Gold/silver bars - good or bad idea?

[BedMac]

Hi Valued Members,

 

I am new to the World of Precious Metals so excuse 'daft' question and if that topic was discussed elsewhere please direct me there.

I would like to buy some silver and probably gold too. In terms of gold I can't afford bars so will buy bullion coins, but I am considering buying silver bars. And here comes the question: What size bars are easiest to sell and how to store them, and by that I mean whether to have them shipped home or store at the dealers vault?

Thanks for your imput and all comments welcome,

 

BedMac

[VikingJester11B]

Welcome. 

Bars range in size from 1g to 1000+oz.  The most common sizes you see for stacking are 1oz-100oz.  The larger the bar GENERALLY the lower premium you will pay.  The most common bar size bought around here in my opinion is 10oz.  Generally this is because most people prefer bullion coins in the 1oz and 2oz sizes. You will have no problem selling a bar between 1oz-10oz.  They are quite liquid and every dealer and LCS needs these sizes for inventory as stated they are usually the most common sizes bought.  You should also have a pretty easy time selling a Kilo bar (32.15oz).  A 100oz bar will depend on the price you want and where you are trying to sell it.  Your LCS may deal with silver a lot and love a 100oz bar, or maybe they primarily move gold and aren't interested in something that big because they know it'll sit in the shop for months.  You should still be able to find a buyer for it no problem, you just may not move it as fast for the price you want. For just beginning I would recommend 10oz bars if you're set on buying bars. Easy to sell, easy to buy, easy to store.  You can also partially sell off your stack with smaller bars, instead of dumping nearly the whole thing with larger bars.

As for storage the big rule of thumb is "If you can't hold it, you don't own it." Get it shipped to your home and spend some money on a quality safe to store it in.  You should be able to have access to your metals at any time. Physical precious metals should be in your possession 

Commonly stacked 10oz bars are the 10 oz Brittania (sold out everywhere), The Royal Canadian Mint 10oz (Sold out everywhere), the Scottsdale Stacker (available from the scottsdale mint website for $184, not a bad price in todays climate), and generic 10oz bars (Golden Eagle Coins has second hand generics for $176 right now)

You may get some of your premium back when selling for the scottsdale bars, with the generics you definitely won't get more than spot when selling.  Personally I'd go with the scottsdales but I'm also a collector in addition to being a stacker so I gravitate towards the prettier stuff.  They also have some 1oz & 2oz stacker rounds in stock so you could diversify your amounts a bit in the same purchase and only pay once for shipping.  You won't go wrong with either though, silver is silver. 

 At the end of the day purchase whats in your budget, don't panic buy, and most importantly, enjoy what you buy. Take them out, look at them, feel them. Stacking is a hobby as much as it is an investment for most people.

[BedMac]

4 hours ago, VikingJester11B said:

Welcome. 

Bars range in size from 1g to 1000+oz.  The most common sizes you see for stacking are 1oz-100oz.  The larger the bar GENERALLY the lower premium you will pay.  The most common bar size bought around here in my opinion is 10oz.  Generally this is because most people prefer bullion coins in the 1oz and 2oz sizes. You will have no problem selling a bar between 1oz-10oz.  They are quite liquid and every dealer and LCS needs these sizes for inventory as stated they are usually the most common sizes bought.  You should also have a pretty easy time selling a Kilo bar (32.15oz).  A 100oz bar will depend on the price you want and where you are trying to sell it.  Your LCS may deal with silver a lot and love a 100oz bar, or maybe they primarily move gold and aren't interested in something that big because they know it'll sit in the shop for months.  You should still be able to find a buyer for it no problem, you just may not move it as fast for the price you want. For just beginning I would recommend 10oz bars if you're set on buying bars. Easy to sell, easy to buy, easy to store.  You can also partially sell off your stack with smaller bars, instead of dumping nearly the whole thing with larger bars.

