DEMAND: Silver and gold have one thing in common and it is a limited supply.  Unlike other assets that can be produced or built to meet demand, metals can’t.  It takes a lot of time, money, and work to extract enough silver to make an ounce.  Couple shortages with high demand and you have the perfect storm for price increases.  This demand only drives the silver market beyond the value of silver itself.  What I mean is physical silver has two value parts to it with one being the silver content itself and the other being the demand and speculation part.  Not to mention a small part for mining, minting, and selling physical silver.

QUESTION:  Is silver a better investment than gold in your opinion?

ANSWER:  Silver is like the new baby and gold is like the three-year old having to adjust with a new kid in the house.  To say one is better is hard.  I do like the fact silver is more affordable and has the potential for increased demand.  Sorry, not a defining answer.

TIP OF THE DAY:  If silver looks like a wise choice to you watch for the next dip if time allows.  Silver has been on a good run since late January and is due for a pull back.

FAIR PRICES IN PHYSICAL GOLD & SILVER (11:15 am MST)

  • ONE OUNCE SILVER BULLION:                                  $42.08

  • ONE OUNCE SILVER ROUNDS:                                    $39.74

  • ONE OUNCE GOLD BULLION:                                      $1496

  • ONE OUNCE GOLD BARS:                                              $1460

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BEST WAYS TO SELL YOUR GOLD

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One of the confusing things about gold/silver ownership is how to get rid of the stuff when its time to move on.  Sure your broker said they would gladly buy your metal back but is this the best way to sell?  After all aren’t they in the selling business so maybe we should look at a few other options to get you the most bang for your metal.  Make no mistake about it there will be a day when selling will be in your best interest so establishing a plan now makes sense.

Thanks for reading The Prospector Site.  Our goal is to provide unbiased information so you can formulate your own opinion and not rely on ours.  We are not brokers nor do we receive any commission if you buy precious metals.  We do recommend not taking our word, or anyone else’s for that matter, that gold and silver are great investments but do your own research.  I personally think metals are the best investment for my family and love the idea of deciding my own financial future.

SELLING YOUR GOLD: The best way to sell your metal is not one I recommend to many but it is the most profitable.  The most profitable way to sell your metal is to someone in your neighborhood or someone you personally know.  The only way this works is by letting folks around you know that you are sitting on valuable physical gold/silver and looking to sell.  I don’t like the idea of giving up discretion for profit and security.  If you do go this route be as cautious as possible.  Normal people do funny things when money is one the table.  Nevertheless, this is your most profitable way of selling by cutting out the middle man and going straight to the new buyer.

There are perfectly safe options to sell physical gold/silver and the best way for you depends on the amount you want to sell.  If you are looking for a little cash to take your family on vacation then selling just a few coins will work.  Selling the coin (s) to your local coin shop makes perfect sense if we are talking about a coin or two. If you are wanting to pay off an equity line the selling process is completely different.  Your selling broker, or any broker for that matter, may pay more but the cost to ship will be a factor.  Spreading this cost over several coins makes sense but not for one or two coins.

I recently sold several gold coins via my broker and used these proceeds to buy silver coins.  The broker paid me $17 over gold spot and gave me 30 days to commit to a lock in price.  This means I was able to buy my silver coins on a good dip but not have to lock in my gold coins that I was using to make the purchase of silver.  I shipped off my gold (your broker will email over shipping requirements) and then waited for the gold market to bounce up.  It worked out good for this situation but could just as easily dropped so understand there are no guarantees.

EBAY: EBay is another option and many gold/silver coins are sold on this site.  I like to use EBay to see movement of market value of rare coins since many brokerage sites don’t post these values.  One thing to understand about EBay is that they are an online auction and fees are stacked against the seller.  The fee breakdown is a little confusing but are around 10% but drop down to around 2% at a certain dollar amount.  The benefit is selling at market value all with protection of PayPal type pay systems.  This is helpful in eliminating crooks and scams but use caution regardless.

COIN SHOPS/PAWN SHOPS: We touched lightly on coins shops so let me expand.  Coin shop owners are a different breed for sure.  They enjoy the hobby aspect of collecting/dealing coins but are starting to see the profit potential in the investment side of gold/silver.  Don’t expect coin shop owners to be experts in precious metal investing.  They have the same business overhead as any business and turning inventory is just as necessary as any business.  What they do understand is gold/silver is moving up and their inventory of coins are loaded with these same metals.  If you are going to sell to your local coin shop educate your self on current trading value before you commit to sell.  Most coins shops make profit by buying at wholesale and selling at retail.  The money you leave on the table is the price for instantly liquidating metal to cash.  Many shop and pawn owners love to haggle so bring your negotiating game with you.

TIP OF DAY:  Much is written that shortly after 9/11 coin and pawn shops where open and ready for business when bank ATM’s where down.  Cash is king but only for those that have it.

QUESTION:  I don’t really understand how a broker works or why I should use one?

ANSWER:  Precious metal brokers deal with huge volumes of gold and silver and work off small commission percentages.  These same brokers work in real-time value and like the stock market this value changes constantly when markets are open.  This is why your local bank doesn’t sell gold/silver at least in large amounts.  Spend a little time online visiting multiple precious metal brokerage sites to familiarize yourself with the buying and selling process.  Some have inventory on hand some don’t.


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