gold and silver as investments

[jstarfireb]

My husband is thinking of buying gold or silver coins as an investment. He reasons that the value of the dollar is volatile, whereas the value of precious metals may continue to increase over time. What do you guys think about this? Worth it? Too much of a gamble?

Do you think gold will continue to increase, or is it bound to stabilize or decrease?

Where in the US can you buy gold coins?

What about silver as opposed to gold?

Thanks in advance for your help!

 

[Dancing Fire]

GLD (ETF on the NYSE) suppose to track very close to 1/10 oz of gold. if you want to hold physical gold...1 oz Maple leaf would be the way to go.

silver could be a better buy,but silver takes more storage space. when spot price of gold hit $850 an oz in Jan 1980...silver spot price was @ $54 per oz.

 

[jewelerman]

Date: 1/29/2010 7:08:56 PM
Author:jstarfireb
My husband is thinking of buying gold or silver coins as an investment. He reasons that the value of the dollar is volatile, whereas the value of precious metals may continue to increase over time. What do you guys think about this? Worth it? Too much of a gamble?


Do you think gold will continue to increase, or is it bound to stabilize or decrease?


Where in the US can you buy gold coins?


What about silver as opposed to gold?

Thanks in advance for your help!

gold and silver has traditionally been a good hedge against inflation, and in bad economic times and times of war for some countries, its the only thing left to barter with after monetary collapse.the record gold price has been a recent 1224.00/troy ounce and silver at 50.00/troy ounce back in 1980.It sits at about 1050 and 18.00 per ounce on today''s market.An investment council-er will tell you not to wrap your savings in one area,but its a good idea to have about 5-10 percent of your investment portfolio in precious metal.You can buy gold and silver bullion and coins at some banks,coin shops and metal exchanges.Do extensive home work before investing your money and get to understand the risk factors of holding a tangible asset.Never buy a certificate that represents the metal you are paying for...have the actual metal in hand.Start your investing in simple one ounce silver coins or bullion to start out with.Go slow and learn BEFORE you invest!

 

[y2kitty]

What worries me about gold is that there are so many people buying it right now. There are commercials on tv encouraging people to sell their gold. It reminds me of the hysteria around house buying several years ago. Disclaimer: I''m an IT person, not financial.

 

[Kunzite]

I don''t know how accurate this article is, but I was just reading the other day about how gold could be the next bubble.

http://money.cnn.com/2010/01/25/news/economy/assets_bubbles.fortune/index.htm

 

[perry]

This is the wrong time to use metals as an investment. As a "breakdown of society" hedge fund... Maybee (but salt, pepper, and bullets are a lot cheaper - and will be just as valuable - if not more valuable).

Currently the US dollar is probably at about an all time low - and the price of gold and other metals are thus high.

The value of the dollar will bounce back. When it does your metal investments will drop in value substantially.

For some reason a lot of people tend to buy high and sell low based on general panic psychology. Since gold (and metals) are now seemingly high - they must be a "good" investment. When gold (and metals) are low they are a "bad" investment.

The fact is that if you are going to invest you need to do the opposite. Buy low and sell high. In fact all you are doing is accomondating larger mass of people. You are there to buy when they want to sell - and you are there to sell when the want to buy. Few people have the mental toughness to do this.

I would like to also point out that you should not invest any money that you cannot afford to loose. There is a reason they call in an "investment" and not "guaranteed income."

Perry

 

[jewelerman]

Date: 1/30/2010 2:18:17 AM
Author: perry
This is the wrong time to use metals as an investment. As a ''breakdown of society'' hedge fund... Maybee (but salt, pepper, and bullets are a lot cheaper - and will be just as valuable - if not more valuable).

Currently the US dollar is probably at about an all time low - and the price of gold and other metals are thus high.

The value of the dollar will bounce back. When it does your metal investments will drop in value substantially.

For some reason a lot of people tend to buy high and sell low based on general panic psychology. Since gold (and metals) are now seemingly high - they must be a ''good'' investment. When gold (and metals) are low they are a ''bad'' investment.

