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Patience
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1,751 Posts
Just bought physical last night because we use silver at work and I got enough to cover me for 6 months. I know people like buying silver as a proxy for gold or for hard times but I wonder if it wouldn't be better to buy less metal but hold it as gold in a smaller, more valuable package. If you need it as a proxy for dollars, it would be more likely used for major purchases anyway. Just wondering.

Broker feels that oil is a better play for a pure investment as eventually every citizen needs to use it whereas silver is largely a hedge. Oil has also gone so low that by buying a major or oil itself, the 2 yr gains will be substantial with little practical downside. So I'm doing that spread out over 3 weeks to cost average.
 

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Grand Poobah
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Seems to me there are different reasons to buy precious metals.
1 is as an investment or a hedge and the other is as part of your SHTF preparations.
Both silver & gold would have use there. Silver would probably be best for smaller purchases.

Correct me if I'm wrong but as an investment doesn't physical holdings cost more and have greater transaction fees?
 

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Premium Member
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6,828 Posts
Just bought physical last night because we use silver at work and I got enough to cover me for 6 months. I know people like buying silver as a proxy for gold or for hard times but I wonder if it wouldn't be better to buy less metal but hold it as gold in a smaller, more valuable package. If you need it as a proxy for dollars, it would be more likely used for major purchases anyway. Just wondering.

Broker feels that oil is a better play for a pure investment as eventually every citizen needs to use it whereas silver is largely a hedge. Oil has also gone so low that by buying a major or oil itself, the 2 yr gains will be substantial with little practical downside. So I'm doing that spread out over 3 weeks to cost average.
playing oil is much more difficult and risky than buying a physical commodity. You are forced to buy futures. While the forward curve shows oil "should" be near it's lows, curves are not always accurate. When you are playing in commodities, time is not your friend. If oil prices dont move in the right direction for you in the near term, you are screwed. Better off buying an oil company or an MLP like a pipeline company IMO.
 

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Premium Member
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Seems to me there are different reasons to buy precious metals.
1 is as an investment or a hedge and the other is as part of your SHTF preparations.
Both silver & gold would have use there. Silver would probably be best for smaller purchases.

Correct me if I'm wrong but as an investment doesn't physical holdings cost more and have greater transaction fees?
Yes, most "gold" companies charge you a premium, plus commission, plus shipping, etc. In some cases your net cost can be as much as 10% above spot. I personally prefer gold or silver trusts. They are like ETFs, but actually own the physical asset. Annual fees are normally less than .5%, and if you have a discount brokerage account, transaction cost is next to nothing. You are also completely liquid to sell at any second if you choose to take a profit or cut a loss.
 

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Registered
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3,289 Posts
Just bought physical last night because we use silver at work and I got enough to cover me for 6 months. I know people like buying silver as a proxy for gold or for hard times but I wonder if it wouldn't be better to buy less metal but hold it as gold in a smaller, more valuable package. If you need it as a proxy for dollars, it would be more likely used for major purchases anyway. Just wondering.
If you believe you will have need to transact in physical metals then buy silver. Ever try to get change for a gold bar?
 

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Borders, Language, Culture
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Yes, most "gold" companies charge you a premium, plus commission, plus shipping, etc. In some cases your net cost can be as much as 10% above spot. I personally prefer gold or silver trusts. They are like ETFs, but actually own the physical asset. Annual fees are normally less than .5%, and if you have a discount brokerage account, transaction cost is next to nothing. You are also completely liquid to sell at any second if you choose to take a profit or cut a loss.
But - in a market panic, the Feds could halt trading & put all kinds of restrictions on the transactions. For a SHTF scenario, I'd buy physical metals. For a short term speculation, then ETF is better.
 

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Patience
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1,751 Posts
If you believe you will have need to transact in physical metals then buy silver. Ever try to get change for a gold bar?
My assumption has always been that rule of law will return in a year or so following the worst of likely events. Historically, during crisis periods, barter for services or necessities dominated commerce as you can't eat or shelter under silver. For people on the move or in camps, high value easily carried/hidden and identifiable items were used for bribes, weapon procurement or tolls thus my thinking about portable gold. When things became more stable, proxy currencies for barter such as metals played a bigger role as a store of value. By the time this happens, the dollar or its replacement would be the coin of the land. Fiat currency is critical to modern government so it will come back and steeple will clamor for it. All that said, I don't have metals because I personally see more utility in "things" with intrinsic value.

As to bars of gold, I doubt you will be dealing in $500k at a time. I have seen them and it is remarkable how much value you can store away for a decade in a safety deposit box. My guess is that 10oz of gold Eagles in varying weights would see you through the return of rule of law. IMO, sardines in oil from COSCO would have far more value than a bag of junk silver. Meaning the reason to own silver goes back to investment leaving a few gold coins for hard times.

As to oil, I bu the majors such as Chevron and MLP because they are a proxy for physical.
 

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The Sysop
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36,800 Posts
Woo Hoo! Im buying
 
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The Sysop
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Premium Member
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My assumption has always been that rule of law will return in a year or so following the worst of likely events. Historically, during crisis periods, barter for services or necessities dominated commerce as you can't eat or shelter under silver. For people on the move or in camps, high value easily carried/hidden and identifiable items were used for bribes, weapon procurement or tolls thus my thinking about portable gold. When things became more stable, proxy currencies for barter such as metals played a bigger role as a store of value. By the time this happens, the dollar or its replacement would be the coin of the land. Fiat currency is critical to modern government so it will come back and steeple will clamor for it. All that said, I don't have metals because I personally see more utility in "things" with intrinsic value.

As to bars of gold, I doubt you will be dealing in $500k at a time. I have seen them and it is remarkable how much value you can store away for a decade in a safety deposit box. My guess is that 10oz of gold Eagles in varying weights would see you through the return of rule of law. IMO, sardines in oil from COSCO would have far more value than a bag of junk silver. Meaning the reason to own silver goes back to investment leaving a few gold coins for hard times.

As to oil, I bu the majors such as Chevron and MLP because they are a proxy for physical.
I agree with this post. When SHTF, people will hand over all their "metals" for a food, shelter, ammo, or a gun. Metals have become a vehicle for trading, and will never be what it once was. Sure when the trade goes the other way, there will be profits to be made, but it's still just a trade. If your reasoning for holding the metal personally is a SHTF scenario, there are much better things to stockpile.
 

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Premium Member
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I read an article about a week ago in regards to gold. They said if gold goes below $1180, it's going to go down to $1100. I know...it's just an article. But I figured I'd put it out there for those thinking about gold.

I'm going for silver. JM Bullion.
 

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AMF YOYO
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3,602 Posts
I agree with this post. When SHTF, people will hand over all their "metals" for a food, shelter, ammo, or a gun. Metals have become a vehicle for trading, and will never be what it once was. Sure when the trade goes the other way, there will be profits to be made, but it's still just a trade. If your reasoning for holding the metal personally is a SHTF scenario, there are much better things to stockpile.
This is why I limit my precious metal investing to the truly valuable ones: Lead & Brass.

(And since the thread hasn't gone totally off track yet: Nobody ever invested in precious plastic, ya Glock-loving McFanboy.)
 
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