As for storage the big rule of thumb is "If you can't hold it, you don't own it." Get it shipped to your home and spend some money on a quality safe to store it in.  You should be able to have access to your metals at any time. Physical precious metals should be in your possession 

Commonly stacked 10oz bars are the 10 oz Brittania (sold out everywhere), The Royal Canadian Mint 10oz (Sold out everywhere), the Scottsdale Stacker (available from the scottsdale mint website for $184, not a bad price in todays climate), and generic 10oz bars (Golden Eagle Coins has second hand generics for $176 right now)

You may get some of your premium back when selling for the scottsdale bars, with the generics you definitely won't get more than spot when selling.  Personally I'd go with the scottsdales but I'm also a collector in addition to being a stacker so I gravitate towards the prettier stuff.  They also have some 1oz & 2oz stacker rounds in stock so you could diversify your amounts a bit in the same purchase and only pay once for shipping.  You won't go wrong with either though, silver is silver. 

 At the end of the day purchase whats in your budget, don't panic buy, and most importantly, enjoy what you buy. Take them out, look at them, feel them. Stacking is a hobby as much as it is an investment for most people.

Thank you VikingJester11B for sound advice and your time to write all this, much appreciated. I kind of knew that the smaller the easier to shift but it is good to have other forum members opinion on that. At the moment I would like to buy some silver bars - will follow your advice and get some 10oz ones, and when coins become available will buy them. 

And here comes another question, cast bars or minted bars? Apart from visual advantage, is it worth to pay more for minted ones? Are they easier to sell?

[VikingJester11B]

Ironically, most poured bars it seems go for more than the machined/pressed bars (eg an Englehard or JM poured on ebay almost definitely costs more than the pressed version in the same denomination). Atleast in smaller denominations. Whether this is demand, cost of labor, etc I'm not sure and someone else would have to chime in. Once you start getting towards 50+ oz most bars are poured bars though. I would just go with personal preference or price.  At the end of the day they're both silver.  I personally don't own any poured silver, I've never liked one enough to pull the trigger.  Certain pressed bars such as the Britannia, RCM, Scottsdale, sunshine, englehard, JM, etc may be in more of a demand in the numismatic aspect or in the recognition and reputation department, but at the end of the day 10oz of poured silver is the same amount as 10oz of machined silver.  For example a new 100oz RCM machined bar costs the same (from a dealer) as a new 100oz Englehard poured ($1,720) If you like poured more aesthetically Prospector Gold and Gem offers poured bars for reasonable prices in all sizes. The buy and sell section here often has pours available as well. 

[cypressc]

Some negatives of bars:

1) Not always easy to sell on the quick. 

2) Not a good way to "leg in". As with all investments, spacing out your purchases to avoid getting caught with a sudden price move is critical.

3) Low premiums on the way out, too. 

Diversify your stack, don't ever buy a large percentage of your stack on one transaction, and always have an exit plan. 

Bars are great. I love bars. I really love big bars. I would never just own only all large bars. 

[Bimetallic]

6 hours ago, BedMac said:

Hi Valued Members,

 

I am new to the World of Precious Metals so excuse 'daft' question and if that topic was discussed elsewhere please direct me there.

I would like to buy some silver and probably gold too. In terms of gold I can't afford bars so will buy bullion coins, but I am considering buying silver bars. And here comes the question: What size bars are easiest to sell and how to store them, and by that I mean whether to have them shipped home or store at the dealers vault?

Thanks for your imput and all comments welcome,

 

BedMac

1. If you can afford gold coins, you can afford gold bars, since they come in similar sizes. For example, there are fractional gold coins in tenth ounce and quarter ounce sizes (and 1/20 ounce in some cases, like the Maple Leaf). Similarly, there are lots of bars in 1, 2.5, 5, and 10 gram sizes. A tenth of a troy ounce is 3.1 grams. (Premiums are higher on fractional bullion.)

2. The easiest to trade, or most liquid, are 1 oz in both gold and silver. VJ mentioned 10 oz bars. Those are only common for silver. There are 10 oz gold bars, but they cost more than $16,000 at current spot, so that's rarefied territory. They'll be harder to sell since few people can afford them, and dealers will be nervous about counterfeits (google 10 oz PAMP bar counterfeit New York). For silver, 10 oz and kilo bars are fine, but 1 oz is the most common.

3. It's a mistake to buy retail physical bullion right now, if you can even find any in stock. Premiums are temporarily insane because of an explosion in demand due to the pandemic. You'll lose money on those premiums. See my comprehensive spreadsheet of dealer premiums from before the pandemic – it will give you an idea of the norm in the US, which isn't much different from the UK in normal times, except for VAT.

