The Best Ways to Buy Gold and Silver Now
by Dr. Mark Skousen, Advisory Panelist
Thursday, March 19, 2009: Issue #959
Once again, the U.S. Mint can’t keep up with the huge demand for American eagle gold and silver coins. Americans are so anxious about the uncertainty of the seemingly never-ending financial crisis that they are demanding physical positions of their gold and silver, the only true money.
It’s not hard to see why. In many ways American eagles are ideal ways to buy gold and silver.
They are easily recognized, certified by the U.S. government, and easy to buy and sell through any coin dealer worldwide. And they normally sell for close to their bullion value. That is, until recently.
Prices for gold have skyrocketed as skittish investors “ran for the hills.”
But just because everyone else is paying too much for gold doesn’t mean you have to. Here are some smarter ways to add gold and silver to your portfolio – without overpaying.
Buying Gold “On the Cheap”
When Congress authorized the Gold Bullion Act of 1985, the U.S. Mint was mandated to produce American Eagles “in quantities sufficient to meet public demand.” But the act also insists that the metal come from mining operations in the United States.
The problem is that shortages have developed from U.S. suppliers.
Last August, the demand for these bullion coins was so great that the U.S. Mint temporarily suspended sales. The effects were dramatic and the market hasn’t been the same.
The premium paid for American Eagle gold coins skyrocketed to 8% over spot prices. Some dealers are charging almost $23 for one-ounce American eagle silver dollars, that’s $10 over the silver spot price of $13.
I love the American eagle coins. The gold eagles are beautiful and come in one ounce, ½ ounce, and ¼ ounce sizes. The silver eagles come in one-ounce only. They make excellent gifts and can serve as unique tips or awards to employees.
Jesse Livermore, the famed Wall Street speculator, once said, “You need to feel the money in your hands every once in a while. “I personally believe he had gold and silver coins in mind. They are addicting. Many of my subscribers carry a silver dollar in their pocket as a good luck piece and a reminder of our nation’s greatness – I do.
How to avoid the huge premiums on American eagles? There are several options.
The Best Ways to Buy Gold
If you want the best way to invest in gold, skip the American eagles, which are selling for 8% over spot gold right now, and buy the Mexican 50 Pesos Gold coin, which is selling at the cheapest premium among bullion coins, only 4.5%. It’s a big coin, with more than an ounce of gold.
I think it’s more beautiful than the American St. Gauden’s double eagle.
If you want silver, buy silver rounds, one-ounce medallions issued by private mints such as Sunshine Mining Company and other mining operations.
You can buy one-ounce silver rounds for less than $14.69 each, only $1.55 over silver spot ($12.94). If you want to buy the American silver eagles, Camino Coin in California offers the best deal around – $17.44 (prices may vary depending on when you buy). I’ve seen other dealers charging as much as $23 per coin.
Another popular choice is to buy is the pre-1965 U.S. silver dimes and quarters, so-called “junk” silver. You can buy them in full or half bags. Unlike bullion coins, the U.S. Mint isn’t minting any more silver dimes, quarters, halves or dollars. (Expect to pay more for bags of half dollars and silver dollars.)
I also like the Morgan and Liberty silver dollars in good, uncirculated condition ($28 or more, depending on quality), and the pre-1933 St. Gauden Double Eagle gold coins ($1,350 or more, depending on quality).
2 Additional Ways to Buy Precious Metals
If you don’t want to take possession, but still want a position in hard, precious metals in your portfolio, there are two additional ways to do it.
- Buy gold or silver certificates
The Perth Mint Certificate Program, issued by an arm of the Western Australian government, is the best, lowest-cost, private source. Buy warehouse certificates for gold, silver or platinum bullion or coins, for a small commission, and have them stored for you cheaply in Perth, Australia – a way to have assets outside the country without any reporting requirements. Minimum investment is $10,000.
- Exchange Traded Metals ETFs
Another way to buy gold or silver is through an exchange-traded fund (ETF). The SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV) are great ways to add silver and gold into your trading portfolio. Both are trading very close to the spot prices.
There are many ways you can add precious metals and coins to your portfolio. And as part of Investment U’s asset allocation strategy, we recommend 5% be held there. But a note of warning: As the financial incentives grow, so will the potential for crooks to enter the marketplace. I urge you to do your research and check out any business before you buy.
Good investing,
Mark
Today’s Investment U Crib Sheet
There are numerous places where you can buy gold or silver. But with the recent boom in prices, it seems like everyone and their grandmother are gold dealers. Beware of slick salesmen selling high-priced collectable coins and stick with legitimate dealers.
For years the members of The Oxford Club have relied upon a select group of firms to buy and sell gold from for that exact reason. Mark Skousen recommends…
Asset Strategies International, Inc.
1700 Rockville Pike #400
Rockville, MD 20852
T: 800.831.0007 or 301.881.8600
F: 301.881.1936
rcheckan@assetstrategies.com
Contact: Rich Checkan or Glen Kirsch
- Handles Perth Mint Certificate Programs
Camino Coin
P.O. Box 4292
Burlingame, CA 94011
T: 800.348.8001 or 650.348.8001
F: 650.401.5530
burtblu@hotmail.com
Contact: Burt Blumert
- Deals in American Eagles, Silver Eagles
David Hall Rare Coins
P.O. Box 6220
Newport Beach, CA 92658
T: 800.759.7575
F: 949.477.5874
Van@davidhall.com
Contact: Van Simmons, President
- Rare coins and “junk” silver
For precious metals take a look at EverBank’s Metals Select Account*, where you can invest in gold or silver, through EverBank, the fast-growing on-line bank. This is a non-FDIC insured account. Minimum investment is $5,000, and commissions are extremely low.
