What size bullion?

[ajentjay]

Hi everyone My partner and I are new to pm's and I am hoping for a little guidance. I have been reading a lot but there are so many different POV's so was hoping to find out what you all do. We have just purchased 11kg of silver from our savings, have our house on the market and when it sells and we pay the home loan off anything left over will be put into pm's and we are in the process of rolling over all our super into a SMSF and yep you guessed it, we will be stacking pm's with all of that money too My question is what size bullion do you buy or do you buy coins or a mixture of all. At this stage we just purchased 1kg bars as it worked out the cheapest per oz but I would prefer smaller sizes for when the time comes to either sell or barter with it. We also purchased more silver as we think it is the better bang for your buck at this stage but I also can't wait to get my hands on some gold and platinum Our silver arrived yesterday from the Perth Mint and I have to say I'm pretty excited about it all!

 

[Sargeant Argent]

Don't go all in. Save some money for unexpected emergencies, buy smaller amounts on the dips. Since you have a lot of kilo bars already I'd say go for 10 oz bars and 1 oz. Coins.
Buy some gold, preferrably nothing over an ounce and have a good mix of old fractional and gov't issued fractional coins and mint issued bars. Smaller sized gold and silver well having more premium are much more liquid and if you need to sell you can sell a little bit at a time.
Slow and steady wins the race.

 

[thatguy]

1 kg coins and 1oz coins FTW

 

[Big A.D.]

What Sargeant Argent said.

Set up a high interest savings account with UBank or ING and keep some cash handy for emergencies. Smaller sized coins might have some numismatic (collector) potential for appreciation above their bullion value and are also easier to liquidate. Get some factional gold to split the risk as it is less volatile than silver and is affected by different market forces. Shop around and remember to add shipping and insurance charges so you can calculate your real cost of ownership.

Oh and, welcome!

 

[Peter]

I'd get nothing over 10oz in bars and fractional gold(less than a oz).
I keep away from numi and go for metal nearest to spot.
1oz silver (buffalos)

Gold ..sovereigns,$200,$100.
Near spot ,recognisable and tradable.

Balance percentage premium against amount of metal.
As the price of metal goes up generally you lose a percentage of the premium you paid.
There are plenty of coins out there 20 years old in perfect condition going for near spot.
Though I'm sure expert collectors can often make money.
As you can see ,I'm not a coin collecter.

Only a couple of years ago 1kg silver was the go.($650)
Now they are less sort after compared to 10 oz bars ($400).
People pay extra for tradability.
Maybe 5 oz is a good buy,even with percentage.
Cheap one oz coins or bars, would be best in silver.

In short,the smaller the better if low premium.
Metal is metal.
Anything else is tricky.

 

[goldpelican]

Welcome.

First - decide what your exit strategy is - are you planning to exit PMs in the future to get back into real estate etc? If you're buying a considerable quantity (eg 50kg or more) consider some bedrock pieces that are easier to store / handle. You will always be able to sell say 5 and 15kg bars - perhaps not privately, but larger dealers will take them, and in a worse case liquidity scenario you can get them converted into half and kilo bars at a relatively affordable rate.

Otherwise, stick to sizes that are a blend of liquidity and low premium - eg 10oz and 1kg bars, 1oz coins. I would not go buying thousands of ounces of 1oz coins unless you're buying low premium in bulk though.

 

[MelbBrad]

Personally, I think it's foolhardy (or terribly brave) to put all one's eggs into one basket.

But just imagine where you'd be if silver goes to $100...$250...?

 

[lamp]

Don't go all in. Save some money for unexpected emergencies, buy smaller amounts on the dips. Since you have a lot of kilo bars already I'd say go for 10 oz bars and 1 oz. Coins.
Buy some gold, preferrably nothing over an ounce and have a good mix of old fractional and gov't issued fractional coins and mint issued bars. Smaller sized gold and silver well having more premium are much more liquid and if you need to sell you can sell a little bit at a time.
Slow and steady wins the race.

Sargeant Argent ,

You've given the same advice when I asked the similar question ealier and I have been following since than and feeling good about buying only within my ability each time I agreed so much with your point about "Slow and steady", that way, I won't feel that I've missed the opportunity when the price goes down and I missed the chance or don't have enough fiat to buy. Afterall, the mindset of buying silver or gold is different from buying shares. Also agreed very much, making sure we also have enough cash flow for unexpected event. While we are thinking about the beautiful picture of the ultimate gold and silver price will lead us, it is as important to think about "what if" in a negative sense.

