Anybody collect gold?

Harry Callahan

Harry Callahan

Fresh outta warranty
Gold Member
Joined
Mar 17, 2002
Messages
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Sheesh. Gold is thru the roof. About ten years ago my bro-in-law came back from a gun show with a $20 Double Eagle in a proof pouch and told me he was gonna start buying a little gold from time to time (as finances allowed). Since then he's aquired a bunch of bullion, a little here and there. Dang how I wish I'd have at least looked into it. I just read that the spot price is 1050. Unreal. :confused:

I know a lot of this price actually reflects the weakness of the dollar and not necessarily the "strength" of gold. Would buying into this at such an overheated time be a fools game? I'm thinking about buying a 1/4 oz Kruggerand coin.

Anybody know anything about gold?
 
One thing is for sure, the price of Gold ain't going no south. So anytime is a good time if you have long term investment in mind. Its only gonna increase as time passes. You can and should actually hedge the cost by buying a little every month. That way, if the cost goes down a little bit for a while, you can take that benefit.
 
Buying gold is not an "investment" but rather speculation.
Only profit is given by the difference between cost and sale price.

As far as speculation goes, you can probably go better than gold.
 
Well, I just found out that due to spiraling global demand for bullion, smallish denominations aren't readily available. Blanchard has 1/2 oz Eagles and some 1/2 Canadian leaf. They've got anything a fellow wants in 1 oz coin but that's 1100 bucks. These 1/2 oz coins are going for six bills. Yikes! The sales rep makes a strong argument and I'm sure he knows what he's talking about. But six hundred bucks plus shipping? Man I should have bought these things back when my bro-in-law mentioned this. He'd think I was goofy if I bought a 1/2 Eagle for six notes. (Unless, of course, I bought it from him). :D

Looks like ebay is gonna be my best bet for the smaller denominations like 1/10th oz. Of course, the idea of buying bullion off ebay doesn't exactly inspire confidence... :mad:
 
Put it this way , unlike stock and bonds , gold will never lose it's value ( and always be worth something ) unless the human race dies off.
:)


Tostig
 
Harry I know a lot of this price actually reflects the weakness of the dollar and not necessarily the "strength" of gold. Would buying into this at such an overheated time be a fools game? I'm thinking about buying a 1/4 oz Kruggerand coin. Anybody know anything about gold?[/QUOTE said:
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Harry,I started collecting coins in 1943 & never stopped. It was a Godsend during 2 downs in my personal finances,once I sold 107 hafdollars for just over $4,000 ,only because I had several key ones.Recently I sold more for $2,700, again with keys & exotics.

Sorry to say,I just have one VG $20 & 5 BU $5.00 gold pieces. During my lean youth an AU $20 could be bought for $ 35 & BU's for $65.

I agree that gold will continue to rise & the dollar will weaken,maybe severely. A new factor is the discovery of prime gold fields opening soon in China . Time will tell but gold will not fail us . The Jews knew that in WWII.


Uncle Alan My heroes wear combat boots......:thumbup:
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Tostig said:
Put it this way , unlike stock and bonds , gold will never lose it's value ( and always be worth something ) unless the human race dies off.
:)


Tostig
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Well, it will not lose all its value, but that actually is of no meaning to someone willing to make profit. Because he can experience a loss very easily.

Here is a chart with inflation adjusted price of gold.
Gold_inflation.gif



E.g. buying gold in 1980 would bring you what gain? Or buy/sell combination anywhere between 1933 and 1970?
 
Huugh , my point was that investing in gold , you are investing in something truly tangible , not just some words on paper or data on a PC screen.

IMO one should diversify in investments.
 
In my life time the time to buy gold was when nobody cared about it and the price was stagnant and the time to sell it was when everyone was talking about it.

That formula seems to have worked in my case.
 
If gold is such a great investment, why don't Monex, Swiss America and all the other dealers keep it? I bought silver and some gold when the price was low and I sat on it for 10+ years waiting for the prices to rise. I got tired of looking at it and sold it for a small profit. I actually lost money due to inflation.

All the dealers were predicting huge profits from precious metals. It didn't happen. As huugh pointed out, gold would have to rise to $2145 just to equal the 1980 price.

Here's a quote I heard a long time ago.

"A gold mine is a hole in the ground with a liar sitting on top."

The same goes for gold dealers. It's true that gold may never be worth zero, but the $1000 gold you buy today could be worth $300 in a few years.
 
but the $1000 gold you buy today could be worth $300 in a few years.
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As opposed to say , stocks etc that would be worth zero if the market took a dump , which can and most likely will happen again if murphy's law applies :)

I hear what you folks are saying , my point was that it is a sound investment in a perpetually shaky/shady world economy. ( nobody said you would get rich quick investing in precious metals.)

Tostig
 
I bought some gold & platinum bullion awhile ago; small pieces. They are in my lock box. I would like to get more gold & platinum when I can afford it.
 
Hot topic - I am an avid investor and here is my advice for what its worth.

My portfolio is comprised of about 5% gold and that is enough for me.

First things first, any readers here who have debt, pay it off before jumping into this gold frenzy - you will save more by not paying the interest than you would buying gold.