4. Contrary to some on this forum, I think it's very smart to buy allocated vaulted bullion, especially now. Or gold and silver ETFs. As spot price climbs, they're almost pure profit. Right now if you buy retail physical you won't profit from an increase in spot price, because of the inflated premiums you'd have to pay. I recommend BullionVault (which has a London vault), and OneGold (a joint APMEX and Sprott venture). They have the lowest fees. BullionVault charges 0.5% commission on transactions, 0.12% per year storage for gold, and 0.48% per year storage for silver. I think OneGold is normally cheaper, but they might have increased their fees due to the surge in demand. Either one is massively better than retail physical premiums right now, as are ETFs.

[Stuntman]

Agree with pretty much everything that @VikingJester11B and @Bimetallic have already posted.
I would go with 10 oz silver bars (minted) and 1 kg silver bars (cast).  That's just my personal preference.  I like the Britannia bars in the 10 oz size and the Metalor bars in the 1kg size.

Personally I avoid gold bars but that's just beacuse I have a preference for the coins.

[Tangomachine]

If you cant hold it you dont own it.

I find most popular bars are 1oz, 10oz and 1kg in silver.  Never had a problem shifting them . Personally I like the vintage bars as well but you tend to pay a premium on them depending on rarity etc. Cant beat a bar with a bit of patina

[BedMac]

17 hours ago, Bimetallic said:

1. If you can afford gold coins, you can afford gold bars, since they come in similar sizes. For example, there are fractional gold coins in tenth ounce and quarter ounce sizes (and 1/20 ounce in some cases, like the Maple Leaf). Similarly, there are lots of bars in 1, 2.5, 5, and 10 gram sizes. A tenth of a troy ounce is 3.1 grams. (Premiums are higher on fractional bullion.)

Agree 100%, just in my head, bar means something  slightly bigger than 1 or 5 oz, say 250g would do 😉

 

15 hours ago, Tangomachine said:

If you cant hold it you dont own it.

I already added this to my notes, thanks 👍

17 hours ago, Bimetallic said:

4. Contrary to some on this forum, I think it's very smart to buy allocated vaulted bullion, especially now. Or gold and silver ETFs. As spot price climbs, they're almost pure profit. Right now if you buy retail physical you won't profit from an increase in spot price, because of the inflated premiums you'd have to pay. I recommend BullionVault (which has a London vault), and OneGold (a joint APMEX and Sprott venture). They have the lowest fees. BullionVault charges 0.5% commission on transactions, 0.12% per year storage for gold, and 0.48% per year storage for silver. I think OneGold is normally cheaper, but they might have increased their fees due to the surge in demand. Either one is massively better than retail physical premiums right now, as are ETFs.

This is against what was said above😉 and probably makes sens with larger purchases when storage and shipment could be difficult.

 

 

Thank you everyone for your comments and input, much appreciated.

Unfortunately I have more questions, sorry😉

- why some silver bars are VAT exempt (are they for foreign uinvestors?)?

- why simillar sizes bars (gold or silver, cast or minted) have different prices, depend on manufacturer (is it esthetics or mint reputation or history?)?

- why different year coins have different prices: for example on gold.co.uk 1oz silver Canadian Maple from 2018 is considerably cheaper than one from 2020? 

 

Many thanks for all your replies,

 

BedMac

[Bimetallic]

You can do any amount with most ETFs and vaulted outfits. It doesn't have to be large, and you'll make a lot more money if spot climbs than you will buying retail right now.

I don't know too much about VAT in the UK. Most silver is subject to VAT. I know you can avoid it if you use a vaulted service outside the UK or EU.

Some manufacturers are more prestigious than others, like PAMP Suisse. One differentiator is whether the refiner is on the LBMA Good Delivery list. Those products tend to be worth slightly more than random refiners not on the GD list. It also depends on beauty and demand. GD list membership also matters for tax exemptions in some jurisdictions. For example, to be exempt in Singapore the silver has to be made by a GD refiner, or be on their list of national minted coins.