 

[ajentjay]

Thanks everyone. We still have some cash and I will feel more comfortable when I have smaller sizes to play with. I guess the pm that we have in our SMSF can be the larger size bars as 'technically' we aren't supposed to be touching that anyway So We can have a fair bit of silver in 1kg size bars for that purpose. The pm that we are using to secure our current wealth (or lack of) really would be better in smaller sizes as I feel that it is a possibility that it will need to be used as money in our adult lifetime or our childrens. Which leads me to ask about selling it. do bullion dealers such as the Perth Mint and Ainslie 'always' buy from you? Has there been a time in history where they have said "no we wont buy your gold/silver from you" That would be seriously worrying if that were the case. We are counting on being able to get in the car and go and cash it in if need be.

Melbrad - yes I had thought about laying all my eggs in one basket Do you mean all my eggs in the silver basket or all my eggs in the pm basket? We still have some eggs in the coop and the money that we have spent on 11kg of silver is only a fraction of what we will be spending in the future. We plan to buy gold and platinum too. If there is another commodity you feel is a great investment please let me know

 

[goldpelican]

Generally speaking, the Perth Mint will always buy. Should the day come when they won't, you probably want your PMs anyway

FWIW I would consider balancing that portfolio with some gold. I'm not an investment advisor, but I have no qualms right now going all in on metal and some cash savings (essentially we have). Pretty much convinced of the wealth cycles theory, and for me metal is the place to be right now.

No need to go "all in" on one transaction however.

 

[Sargeant Argent]

I wish I'd known more about pms before I started building my house, I wouldve shaved 150 square feet off trhe design and bought 20 oz of gold.

 

[Yippe-Ki-Ya]

Thanks everyone. We still have some cash and I will feel more comfortable when I have smaller sizes to play with. I guess the pm that we have in our SMSF can be the larger size bars as 'technically' we aren't supposed to be touching that anyway So We can have a fair bit of silver in 1kg size bars for that purpose. The pm that we are using to secure our current wealth (or lack of) really would be better in smaller sizes as I feel that it is a possibility that it will need to be used as money in our adult lifetime or our childrens. Which leads me to ask about selling it. do bullion dealers such as the Perth Mint and Ainslie 'always' buy from you? Has there been a time in history where they have said "no we wont buy your gold/silver from you" That would be seriously worrying if that were the case. We are counting on being able to get in the car and go and cash it in if need be.

Melbrad - yes I had thought about laying all my eggs in one basket Do you mean all my eggs in the silver basket or all my eggs in the pm basket? We still have some eggs in the coop and the money that we have spent on 11kg of silver is only a fraction of what we will be spending in the future. We plan to buy gold and platinum too. If there is another commodity you feel is a great investment please let me know

yes there has - in the USA - when gold was banned from being held by private citizens.
Australia - with its big, interfering government - runs the risk of having the same draconian laws being passed for the "greater good" ...
The only way to mitigate against that kind of government theft is to elect a libertarian government, which equates to a small government dedicated to only those important tasks in which government should be involved, eg defence, courts system and police.

unfortunately we live in a nanny state where the rights and freedoms of individuals are not that important ... so yeh i'd have to say political risk is pretty high

 

[ajentjay]

goldpelican, yep we will be getting some gold as soon as our house sells and our super rolls over into our SMSF

Sargeant, I hear you! Wish we'd sold our house before we moved in lol

Yippe I did hear that many years ago when I watched a doco called the money masters, along with something like America moved all that gold out of the country and now it doesn't actually have any? Not sure if this is all correct, I watched that doco years ago.

Hopefully we would have some warning or at least see some warning signs in time and sell enough pm to have the cash needed to get by.

 

[goldpelican]

Has there been a time in history where they have said "no we wont buy your gold/silver from you"

yes there has - in the USA - when gold was banned from being held by private citizens.

Actually that's exactly the opposite of what happened (you really need to read up on it Yippe instead of repeating myths) - basically the government made it mandatory to SELL your gold to the government. Forced nationalisation with compensation at $20.67 USD an ounce.

After which the price went up to $35.

The point is however, the government insisted on BUYING it from you, and it was NOT banned outright, just restrictions on ownership.

"All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins."

So you could keep five $20 Saint-Gaudens, your old British sovereign collection, and your wife's jewellery box contents.

Something that's overlooked ALL THE TIME with EO6102, is that your five ounces of gold (well let's be precise and make it 4.8385oz, the gold content of $100 of US gold coins), WENT UP IN VALUE when gold was repriced from $20.67 to $35 - your $100 in coins was now worth $169.35 - a 69% windfall.

