*Official* Precious Metals Discussion

[makav31i]

Hi all...Please use this thread to discuss precious metals related discussion and the other thread, http://forums.hardwarezone.com.sg/money-mind-210/collecting-gold-silver-coins-3747449.html for Coin Collecting matters...

 

[limster]

Those who buy gold as part of asset allocation don't really have much to talk about

(1) Set the target %. Mine is 3%, down from 5% because I don't like the fact that gold doesn't generate income that can lead to dividends. It just sits in my dry cabinet acting as insurance.

(2) Find the cheapest source. If buying 1oz physical at the time, BWSS (Beauty World) seems to be the cheapest. BWSS often buys 1oz in bulk to get volume discounts.

(3) Know when to use paper GLD. If gold declines sharply and you want to buy, local shops may not drop the price as much, their bid-offer spread increases, and sometimes they claim they are 'out of stock.' Its better to trade sharp declines using GLD. If you buy the equivalent of 1 oz of paper gold on IBKR, the commission is only a few cents.

 

[robinoy]

I exceed my gold target but I still buy when the POG is low like this week

 

[Bedokian]

IMO the PM allocation can be split into physical and paper, and probably along the lines of 30/70 or 40/60.

Physical itself, due to the premiums and discounts above and below the spread, may be difficult to liquidate without a loss, so this portion is best left as it is and possibly meant for "handing down".

Paper wise, ETFs with physical holdings (e.g. GLD, SLV) is preferred, and during rebalancing they would be the first to go.

 

[Asphodeli]

ah finally! this should make the threads more focused on the topics!

 

[frenchbriefs]

gold how to earn a return?i like to buy things that generate a passive income.

 

[FreedomAngelz]

gold how to earn a return?i like to buy things that generate a passive income.

Buy low sell high

 

[kennytayss]

Owning gold or silver itself does not earn you interest. It is the same if you are buying a house. Your house will not earn you interest or pay you dividends. However you can liquidate if you want, provided you can sell it.

There are countries like Indonesia or even Vietnam where rural people buy gold to prevent inflation or even to hedge against depreciation of their currencies.

 

[Bedokian]

Commodities, in general gold and silver act as dampeners in a portfolio (my viewpoint), where it acts like some sort of buffer during volatility.

 

[Seannie]

IMO the PM allocation can be split into physical and paper, and probably along the lines of 30/70 or 40/60.

Physical itself, due to the premiums and discounts above and below the spread, may be difficult to liquidate without a loss, so this portion is best left as it is and possibly meant for "handing down".

Paper wise, ETFs with physical holdings (e.g. GLD, SLV) is preferred, and during rebalancing they would be the first to go.

How about gold savings account? Thinking whether to open one since gold is heading towards usd800 soon

 

[FreedomAngelz]

Gold Price is heading downwards to US$1050 per oz while Silver might go below US$14 per oz

Tempting to buy Platinum is it hit below US$700 per oz.

 

[Mecisteus]

i may start to accumulate gold below 800. at the moment, i am eating popcorns and wait for gold to slide further.

 

[Bedokian]

How about gold savings account? Thinking whether to open one since gold is heading towards usd800 soon

If it is the UOB Gold and Silver Savings Account (http://www.uob.com.sg/personal/investments/goldsilver/overview.html), I would prefer ETFs and physical than this, due to the service charge imposed. Though GLD ETF has a higher expense ratio (0.40% vs UOB's 0.25%), this is deducted from the overall NAV, as compared to the UOB's, which is deducted from one's own account.

 

[Seannie]

If it is the UOB Gold and Silver Savings Account (http://www.uob.com.sg/personal/investments/goldsilver/overview.html), I would prefer ETFs and physical than this, due to the service charge imposed. Though GLD ETF has a higher expense ratio (0.40% vs UOB's 0.25%), this is deducted from the overall NAV, as compared to the UOB's, which is deducted from one's own account.

Oh i see... so its the service fee. Physical gold needs a place to store as well. Put at home? Buy those argor bars to keep you mean then sell back to the bank?

 

[Shiny Things]

Oh i see... so its the service fee. Physical gold needs a place to store as well. Put at home? Buy those argor bars to keep you mean then sell back to the bank?

The other problem is that the spread on physical gold's going to incinerate you. GLD trades like 30 cents an ounce wide, all day every day. The gold savings account is the equivalent of $5 USD an ounce wide; and one-ounce gold bars are eighty bucks an ounce wide. That means you're instantly in the hole by nearly 5%.

You wouldn't pay 4.5% brokerage to buy GLD, so why would you pay a 4.5% spread to buy physical gold?

 

[Bedokian]

I agree on the extreme spread for physical gold, which I call it "spread within the spread". It is not a good idea to have full physical for gold (and silver), which I had said earlier there should be a mix with paper for ease of rebalancing. I see 3 uses for the physical portion - as an "anchor" for the gold sub-asset class, as a keepsake and also as something to bequeath. Being Asian, keeping some physical is like in our blood.

 

[kennytayss]

For GLD trades, are we exposed to the counterparty risk?

 

[hwmook]

i may start to accumulate gold below 800. at the moment, i am eating popcorns and wait for gold to slide further.

Tough to reach, USD800 is my fair value for gold base on historical price data and inflation data but the cost of mining for it have gone up to USD1000 or so thus anything below USD1000 would cause supply cut. I believe USD900-1000 would be a good price to enter.

 

[Seannie]

The other problem is that the spread on physical gold's going to incinerate you. GLD trades like 30 cents an ounce wide, all day every day. The gold savings account is the equivalent of $5 USD an ounce wide; and one-ounce gold bars are eighty bucks an ounce wide. That means you're instantly in the hole by nearly 5%.

You wouldn't pay 4.5% brokerage to buy GLD, so why would you pay a 4.5% spread to buy physical gold?

Oh i see.. but im not looking at trading gold. Im looking to invest gold at good price and hold longterm for at least 5-10 yrs then sell. So the service fees for gold savings account is recurring every year right? But physical gold only one-time fee? I mean if i buy physical gold at USD800 and sell at USD2,000 I wouldnt mind that 5% spread. Am i right?

 

[Mecisteus]

there are 2 type of investors in precious metals.

1 is the believer of an apocalypse or followers of zerohedge. they prefer to buy the physical gold.

the other group is just buying for the exposure or diversity sake. they prefer to buy GLD for the simplicity.