Newer coins are generally worth more because they've been handled less. The general assumption when you buy current year coins from dealers is that those coins are brand new, never touched by previous owners. Prior year coins are considered "secondary market" and worth a bit less. Assuming they're not certified, you never know whether there will be scratches or other issues. (And certified or "slabbed" coins cost vastly more – the premiums with silver coins can be 100%.) Some dealers in the US have adopted a gimmick where they guarantee that a coin or tube has come straight from the mint and never been owned. They put a special seal on it or completely seal the coin in a hard plastic container. It's usually called MintCertified or MintDirect or something along those lines. They charge an extra premium for them.

[BedMac]

Thanks Guys for all your replies, much appreciated 👍

[PB1]

You have a varying scale of premiums and liquidity. 

I find 1kg silver bars are very liquid. Some dealers will give you very tight buy and sell premiums on allocated bars if you store with them. For example, with the particular dealer I use in Singapore, I pay 3% above spot to buy 1kg nadir bars and can sell them at 2% above spot (so my net buy/sell cost is only 1%). It costs me 0.6% to store but I am happy to pay storage for a few years for the added comfort of almost 24hr liquidity. I dont have to pay VAT or capital gains when i sell. I like keeping half of my portfolio in 1kg bars because I can sell them all in 1 go at very reasonable prices if necessity dictated. 

Coins are interesting. Coins are only good if you can sell them higher than if you had bought 1kg bars. So for example, when I buy coins, I take a note of the spot price at the time of purchase and in my spreadsheet, I calculate at what price I would need to sell the coin for the investment to have been better than if I had just bought a bar. Obviously if I cannot resell that coin higher, that means I should have just bought a bar instead and vice versa. The coins where you can sell them much higher than if you had bought a bar is obviously the best investment. However selling them may take abit more time but many are willing to forgo some liquidity if they know they have many of the right coin that others will want.

There are definitely coins out there which are better investments than buying bars. These are usually what I call semi-numismatic bullion coins which have limited mintages and are popular with collectors. I usually buy these coins in bulk to take advantage of extra discounts and sell some to reduce my overall cost even further. Having a variety of coins is fine if you have a massive portfolio. But if you are going to initially buy say 100-500 coins,  I personally think its best to concentrate your purchase on the right coin rather than for example buying 10 of each.

Buying singular coins is a no go in my opinion. You end up paying too much for postage, any indirect costs like postage has to be taken into account when thinking about purchases.

Happy to share further thoughts if you have any questions.

 

 

[BedMac]

Thank you @PB1, loads of valuable info in your post 👍

5 hours ago, PB1 said:

I find 1kg silver bars are very liquid. Some dealers will give you very tight buy and sell premiums on allocated bars if you store with them. For example, with the particular dealer I use in Singapore, I pay 3% above spot to buy 1kg nadir bars and can sell them at 2% above spot (so my net buy/sell cost is only 1%). It costs me 0.6% to store but I am happy to pay storage for a few years for the added comfort of almost 24hr liquidity. I dont have to pay VAT or capital gains when i sell. I like keeping half of my portfolio in 1kg bars because I can sell them all in 1 go at very reasonable prices if necessity dictated. 

That make sense, but... what if there is a serious catastrophy on the global markets/economy and all transactions are blocked and you would not be able to do anything with your PMs... Or the dealer go bankrupt? Ore government decides to seize your PM? I know those are extreme situations but I guess possible. I am sure you come across Michael Maloney ( I just recently read his book and watched his series - "Hidden secrets of money') and he is predicting major catastrophy in the near future... Even if it is not true it makes you think at least a little...

6 hours ago, PB1 said:

There are definitely coins out there which are better investments than buying bars. These are usually what I call semi-numismatic bullion coins which have limited mintages and are popular with collectors.

I am probably to new to this topic to know which coins to buy (I believe you are not talking about American Eagles or Wienner Philharmoniker) but will carry on learning.

 

6 hours ago, PB1 said:

But if you are going to initially buy say 100-500 coins,  I personally think its best to concentrate your purchase on the right coin rather than for example buying 10 of each.

That was kind of part of my plan to have a nice selection of coins - investment but also to admire them as most of them are very nice.

 

Eh... decisions decisions!