I'm not defending EO6102 at all, but please, get the facts right.

 

[Forge]

Treat gold as your basis. I.E unless you are doing something with it (investing, speculating), keep your future in gold, and measure any other option against it.

Keep cash to cover costs.

Acknowledge silver as a speculation.

And proceed from there.

 

[renovator]

Has there been a time in history where they have said "no we wont buy your gold/silver from you"

yes there has - in the USA - when gold was banned from being held by private citizens.

Actually that's exactly the opposite of what happened (you really need to read up on it Yippe instead of repeating myths) - basically the government made it mandatory to SELL your gold to the government. Forced nationalisation with compensation at $20.67 USD an ounce.

After which the price went up to $35.

The point is however, the government insisted on BUYING it from you, and it was NOT banned outright, just restrictions on ownership.

"All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins."

So you could keep five $20 Saint-Gaudens, your old British sovereign collection, and your wife's jewellery box contents.

Something that's overlooked ALL THE TIME with EO6102, is that your five ounces of gold (well let's be precise and make it 4.8385oz, the gold content of $100 of US gold coins), WENT UP IN VALUE when gold was repriced from $20.67 to $35 - your $100 in coins was now worth $169.35 - a 69% windfall.

I'm not defending EO6102 at all, but please, get the facts right.

Good info .. i didnt know you could keep X amount i thought it was a blanket confiscation /buy

 

[Yippe-Ki-Ya]

Has there been a time in history where they have said "no we wont buy your gold/silver from you"

yes there has - in the USA - when gold was banned from being held by private citizens.

Actually that's exactly the opposite of what happened (you really need to read up on it Yippe instead of repeating myths) - basically the government made it mandatory to SELL your gold to the government. Forced nationalisation with compensation at $20.67 USD an ounce.

After which the price went up to $35.

The point is however, the government insisted on BUYING it from you, and it was NOT banned outright, just restrictions on ownership.

I'm not defending EO6102 at all, but please, get the facts right.

I hear you GP, but my point was that for all intents and purposes the government became the only practical purchaser for your gold. If you had a few larger bars you'd have been screwed if you wanted to sell it later on, thus anybody with a reasonable amount of wealth stored in gold would have been buggered.

If a similar ban were to come into effect in these times i believe the effect on individual investors would be far greater - given the condition of the world fiat monetary system. We'd be foobarred for sure.

 

[Yippe-Ki-Ya]

I'd get nothing over 10oz in bars and fractional gold(less than a oz).

That may not be the soundest advice for those who have more than a couple of thousand to invest...

smaller units have considerably higher premiums => less leverage of the spot price increase possible.

I believe that the 1kg bars (silver) represent the best balance between premium discount and portability/size.

If somebody cant come up with the cash for 1kg of silver or 1 ounce of gold then you're proabably not meeting the right buyers

 

[renovator]

I'd get nothing over 10oz in bars and fractional gold(less than a oz).

That may not be the soundest advice for those who have more than a couple of thousand to invest...

smaller units have considerably higher premiums => less leverage of the spot price increase possible.

I believe that the 1kg bars (silver) represent the best balance between premium discount and portability/size.

If somebody cant come up with the cash for 1kg of silver or 1 ounce of gold then you're proabably not meeting the right buyers

Arghhhh !!!! I agree with yippee. theres a first time for everything.

I hear all the same talk & totally disagree that 1kg bars are to large if it goes to $X . Look at the price of a gold kg bar & they still move & can be sold .Silver will never be that expensive. When i sell i will want to move it fast & buyers with $400 wont be my target market .
When i first started stacking i bought a bulk buy of 10oz from the states just so i could have a cool stack to look at but since then i have bought many 1kg 100oz & 5kg bars that im sure i will be able to ditch without a problem .Admittedly i will probably have to take the 5kg bars to a dealer & accept a lower price than spot but i will only sell when the loss of premium is far outweighed by the cost of the actual metal so no big deal .

 

[f40]

I'd get nothing over 10oz in bars and fractional gold(less than a oz).

That may not be the soundest advice for those who have more than a couple of thousand to invest...

smaller units have considerably higher premiums => less leverage of the spot price increase possible.

I believe that the 1kg bars (silver) represent the best balance between premium discount and portability/size.

If somebody cant come up with the cash for 1kg of silver or 1 ounce of gold then you're proabably not meeting the right buyers

+1

If you are looking to put a considerable amount of dollars into PMs, i would put the bulk into 1kg silver / 1oz gold. I would then maybe put 20-25% into smaller 10oz / 1oz bars / coins.