*Investment U is financially compensated for new accounts we bring to EverBank.”
- Gold’s Two-Faced Disappointment
- Market Vectors Gold Miners ETF (NYSE: GDX): Stock of the Day
- Seven Reasons A Boom in Silver is Beginning
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19 Responses to “The Best Ways to Buy Gold and Silver Now”
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March 19th, 2009 at 12:28 pm
How do I buy through the Perth Mint?
Reply
March 19th, 2009 at 1:15 pm
How do I buy through the Perth Mint?
Should say excellent post! Looking forward to seeing your next one!
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March 19th, 2009 at 2:41 pm
Mark,
Jason Hommel has talked about the Perth Mint in his emails. I agree with him it is not worth the risk. I closed out my certificates and like Hommel do not think they have the silver and gold to meet redemption demands later. Buyer beware!
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March 19th, 2009 at 7:17 pm
So Oxford Club Senior Analyst Louis Basenese is telling me I should short gold in February, and now you are telling me where I can buy gold? I’m a bit confused.
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March 19th, 2009 at 10:09 pm
Here’s another way. I bought 10 $50 gold eagles for about $900 each (bullion value at the time was par). They were sold in bulk at MS65s. I sent them to NGC and for $21 each they were graded and returned to me individually packaged and (as it turned out) graded as MS69 — all of them. Price at that time for MS69s was about $1300. An easy profit which has an uncalculable appreciation value on top of bullion. Try it. If you get the same luck, all the better.
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March 20th, 2009 at 1:21 am
Keith,
A list of Certificate dealers can be found at http://www.perthmint.com.au/investment_certificate_approved_dealers.aspx
As to the rumors about the Perth Mint not having the gold and silver, that is totally false. This blog post of mine about it (http://goldchat.blogspot.com/2008/12/mint-has-no-gold-again.html) shows that if you think about it, it isn’t reasonable. Read it and make up your own mind.
Regards,
Bron
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March 20th, 2009 at 1:38 am
thank you for the astute advice on buying gold & silver w/o me having to buy someone’s investment magazine or book. You gave me good, sound advice! Thank you!
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March 20th, 2009 at 3:31 am
last time(1st march), you said selling gold, the price of gold may be down to $700. But now you said buying gold!
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March 23rd, 2009 at 12:39 pm
There are a lot of questions about the gold and silver held for GLD and SLV, and one thought is that the metal has been leased out to sell on the open market to depress the precious metals prices. A better investment is the Central Fund of Canada (CEF) which holds audited, segregated metal to back up it’s shares. It has been around since 1962 and is still being run by the original family of founders, who also own shares for themselves. Check them out: http://www.centralfund.com
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April 24th, 2009 at 1:34 am
If you are looking forward to invest in gold, then the gold bar can be a best deal for you. For this you should know that the value of gold bar is indispensable.
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May 17th, 2009 at 4:46 am
Blog is informative and impressive same time.
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May 25th, 2009 at 4:49 am
The orchestrated destruction continues. They should get the retirement funding from Paulson — he’s got a couple trillion that he’s hiding somewhere! 1776, lock and load my friends! I’ll see you on the battlefield.
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June 12th, 2009 at 10:42 am
I believe the same thing as you. Did you see what happened yesterday? Obama announced he’s picking a federal reserve guy to be the head of the treasury – that’s a disaster. The market knew it and the price of gold jumped 7% – or in other words, the value of the dollar fell 7%.
There’s three ways to trade gold:
1. Buy it in a brokerage account. The symbol is GLD (its an etf that buys gold for you). The only problem is that there is no proof they actually hold the gold somewhere.
2. Buy it from a broker/dealer and keep it in your house. Hide it because Uncle Sam is going to try and steal it like he did in the 30’s.
3. Buy some at the Perth Mint in Australia. The gold mining industry is too large over there for their government to make gold illegal, so it will be safe there – especially if we need to pack our bags and leave the country.
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July 2nd, 2009 at 7:17 am
If you actually cannot use the money in a way that the battlefield requires you to do…then rather save the money to invest into something better..!!
Watch a free video on Gold IRA.
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August 1st, 2009 at 12:00 pm
I’m a “newbie” with less than $5000 to invest, but would like to get started. Best way/place?
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August 21st, 2009 at 6:15 am
An Exciting Investment Opportunity Top Sector Allocation for DSP Blackrock World Gold Fund
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September 5th, 2009 at 1:31 am
This is really good to know that how we can buy the Gold and Silver. The methods you shared with us are really beneficial as it is better to invest not to spend.
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September 8th, 2009 at 2:56 am
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Patricia
http://forextradin-g.net
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November 3rd, 2009 at 3:25 am
Thanks for the great reading, we are buying gold bullion bullion in a recession. I will pass this on to our ira clients to read
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