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Metals, a Hedge or Investment Depending on Your Views... or a Sucker's Bet?

As you can tell this topic still fascinates me.

Checking the bigger online dealers I'm finding that some have stopped advertising 90% junk silver coins. Others still sell it, but in fewer package deals and at silver spot price or very close (aside from rare coins, near-uncirculated condition coins, and silver dollars).

Small local dealers are posting "Stop the Melt!" signs and selling t-shirts and such.

I suppose so many people needed money and saw silver spot rising and they dumped a ton of 90% onto dealers. Since it wasn't selling back out to others very well they've had to drop premiums. If they have to sell below spot it isn't worth the retail overhead, so off to the refiners a lot of it goes!

I'm sure the most worn-out slick coins go first, but sorting coins is too labor-intensive so a lot probably gets tossed into refiner buckets as is.

It's sad to hear so much history may be just melting away. I like the old Franklin and Kennedy halves and the Mercury dimes bring back memories.

I'd also like a Peace Dollar in decent shape:
The Peace Dollar was minted from 1921 to 1928, 1934, 1935, and as a commemorative coin in 2021. The coin’s design was selected as the winner of a competition to best portray a representation of peace. This design idea was to mark the years of peace that followed World War I. Although Congress never passed a bill to require a redesign, the Treasury Secretary, Andrew Mellon, approved the new design.

Anthony de Francisci created the new design that showed the Goddess of Liberty on the obverse, and a bald eagle grasping an olive branch with the word “Peace” underneath it.
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The info above is a little dated, it seems a few more years saw commemorative mintings as well.
PD Face.jpgPD Back.jpg
Of course that's a shiny commemorative issue. I'd want something from back in the original years of minting I think.
 
Jacob Petersheim said:
People are scary.

I watched some videos from "backwoods" small dealers in preserved produce, seeds, whatnots, and gold and silver. One I saw today said that some customers have told them "I don't need gold or silver. I invest in lead and copper so I can take what I need."

Ouch.
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That is not uncommon. They are called marauders in the prepper communities and are looked own upon and sometimes feared. I understood there were some Skinhead groups in Idaho who were selling maps to Mormon households there, as prepping is part of the Mormon religious belief. Every Mormon household is supposed to have two years worth of food and other essentials on hand I think. I don't know for sure. Perhaps if there are any LDS folks here, they might fill us in.

In Alaska virtually ever household has weapons, so it might not be a good strategy here. Of course, a group of "Marauders" could overwhelm everybody, even the police.
 
Don Alaska said:
Of course, a group of "Marauders" could overwhelm everybody, even the police.
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Yeah, I've consumed enough apocalyptic fiction, some written very seriously, to consider the threat marauding gangs. It could probably even be worse when urban gangs rove out into the countryside. Being out of their element they might just kill as they go, like locusts.
 
Jacob Petersheim said:
Yeah, I've consumed enough apocalyptic fiction, some written very seriously, to consider the threat marauding gangs. It could probably even be worse when urban gangs rove out into the countryside. Being out of their element they might just kill as they go, like locusts.
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Maybe, but the urban gangs might meet more opposition than they realize when they run into the rural folks who are used to hitting targets from 100+ yards away instead of just a meter or so, not to mention shotguns....
 
Something is going on. Even with the US and Canadian markets closed for the holiday silver and gold are breaking out to the upside. Silver passed $40/ounce.

The related mining stocks are booming even more.

It would appear that Europeans are buying like crazy today. Mainly the well-connected big institutions, of course.

Of course there is a lot of news to consider. Courts pushing back on tariffs, Fed rate cuts anticipated soon. Trump trying to remove a hostile, sleazy Fed governor. Chinese woes, European woes, Canadian woes, and on and on. There is also the move to add silver to the US list of strategic minerals once more.
 
Short (9 minute) video on an interesting aspect of retail buying and selling that I hadn't thought about: retail price spread.

I had been aware of "premiums" (markup over spot price of the metal) retailers charge. But I hadn't really considered the buyback prices based on the item you want to sell. Type of coin or round, year of minting, condition, whether certified and graded or not, and of course supply and demand.

You don't just get back a discounted spot price as if the retail dealer is sending everything off to the refiner's melt pot.


