Wednesday, June 15, 2011

How to Buy Gold and Silver for the Novice

I was reminded today of how difficult it can be for a person, new to the world of gold and silver, to go about the process of buying it.

Which company do I buy from? Are they legitimate (ie will some dodgy guy run off with my money)? Is the gold or silver pure? What does 'pure' mean anyway? How much should I buy? Why is the metal so much more than the spot price? Do I buy physical gold or silver and have it delivered or stored? When should I buy?

Here is my take on this and some recommended companies you can use. I recommend these companies because I have used them. I trust them, have always received the metal and also know them personnally (I have been to the Company offices in Panama for a visit).

For large buyers of bullion I recommend The Anglo Far-East Company. Go to their website and look over the information there. They are a private company who provide 'white glove' treatment to clients. They have your privacy in mind always.

Here is a paragraph from the website:
"AFE Clients are typically sophisticated, affluent individuals, families, and institutions that require a high level of discretion, expertise, and security when selecting a custodian for their bullion assets."

If this is you, then I would be honoured to help you discuss with them what you require. Your reference is AN-001.

The second recommendation is a company formed under Anglo Far-East called YOUnique. With YOUnique, you can purchase small physical amounts of bullion including bars and coins. You can see the range of products here. You can purchase immediately or start a savings program and receive your metal when your desired savings product is paid for. I use this saving method and have always received my metal.

A further recommendation is Mom's Silver Shop in California. They are easy to deal with. They are good for purchases of silver rounds. The 'Mom' is the mother of Jason Hommel, a well known silver expert.

The gold and silver purchased with both Anglo Far-East and YOUnique is LBMA certified (see explanation here). It is .9999 pure.

With Anglo Far-East, the minimum required is $50,000 (in USD). However, there can be some negotiation.

With YOUnique, you can buy and save what you like.

Gold and silver is always more expensive to buy than the spot price. The more you buy in ozs, the closer to the spot price you can get. For example it is cheaper to buy a 400oz bar of gold per oz than a 1 gram bar per oz. The premium is higher as it is more expensive to fabricate smaller bars. A good example is, it is cheaper to buy a whole cattle beast for meat than to buy a small, gourmet cut.

How much physical gold and silver you have in your actual possession is up to you. But remember the security issues. I would recommend a little that is easily accessible but with larger amounts you use Anglo Far-East.

When you buy is up to you, but the mistake I think many people make is they wait for the price to come down before they buy. Using a dollar cost average is the best method, that is you buy when you can and regularly. Sometimes you may lose with the spot price and sometimes you may win. That is why it is called a dollar cost average. This is why the YOUnique savings programme is beneficial.

Let me know if you have any further questions. Place them in the comments section.

Gold in New Zealand dollars: $1866.66 per oz
Previous all time high: $1955.10 per oz

Silver in New Zealand dollars: $43.44 per oz
Previous all time high: $48.58
per oz

Articles of interest:

The value of Gold

See article here

Debt repudiation by hyperinflation

See article here
King World News

The Anglo-Far East Company
The Original Private Bullion Custodian
Your reference: an-001

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