Secondly, I'm not going to say dont buy any gold, but, be realistic and dont sell your stock or cash out some of your IRA to pick up gold.

Thirdly, I think it is foolish to have the gross majority of ones portfolio in gold - or any single thing for that matter. DIVERSIFY.

In my eyes the cost of carry on gold is its achilles heel - I would much rather have any investment that pays a dividend. It costs YOU money to hold gold. Even a 3% dividend in treasuries will most likely offset gold appreciation in the long run - gold has mostly performed well only when we are in panic mode - when the panic reaches its end, the price of gold will adjust, as it always does.

There are simply better long term investments out there such as stocks, tax free munis and real estate that should play a larger role in your portfolio.

Now with that said, if China moves from partially owning US treasuries to owning gold, the price of gold will simply go through the roof :eek:

In the end its all a gamble when it comes down to it - my advice to all the readers here is to find a good portfolio manager - check his loses and gains over the past year - and do what he tells you.
 
Hey Huugh, thanks for the graph, it is very enlightening. Back in 1980 I was waiting until gold hit $900 to sell. Needless to say, I didn't. If I sell now I will more or less break even on what I put in back in the 70's.
 
Tostig said:
As opposed to say , stocks etc that would be worth zero if the market took a dump , which can and most likely will happen again if murphy's law applies :)

I hear what you folks are saying , my point was that it is a sound investment in a perpetually shaky/shady world economy. ( nobody said you would get rich quick investing in precious metals.)

Tostig
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From what I have seen in the 15 years since I retired gold seems to go up as the stock market goes down. There is a lot of hype right now about gold. As has been said, people are panicky right now so gold looks good. If and when the stock market comes back, I expect gold and silver to drop again.

Of course, I am no expert, but neither are the experts. ;)

In 1995, I bought my wife a 1/2 oz. gold panda for her 50th birthday. I don't remember exactly what I paid for it, but it was less then $200. Of course, I also bought a 14k mount for it and an 18k chain. The total was less then $300. What's it worth today? $700? Big whoopie.

The thing is, unless you can buy gold or silver in significant quantities, you are not going to make any significant profit. Is $10,000 going be a life changing amount of money?
 
Buy it as scrap from people who are desperate in need of cash - then at a discount

...not coins at retail price...

those dealers have a markup and when you sell back to them you loose then too...
 
UffDa said:
The thing is, unless you can buy gold or silver in significant quantities, you are not going to make any significant profit. Is $10,000 going be a life changing amount of money?
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Sage advice.

Pay off your mortgage/debt instead.
 
Can't believe so many of you "gold members" aren't high on gold. Just kidding.

I'm also of the opinion expressed by others here that gold isn't much of an investment. Maybe a decent "store of wealth" if the world goes Mad Max, but I doubt you'll ever get rich with it unless you were already rich enough to buy huge amounts of it to leverage for profits.

But is is pretty!
 
Harry Callahan said:
Well, I just found out that due to spiraling global demand for bullion, smallish denominations aren't readily available. Blanchard has 1/2 oz Eagles and some 1/2 Canadian leaf. They've got anything a fellow wants in 1 oz coin but that's 1100 bucks. These 1/2 oz coins are going for six bills. Yikes! The sales rep makes a strong argument and I'm sure he knows what he's talking about. But six hundred bucks plus shipping? Man I should have bought these things back when my bro-in-law mentioned this. He'd think I was goofy if I bought a 1/2 Eagle for six notes. (Unless, of course, I bought it from him). :D

Looks like ebay is gonna be my best bet for the smaller denominations like 1/10th oz. Of course, the idea of buying bullion off ebay doesn't exactly inspire confidence... :mad:
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The reason they aren't available is because of the Economic Armageddon doomsdayers
They are hoarding them
The hoarders probably stop of at the gun store
"Give me 100 boxes of .223 and 100 boxes of 9mm"
Then they walk down to the coin shop
"Give me 100 Krugerands and 100 American Eagles"

The reason gold is up is because of speculation about "upward inflationary pressures" in the near future
and the weak dollar
and the media driven crisis==>
The other reason Gold is rising now is that it is acting its role as a "crisis hedge". Back in 1980 the real reason gold prices were rising was the international crisis arising from the Soviet invasion of Afghanistan and the Islamic Revolution in Iran. The world was in turmoil and inflation was out of control so everyone was scared. When people are scared a paper IOU is not enough.
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Historically gold (gold and precious metals) is POSITIVELY CORRELATED to inflation
That is why the Suze Orman's of the world recommend a certain portion of your portfolio as a hedge against inflation

That is what I was taught
However, gold is at an all time high and inflation is LOW:confused:
Is this what economists call an anomaly?
I don't know
Maybe the crisis factor overpowers the inflation speculation factor?
Only time will tell if gold prices really are positively correlated with inflation

http://www.inflationdata.com/inflation/Inflation_Rate/Gold_Inflation.asp

http://en.wikipedia.org/wiki/Gold_as_an_investment

I think in one year
Gold will be about $750 a Z
The market will correct it self from this crisis/fear
I could be wrong though;)
 
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