Skip to comments.Silver vs Gold Bullion - what is better for Average Joe?
Posted on 08/27/2012 8:36:40 PM PDT by GlockThe Vote
I have been accumulating silver Eagles , maples, Austrian phils, and pandas.
Can anyone give me a good idea or reason why Gold is better than silver for the average Joe investor in physical bullion?
From what I can gather Silver overall is a better avenue for most of us.
FYI - my family and friends think I am nuts for buying silver maples and eagles.
I got this friend who has accumulated some gold things.
He says that for a short term outage of civilization, like a two or three month long issue the gold bits would be handy to have.
If the bad times are series, like 3+ YEARS then the gold and other expensive things will be useless. The currency will be ammo and food. You can’t eat gold.
I have enough ammo and guns.
I have dry food, water storage and purification, probably not enough dry food though.
My thought was if you have say 5k for bullion purchase, what is best and why?
I'd recommend silver for the average joe because of it's low cost.
Silver has done VERY well since I started buying it in earnest in 1995.
Whatever you get, get it in a form that you can literally hold it in your hand.
Gold takes up less room. It depends on how much you’re investing and why. For small investors or for “barter” purposes, junk silver coins are said to be best as they are well recognized.
For investing against a crash or inflation with the intent to sell into the new currency, then it probably doesn’t matter too much.
Just my opinion...
I have found this website to be a very useful source of information on the economy, gold, and silver.
I buy eagles, maples , pandas, and phils from a site called provident metals. Lowest over spot I have found.
I checked out APMX but they are a little more.
Just wondering if it’s better to buy smaller gold coins vs the 1oz silvers.
thanks! Nothing like having the coinage in hand TBH.
The question is what kind of “value” you’re looking for.
Are you looking for an investment value or an insurance value in case society falls apart?
If you’re looking for an investment, a little over a year ago, the margin requirements for silver commodity traders were changed, and that has effected the price of silver ever since. Before the change, silver was at over $40/oz and reaching toward $50. It quickly dropped by about $10 after the change, and has been in the low $30s ever since. All that is to say, if you want to buy silver and flip it for a profit a few years later, that probably isn’t a great idea.
However, if you’re just looking for a hedge against society falling apart, then think of silver as a smaller denomination of the same currency as gold. And since it costs so much less, it makes it way easier to get into than gold.
Hope that helps.
1/10 oz are easy to carry and make change with...
If you have to bug out with nothing but a backpack, a mixture of silver and gold is best. Use the silver for barter along the way, and the gold for concealment and longer-term survival.
One ounce gold coins would be worse than useless. It would be the equivalent of having a wallet full of $1000 bills, you couldnt spend them anywhere, as no one could provide change for most purchases. It wouldnt be long before the local predators got wind of the fact that you have a bunch of $1000 bills.
1/10 ounce coins? Much better. Bullion coins whether gold or silver, still mark you as someone who planned ahead and therefor might have a stash of gold, sliver, food, ammo, medical supplies, etc. but small coins reluctantly spent are less of a flag.
Pre-1964 US silver coins better still. My granny left me a few of these, and I hate to spend them but...
Just my take. Your mileage may vary.
I can only tell you what I do, and the basis.
It is a broadly held position, and it is mine, that silver will increase more than gold as a percentage. Therefore, in general, silver is better.
However, there is a problem with silver. Typically, the percentage premium you must pay for silver coins is considerably higher than for gold coins. Typically: 40/1600 = 0.025 for gold and 4/31=~ 0.13 for silver. Therefore, you need a greater increase in silver than for gold to make a profit. Now, you can get around this by buying silver bullion bars, but then you must file the 1099 forms. Alternatively, you can buy silver from someone like BullionVault and get the full exposure without the large commission, but then you have “paper silver”.
My approach is diversification.
I own mostly gold coins (1 Oz Eagles) in my Gold IRA. I also own silver bullion bars in the IRA as well (it is reported by the bank anyway). For my personal holdings, I own gold Philharmonics. Then, I own silver through BullionVault.
Finally, one problem is that the silver takes up a lot more space. There is no way to fit a reasonable amount of silver in a safety deposit box.
Of course, you should further diversify in lead, land, food, and purification.
I am not that fond of the smaller denom gold coins. You’ll find that the coining charge “about” the same regardless of coin size. It’s less for 1/10 oz gold coins because a $60-70 charge on top of a ~~$166 bullion spot price would be ridiculous. I’d stay away from the 1/10 oz. IMO the half ounce Eagles in gold are the best choice and there’s nothing wrong with full eagles at all.
Example from CNI (golddealer.com) just one dealer among many
US Gold Eagle Bullion 1 oz. $1692.00 $1742.00
US Gold Buffalo Bullion 1 oz. $1692.00 $1752.00
US Gold Eagle Bullion 1/2 oz. $837.00 $ 872.00
US Gold Eagle Bullion 1/4 oz. $420.00 $ 450.00
US Gold Eagle Bullion 1/10 oz. $171.00 $ 186.00
Here, you can see that you are not being punished for buying an ounce of gold in two halves. But in four quarters, $60. “lost” and ten tenths, $120.
Merit Financial may be able to beat your Provident prices by a few nickels. Free shipping, first order.
I have loads of silver, a little gold, I sold 1/3rd my gold at $1760 [net to me] a while ago, not unhappy about it. It’s nearly back there.
Hard to say about silver. Unless it really goes ballistic, which some believe will happen (I do not) you have to own quite a bit of it to make much of a life-difference. And buying it now, at $33 for Eagles (say) for a run to $36 is probably a better bet in the stock market. I have been buying silver for a decade and probably own most of mine at $13-$15, so I can make some buying errors. I don’t know what to say about going all-in now, today. I’m bullish on the PMs, but not religious about them.
*bump* gold and silver
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