Guide to buying silver in Australia (resurrected)
- Thread starter goldpelican
- Start date
Golden ChipMunk
Well-Known Member
iLeac said:
Fill in your location first
Krakked789
Well-Known Member
Hi everyone,
I'm new to this whole stacking business and some of it doesn't really make sense to me.
- I've been buying mainly silver bullion bars as they are closest to spot price and my dealer offers free storage and guaranteed buyback. This type of stacking seems the most logical reason to stack in terms of preparing for an upswing and offloading the bullion. Do I get hit with capital gains tax if I sell back to the dealer? Is that part of the reason for selling privately? Buyback is 5% below spot, so still seems like you have to make massive gains to make a profit.
- I've also bought a whole stack of American eagles, maples and Melbourne mint coins. I can't really see how this is profitable, though - the premiums are so high and the buyback is 5% below spot price. Are these coins only profitable when selling privately? Or is the whole point about not seeing this in terms of the dollar value of the investment?
- I'm only vaguely interested in stacking from a numismatic perspective. Some coins look cool, but isn't making a profit from these a waiting/ luck game? Why would anyone buy a lunar monkey when it's so high above spot price? Or even a kookaburra? Are profits only made when selling privately or to a coin dealer?
Thanks for any clarification...sorry if the questions seem a bit stupid.
I'm new to this whole stacking business and some of it doesn't really make sense to me.
- I've been buying mainly silver bullion bars as they are closest to spot price and my dealer offers free storage and guaranteed buyback. This type of stacking seems the most logical reason to stack in terms of preparing for an upswing and offloading the bullion. Do I get hit with capital gains tax if I sell back to the dealer? Is that part of the reason for selling privately? Buyback is 5% below spot, so still seems like you have to make massive gains to make a profit.
- I've also bought a whole stack of American eagles, maples and Melbourne mint coins. I can't really see how this is profitable, though - the premiums are so high and the buyback is 5% below spot price. Are these coins only profitable when selling privately? Or is the whole point about not seeing this in terms of the dollar value of the investment?
- I'm only vaguely interested in stacking from a numismatic perspective. Some coins look cool, but isn't making a profit from these a waiting/ luck game? Why would anyone buy a lunar monkey when it's so high above spot price? Or even a kookaburra? Are profits only made when selling privately or to a coin dealer?
Thanks for any clarification...sorry if the questions seem a bit stupid.
Golden ChipMunk
Well-Known Member
Krakked789 said:
Hi n welcome
Please fill in your location..
Many people Buying for many reasons.
If you are buying for a quick flip forget about it.
1. People hedge against currencies, in case economic collapse
2. Some for quick flip
3. A numismatic coins because they like them
4. Some sort of saving ( There are no interest )
5. Many other reasons
6. They think can double their $$$ soon.
Krakked789
Well-Known Member
Thanks for helping. I understand all these points, though - doesn't really answer my questions.
Cheers.
Cheers.
Golden ChipMunk said:
Straw Hat Pirate
New Member
Krakked789 said:
I'm going to quote this again. If I go and purchase coins from Perth Mint where am I supposed to sell it to avoid getting hit from all sides. I'm not a reputed e-bay dealer which seems to be the best bet so how do people off load their silver when the time is right?
Straw Hat Pirate
New Member
GoldenEye said:
Thanks for taking the time to reply, I was wondering how to avoid the premiums.
If I go to a dealer I have to buy above spot and sell below spot right? I assume this can be cut down when dealing directly with people from SilverStackers but what happens if this forum closes down or something.
Are there any other ways to avoid dealers?
Cheers!
Straw Hat Pirate
New Member
^ That actually looks great but where are you getting that from?
The Perth Mint website has this up and as you see the spread is far too steep
http://www.perthmint.com.au/metalprices.aspx
The Perth Mint website has this up and as you see the spread is far too steep
http://www.perthmint.com.au/metalprices.aspx
^ unallocated buying/selling vs physical buying/selling
SilverDJ
Well-Known Member
Straw Hat Pirate said:
From the actual live Depository Buy/Sell prices once you log in, I just screen captured it.