The fact is that if you are going to invest you need to do the opposite. Buy low and sell high. In fact all you are doing is accomondating larger mass of people. You are there to buy when they want to sell - and you are there to sell when the want to buy. Few people have the mental toughness to do this.

I would like to also point out that you should not invest any money that you cannot afford to loose. There is a reason they call in an ''investment'' and not ''guaranteed income.''

Perry

I have to agree that its not the best time to invest in gold as an investment because the price will fall when the dollar becomes stronger...in the 1980 buying panic ,the perople that bought gold at $850 and silver at$50 lost because within monthes the price tumbled to$400.00 for gold an $6 for silver.It went to as low as $300.00 and $3.00 before it began to climb again.The best time to have bought gold was about 2 years ago when it was at about $400-500....but even then investers never ever thought that it would hit the record numbers that it has in the last few years.Silver never has seen the record prices again but at 16-20 an ounce it is still an affordable tangable for you to concider.The silver i bought at 3-5 on ounce will or has been sold because of the current market value.

 

[Dancing Fire]

Date: 1/30/2010 2:18:17 AM
Author: perry

Currently the US dollar is probably at about an all time low - and the price of gold and other metals are thus high.

The value of the dollar will bounce back. When it does your metal investments will drop in value substantially.

Perry

yep, sooner or later the Fed will raise interest rate to protect the dollar.

 

[NewEnglandLady]

Date: 1/30/2010 2:45:41 PM
Author: Dancing Fire

Date: 1/30/2010 2:18:17 AM
Author: perry

Currently the US dollar is probably at about an all time low - and the price of gold and other metals are thus high.

The value of the dollar will bounce back. When it does your metal investments will drop in value substantially.

Perry

yep, sooner or later the Fed will raise interest rate to protect the dollar.

Agreed, though even if the Fed hiked up interest rates tomorrow, I don''t know how the economy could possibly avoid inflation.

JStar, I agree with Perry. While I would be over the moon if the U.S. went back to the gold standard for currency, I wouldn''t buy it right now as an ivestment. If the dollar did completely collapse and society was forced into a barter system, you''d want to invest in lots of bottled water, canned food, guns and bullets instead of gold. If you''re looking for a long-term investment, though, gold does not have the best track record and the fact that everybody has jumped on the "buy gold" ship means that gold prices are already inflated.

 

[jstarfireb]

Thanks guys, and sorry for my delayed response! My husband thanks you for the advice. His big question was whether to buy now or buy later, since he thought gold prices were just going to keep skyrocketing based on current trends. Sounds like it''s better to wait until the dollar improves.

 

[Dancing Fire]

Date: 2/4/2010 10:32:13 PM
Author: jstarfireb
Thanks guys, and sorry for my delayed response! My husband thanks you for the advice. His big question was whether to buy now or buy later, since he thought gold prices were just going to keep skyrocketing based on current trends. Sounds like it's better to wait until the dollar improves.

Gold tumbled $45 today due to the strong dollar.

 

[winternight]

You really need to look at the long term results of gold as an investment, if I remember correctly it pretty much tracks inflation, which means you''re not really making money. Also, it is very volitle so you have to have the stomach for the big ups and downs. Finally, taxes! Investments in metals are taxed at ordinary income rates --- not capital gains --- so if you''re in a higher tax bracket that eats into your returns. One way to deal w/that is to have a gold or silver ETF in a retirment account, like a Roth IRA or IRA, rather than to hold the coins or metals directly.

I have a friend whose husband bought her silver shares in the silver ETF as a birthday present last year, but he bought them in a regular account so they''ll be paying quite a bit in taxes when/if she sells.

 

[Harriet]

Taxation of gold and silver (or the relevant ETFs) depends on how long you hold the asset. If the holding period is less than a year, the gain is characterised as a short-term capital gain and is taxed at a maximum of 35%. If the holding period is more than a year, the gain is characterised as "gain from collectibles" (as opposed to long-term capital gains) and is taxed at a maximum of 28%.

 

[winternight]

^^
Thanks for the correction on the tax info.

 

[Harriet]

No, thank you for prompting me to look into that section of the Code.