HOW TO BUY GOLD

 

Now that gold has entered the minds of main stream analysts, pundits and financial advisors - most of whom completely missed the move from $250 to $2000 over the last 20 years - people wonder - well, how do I buy Gold?

There is only one answer to that question though you won't get it from most advisors.  You buy Gold.  Real gold.  If you're American, pony up and buy Eagles.  There's a bit of a premium there but it only expands as Gold becomes increasingly popular.  Because Americans like Gold Eagles.

You can buy Krugerrands or Pandas or Maples too.  They premiums will be less than eagles but an ounce of gold will always be worth an ounce of gold.

If you buy tracking stocks like GLD what happens is that during the first scary downdraft where gold drops 50 or 70 dollars in a day, you sell your gold.  Then when it goes up 100 over the next week you buy it back at the high and it drops 50 and you sell it again.  That's human nature.

If you own Real Gold when the paper gold drops 50 dollars in a day the real gold doesn't drop nearly that much because the premiums expand (during a bull market).  Because holders of real gold don't sell during these absurd volatile moves that are most often a result of Bullion Banks like JP Morgan organzing raids on the futures price.

For those who doubt this really happens just look at the court cases.  JP Morgan has been convicted 3 times in the last few years of manipulating the price of bullion.  But they just pay tiny little fines so they keep doing it, as it makes them a fortune.

Then there are the gold stocks. These are another form of paper gold. Paper gold is Paper, not gold.  If you're into gambling in the risk markets they're fine.  But if you want to protect your porfolio with a Hard Asset, they are worthless.  They often track the price of gold, but in a market downdraft they often don't.

Then there are gold royalty companies.  Some will claim that when you own them you own proven veins of so many ounces of gold that gives you a leveraged gold play.  Except you don't.  You own an electronic chit that often moves with the price of gold but sometimes doesn't.  Even with proven veins of so many ounces of gold.  Because in the end you only own paper - or the electronic chit.  And when it goes against you - as it will at some point because gold is very volatile in the short run, you will sell your gold.

Stock is the illusion of ownership.  It is really just a gambling chip whose face value changes from day to day.  That's fine.  But it is not a hard asset.  You have to go to some effort to acquire and sell a hard asset.  Some see that as a disadvantage.  I see it as a huge advantage because it takes a lot of the impulse out of buying and selling.

So how do you buy real gold?  You go to an established bullion dealer with a good reputation and a long track record of honesty and you buy it.  Then you take it home and put it in a safety deposit box or a deposit vault or a safe or put it somewhere safe.   Forty ounces of bullion coins is really so small It fits in a tiny corner of your safety deposit box.  No big deal.

If you want a lot, use a vault.  There are many such services in every big city.  Or just bury it in your back yard noone will ever find it there.  And gold is inert so if you bury it it won't harm it in the least.

If you're aleady familiar with the gold market and have some knowledge of the different types of bullion you might consider the graded limited issue hsitorical bullion based market.  These include ounce or near ounce coins such as French 19th century 100 franc gold angels graded MS 62 or higher, or Peruvian 100 soles graded MS 63 or higher, or Autrian 100 coronas from the turn of the century graded ms 60 or higher or 100 Bolivares from venezuela from 1886-89.  Or the French gold 5 francs with the Sower image that were minted in tiny qunatities from 1970-1980.  In MS 67 or higher these have been going for over seeral times bullion regularly at auction.  Even some current issues in small mintages with restruck images like Una and Lion or the three Graces from the British Mint are selling at many times their bullion price.

In high grade there are many issues that have become so popular with collectors that they have established auction track records that make them quite liquid at often several times the bullion price.  

But that maket is for those who are already knowledgeable.

Start with Eagles.  And then study.  There's a whole world out there of bullion based investing that has become extremely popular In Japan and China as well as the United States and Europe.

Only Real Gold is as good as gold.