Those are the actual buy sell prices, but there are fees, 1% for under $10k for each transaction:
https://www.perthmint.com/storage/pricing.html
Plus a manufacturing fee for allocated physical gold or pool allocated silver.
The point is that if you plan to sell often and quickly then keeping physical metal yourself and trying to sell it is a complete PITA, much better to use a program like this. Then you can sell instantly with zero hassle.
Straw Hat Pirate
New Member
SilverDJ said:
Hey man, thanks for taking the time to reply and I'm new to all this so please bear with me.
From what I understand, you are saying if we buy and store the metal with the dealer then the premium we pay is much lesser but all we get is a paper certificate saying we own the stuff? That sounds good but I've come across a number of theories postulating that a lot of the metals are over-leveraged and if shit hits the fan the paper could become worthless and there's nothing like owning the physical.
Is that a choice we just have to make or am I missing something between?
Cheers!
SilverDJ
Well-Known Member
Straw Hat Pirate said:
Correct.
Basically, by way of your buy order.
There is some truth to that, but only for "unallocated" metal, and only if the dealer is running a crap un-audited system where you would be a bit foolish to use it in the first place.
If you buy "allocated" metal then you own that metal, it legally has your name on it's ownership, and it does not appear on the books of the company. So if the company goes bust, the receivers can't touch it because you legally own it and they just store it for you. Just as if you used a Safe Deposit box company and put your metal in there yourself.
Also, a proper and well run "pool allocated" system does the same as allocated, but you pay a lower (or no) manufacturing cost (the cost to make the bar for you). There is also usually no storage cost on poll allocated or unallocated, and this is a big advantage.
Perth Mint explain it very well:
https://www.perthmint.com/storage/help/faq-storage-options.html
Also, the beauty of the Perth Mint program is that it is government backed. Others that regular dealers run and all privately owned systems, so there is more trust involved in them and their auditors.
Straw Hat Pirate
New Member
SilverDJ said:
Thanks a ton for taking the time to write that. Just a couple of follow up questions :
1) Is there a particular reason as to why the spread is lesser when we store it with them? Surely, it should be higher considering they have storage costs and if we store it ourselves they can just pass on the delivery charge to us.
2) Is the live ticker for the prices you displayed accessible only to people who are using that program? Because, I've searched and I can't find it publicly displayed on that site.
Cheers!
SilverKnight.au
Member
Straw Hat Pirate said:
Allocated silver (and gold) are particular pieces you have brought and are storing, for example a 5oz Scottsdale bar, which has the usual premium attached as it is a minted piece, from a specific mint. You own 100% of that piece.
Un-allocated is where many people share a 'stack' of silver. Perhaps there is a 1000oz bar stored, and 100 customers have a part of it, say 10oz each.
A generic bar has less premium because it is larger and cheaper to make thus lower premium, essentially a lump of silver. The bar is there as the physical representation of your holdings, but you don't own 100% of any particular piece. The reason people do this is they can buy Xoz at a low premium, wait for the price to go up, say $10 oz and then contact the merchant and exchange some or all their unallocated for specific allocated pieces.
Let's say you bought 100 oz of Silver at $20/oz, that's $2000, it goes up to $30 oz, you now have $3000 to buy allocated silver (or gold), or to cash in, where the dealer will give you $3000 of silver, or gold. Well not quite $3000 as there are small fees to change to allocated, but the point is that you get more than you initially paid for if you are prepared to wait till it give you a better outcome.
Unallocated silver can be anything from damaged silver that can't really be sold even as low premium to huge 1000oz bars, typically it will be larger bars. Thinking about it damaged silver will likely be sent to a refinery and melted into larger oz denomination bars that the dealer will use specifically for their unallocated services.
Storage costs are minimal, unallocated is effectively a stack of bars 'thrown' into the corner of the room, and it does not take up that much space.
Unallocated probably would look like this. This stack might be 100s of clients worth of unallocated silver.
[img=Unallocated stack]https://dl.dropboxusercontent.com/u/97945497/silver-bars1.gif[/img]
Clear as mud? Good.