For the US gold and silver holder, in many ways the American Eagle 1 ounce seems to be one of your best bets. It carries high premiums, but the buyback is typically good as well, even over spot under most conditions... though not right now. 😜

It seems that an awful lot of little guys are either far to extended financially to even be stacking precious metals and now they need the cash, or they're semi-speculative players and with prices high they want to take a profit and pay their Capital Gains tax and walk away. The latter might also think prices will fall a lot before long so they can buy back in later on at lower rates.

Either way, right now dealers seem to be swimming in stock. Too many sellers and too few buyers. This makes them hold premiums low, but it also means a lot of metal is headed off to the refiners. That's really sad for the historic coins, including the "common" 90% silver coinage from the 20th Century.
 
I'm not sure why, but I find this hilarious. There seem to be a few government mints issuing tiny 1/20 ounce gold coins though:

A 1/20 ounce Gold Maple Leaf coin has a diameter of approximately 14.1 mm and a thickness of 0.92 mm. These dimensions may vary slightly depending on the specific issue year and mint, though the official specifications from the Royal Canadian Mint are generally very consistent, according to APMEX and other bullion dealers.
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Not paper-thin, but since it is 0.9999 gold it can probably be trivially folded in half.

Twntieth Maple.jpg
 
Not sure I'd buy one. Checking, it looks like dealers charge a premium as high as 80% on those 1/20 ounce gold coins!
 
Nation states are moving from U.S. Treasuries to gold as a reserve. It could be bad news for the U.S. Dollar and the ability of the U.S. to finance their debt.
 
A lot of people were into those US State Quarters, and collected them all.

The US Mint has another program right now that few seem aware of: State Innovation Dollar coins:
Front.jpgBack.jpg
Composition: 6% zinc, 3.5% manganese, 2% nickel, balance copper
Diameter: 1.043 inches (26.49 mm)
Edge: Lettered
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I'm not sure when/if these enter general circulation as Dollar currency. Right now you have to buy them from the Mint at a premium. A 25-coin roll is priced at $36.25 right now. A 100-coin bag goes for $123.50 today.

Of course they are legal tender as $1 in value already... if you could get a store to take one. :unsure:

Several States have already been issued, more will follow. You can also buy groups of them in "proof sets" if you're collecting or buying gifts.
 
Something else that I hadn't considered (though, duh, it's obvious now) is the need to keep an inventory and supporting documentation such as receipts if you were to buy into this stuff.

There are tax issues when you sell. Insurance issues. And issues in case of theft. But a buyer might also ask for proof of ownership when you decide to sell.

It isn't clear to me how the taxes work. It sounds like you pay capital gains taxes on sale when you make a profit. The rates appear to be different for stuff held a year or more vs. any less time.

But how are profits calculated? Seems simple: sell price minus buy price. Maybe that's all that goes into it, though if your State charges sales tax on precious metal bullion is that part of your "buy price" or not?


I watched a coin shop guy's video today. Some woman brought in $15K in silver. Turned out she was getting a divorce and had grabbed the husband's silver. Pretty soon there were cops, a P.I., and a judge involved. Then a tussle over releasing the silver back to the owner, who had to provide some sort of documentation proving ownership.

The entire world seems like a soap opera some days.
 
I think the old Western stories often referred to "twenty dollar gold pieces." I think that was the old Double Eagle coin.

Perhaps that goes back to a $20/ounce gold price way back in the 1800s. So it would make some sense for those 1/20 ounce coins to be denominated at 1 Dollar?
 
Whew! Even gifting precious metals can get complicated:

The recipient of a gift does not pay income tax on the gift itself. However, documentation is crucial if the recipient later decides to sell the gold.​
  • Determining cost basis: The recipient's "cost basis" is typically the original purchase price the donor paid for the gold. This cost basis is used to calculate capital gains or losses when the recipient sells the gold. Without documentation, it can be difficult for the recipient to prove their cost basis and they may face a higher tax bill.
  • Proving ownership: A signed letter or gift affidavit from the donor can help establish a clear ownership trail. This is especially useful if there are future questions or disputes about the origin of the asset.
What to include in your documentation
​
To create a sufficient record, you can prepare a simple, signed gift letter or affidavit that includes the following information:​
  • Donor's information: Name, address, and relationship to the recipient.
  • Recipient's information: Name and address.
  • Description of the gift: A detailed description of the gold, such as the type (jewelry, coins, bullion), purity (karat or fineness), and weight.
  • Value of the gift: The fair market value of the gold on the date the gift was made. Include the source of the valuation, such as an appraisal, receipt, or current market spot price.
  • Declaration of gift: A statement clarifying that the gold is a gift and that no payment is expected in return.
  • Date of the gift: The date the transfer of ownership took place.
  • Supporting documents: Attach copies of the purchase receipt, certificate of authenticity, or appraisal.
Recommendations​
  • For smaller gifts: If the gold is below the annual exclusion amount, a simple, written record can be kept with your tax files for your own records and for the recipient's future use.
  • For larger gifts: If the gold's value exceeds the annual exclusion, you must file Form 709 with the IRS. Consider preparing a formal gift affidavit and, for high-value items, consulting a tax professional.
 
