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written by reader Best Way to own gold

By xiexgp@gmail.com, July 20, 2015

I want to buy some gold ,but I don’t know the best way to go about it. I would appreciate any or all suggestions on the subject. I know I dont want to own the actual gold. I live in Tacoma,Wa which is rife with criminals wanting to steal it.

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Travis Johnson, Stock Gumshoe
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If you want gold for an “end of the world” kind of scenario, where you think there will be no more dollars and zombie hordes will be roaming the fields looking for brains to eat and gold will be the only remaining currency, then it would have to be physical gold that you have nearby — that’s what the “end of the world” folks pitch, because they believe “electronic gold” that’s in storage somewhere and traded as a derivative (like futures contracts) will be wiped out in armageddon — or seized by the government, perhaps, since the rallying cry of many gold enthusiasts was the seizure of gold by President Roosevelt 85 years ago. (There’s no reason for that to happen again, but never say never — that was done to create inflation and try to add liquidity to the system, and had to be done because of the gold standard … we don’t have a gold standard anymore, and liquidity is abundant and forced down our necks by the Fed as they try to create inflation).

If you don’t care about owning physical gold coins or bars in a safe deposit box or something like that, you can take the next step and buy allocated storage — an account where you have a specific amount of gold, specific coins or bars in a vault in NY, London, Zurich or Hong Kong (or a couple other places) that are yours. You pay more for this, usually, since you’re paying for traceability and storage. Beyond that, you can buy electronic gold that’s not specifically allocated by bar to you through some gold trading and storage services, or you can buy one of the exchange traded funds that holds gold (and sometimes a bit of gold futures contracts to manage liquidity), like GLD, which is the biggest one.

I don’t personally worry very much about allocated vs. unallocated or held vs. stored or paper vs. physical — I hold some physical gold and silver, which I consider a form of savings, and for that I like APMEX as a dealer (but there are many others who are fine as well, I’m sure), and I would also have no qualms about holding GLD if I just wanted to have an easy, liquid investment that tracks the price of gold extremely closely.

Hopefully if other folks have favorite gold investment vehicles, they’ll chime in. Thanks!

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D Brown
D Brown
7 years ago

Don’t forget to read up on the U.S. tax implications of precious metals ownership. When/if they are sold, gains on bullion, coins, and the ETF’s are taxed as collectibles at a 28% rate. Therefore many recommend that they be held in an IRA, not a taxable account. Precious metals ETF’s may qualify as Passive Foreign Investment Corporations (PFIC’s), on which gains are not taxed at the higher rate for collectibles, but that then generates some additional tax return complexity. Strongly advise due diligence on the tax issues, as well as reading the prospectuses on the ETF’s and looking at their relative expenses, before deciding. (Of course, in a zombie apocalypse, the IRS may be the least of one’s worries.)

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D Brown
D Brown
7 years ago
Reply to  D Brown

Slight correction to above: “28% rate” should read “maximum 28% rate.”

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D Brown
D Brown
7 years ago
Reply to  D Brown

Minor correction to above: “28% rate” should read “maximum 28% rate.”

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jack
jack
7 years ago

If you can’t protect your held precious metals, get a safe deposit box. Go to a local coin shop that sells collectible coins because they also sell bullion. Buy some NEW gold and silver coins. Form a relationship with your shop. Gold is currency that has a fluctuating value that is easily quoted. Bullion in this form has various “minting premiums” depending who made the coin. e.g. US Mint vs. Canadian vs. Chinese etc. The not legal tender mints like Apmex, Sunshine, etc also make “bullion” coins with less “premium” over the quoted “raw metal” price per ounce. Not advocating anything illegal, but given certain quantity minimums and maximums, you should be able to buy and sell your precious metals for cash avoiding all government taxing and tracking. Perfectly legal.

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Hector
6 years ago

Mike, we do have tradeplans ptosed on the SST Owner’s Club website. The best thing to do is to trade the pairs with the best movement, range and lowest spread costs. It’s pretty easy to see if you look at some daily charts and then intraday charts. But when you make low spread costs a necessary criteria, the list gets pretty small. EURUSD, GBPUSD, EURJPY.. Maybe a few others but those are the three best over a long period of time. In fact, if you’re day trading, why not keep it simple and focus on just the EURUSD? The SST FX just nailed down +1000 pips during the US session this past month but the Euro Session had some nice movement too.

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