Jacob Petersheim said:
I think the old Western stories often referred to "twenty dollar gold pieces." I think that was the old Double Eagle coin.

Perhaps that goes back to a $20/ounce gold price way back in the 1800s. So it would make some sense for those 1/20 ounce coins to be denominated at 1 Dollar?
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I think the real "Basic" American unit of currency was not the Dollar, but was the Eagle and the Dollar was defined as 1/10 of an Eagle just as a Cent is 1/100 of a Dollar. The Dollar became more useful since originally only the wealthy owned Eagles and a Dollar was the standard daily wage before the Federal Reserve was begun.
 
Gold's spot price broke $2600/ounce briefly yesterday. A record.

Silver seems to hover near $41, high but no record which is more like $50. Of course silver has a history of plummeting back to far lower prices, while gold has tended up and up despite small setbacks as it goes.

Things seem to be getting quiet on the retail front now. Gold and silver might be out of the average stacker's price range. For a brief time I saw excitement around 1/10 ounce gold but even that seems to have faded.

Gold holders probably aren't selling too much, waiting for another jump upward first?

Silver stackers seem to be trying to cash out in droves though. My guess is that its historically low prices have attracted people with no financial business buying it in the first place, and now they have bills to pay and want the advantage of current prices. But dealers appear to be glutted with silver from this, and they are offering little enough to lead to a lot of ire. Some smaller coin shop vloggers seem to have another "angry silver seller" story each day.

I've seen gold guys refer to silver as "sucker's money." Maybe they've been through this before, but they seem to have a point to some degree.

If you can't afford to buy it and hold onto it for a year, 5 years, 10 years why even start? I could see having a few pretty specimen coins, but some of these guys seem to have piled up hundreds of ounces over time like magpies. Suddenly they need cash because they've been living on debt and the wolf is at the door.

People!
 
This U.S. Mint medallion coin is still on presale, but the word is that many orders have been cancelled. I think they could have done better, I don't really care for this rendering of The Man of Steel.
Superman.jpg
It's not too cheap. A West Point Mint "proof" coin,1/2 ounce of 24 Karat (0.9999) gold and 1.063 inches in diameter. $2790 pre-order price. These Mint coins usually have high markups, but here there are licensing fees as well.
 
Jacob Petersheim said:
Gold's spot price broke $2600/ounce briefly yesterday. A record.

Silver seems to hover near $41, high but no record which is more like $50. Of course silver has a history of plummeting back to far lower prices, while gold has tended up and up despite small setbacks as it goes.

Things seem to be getting quiet on the retail front now. Gold and silver might be out of the average stacker's price range. For a brief time I saw excitement around 1/10 ounce gold but even that seems to have faded.

Gold holders probably aren't selling too much, waiting for another jump upward first?

Silver stackers seem to be trying to cash out in droves though. My guess is that its historically low prices have attracted people with no financial business buying it in the first place, and now they have bills to pay and want the advantage of current prices. But dealers appear to be glutted with silver from this, and they are offering little enough to lead to a lot of ire. Some smaller coin shop vloggers seem to have another "angry silver seller" story each day.

I've seen gold guys refer to silver as "sucker's money." Maybe they've been through this before, but they seem to have a point to some degree.

If you can't afford to buy it and hold onto it for a year, 5 years, 10 years why even start? I could see having a few pretty specimen coins, but some of these guys seem to have piled up hundreds of ounces over time like magpies. Suddenly they need cash because they've been living on debt and the wolf is at the door.

People!
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Don't you mean $3600, not $2600? It is there again this morning.
 
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