And another one is whether to buy now or wait... If I listened to M. Maloney I should buy now I think... Members of this forum I believe would rather wait for another dip in PM market 🤷‍♂️

[PB1]

1 hour ago, BedMac said:

Thank you @PB1, loads of valuable info in your post 👍

That make sense, but... what if there is a serious catastrophy on the global markets/economy and all transactions are blocked and you would not be able to do anything with your PMs... Or the dealer go bankrupt? Ore government decides to seize your PM? I know those are extreme situations but I guess possible. I am sure you come across Michael Maloney ( I just recently read his book and watched his series - "Hidden secrets of money') and he is predicting major catastrophy in the near future... Even if it is not true it makes you think at least a little...

I am probably to new to this topic to know which coins to buy (I believe you are not talking about American Eagles or Wienner Philharmoniker) but will carry on learning.

 

That was kind of part of my plan to have a nice selection of coins - investment but also to admire them as most of them are very nice.

 

Eh... decisions decisions!

And another one is whether to buy now or wait... If I listened to M. Maloney I should buy now I think... Members of this forum I believe would rather wait for another dip in PM market 🤷‍♂️

Apologies I havent copied and pasted the correct parts. 

Singapore has a strong rule of law and my broker is not connected with any bank (they are like the Switzerland of asia). My plan is to remove them once silver is on a sustainable uptrend. I own the bars and I have the serial numbers etc, im not yet super worried but if the whole world was experiencing Zimbabwe level hyperinflation, i may start to worry about consolidating.

Yes, i wasnt referring to eagles or austrian. I also have coins which i know I will never sell and intend to hand down to my kids. I justify making some of these purchases because i buy and sell alot of silver. For example, last year I sold around 170kg of silver and I used some of these profits to make riskier bets on certain very low mintage display coins. 

Yes, heard of him. I started collecting before I was introduced to him but my background is finance and banking so I fortunately already had a grasp of monetary policy and knew about the deception going on in the world.

Buying now or waiting partly depends on how much you already have. But on the other hand, some of the premiums on coins like mass produced eagles and maples are ridiculous, i wouldnt touch them right now. If you can buy bars right now close to spot, then its worth it. 1kg bars were my biggest purchase last month before my broker hiked up his premiums. I did buy some coins as well, i was able to pickup a large quantity of 2020 perth rectangular dragon coins around 19usd which i thought was worth it. And i also picked up a decent amount of korean chiwoo coins just a few days ago slightly above 19usd. I usually only buy coins now if i think they will hold their value. For example last year I bought a large quantity of 2019 perth rectangular dragon coins. I was immediately able to sell a portion 10-15% higher in price. There are still deals to be had even in this high premium environment, the trick is to pick up undervalued coins very much like a stock picker would look at stocks.

 

[BedMac]

20 hours ago, PB1 said:

es, heard of him. I started collecting before I was introduced to him but my background is finance and banking so I fortunately already had a grasp of monetary policy and knew about the deception going on in the world.

Lucky you, I've just learned about it about  2 weeks ago and it scared me a bit.

 

20 hours ago, PB1 said:

Buying now or waiting partly depends on how much you already have. But on the other hand, some of the premiums on coins like mass produced eagles and maples are ridiculous, i wouldnt touch them right now. If you can buy bars right now close to spot, then its worth it. 1kg bars were my biggest purchase last month before my broker hiked up his premiums. I did buy some coins as well, i was able to pickup a large quantity of 2020 perth rectangular dragon coins around 19usd which i thought was worth it. And i also picked up a decent amount of korean chiwoo coins just a few days ago slightly above 19usd. I usually only buy coins now if i think they will hold their value. For example last year I bought a large quantity of 2019 perth rectangular dragon coins. I was immediately able to sell a portion 10-15% higher in price. There are still deals to be had even in this high premium environment, the trick is to pick up undervalued coins very much like a stock picker would look at stocks.

I don't have anything yet and it looks like I've chhosen the worst timne to start investing in PMs.

 

Thans for all your comments, very valuabe 👍

[Bimetallic]

23 hours ago, cinereus said:

True but less than about £10k and your premiums/fees are worse than physical.

Really? Can you give some examples? I'm not aware of big fees with ETFs, or with the two vaulted outfits I like: BullionVault and OneGold.

[OneBlueSummer]

18 hours ago, cinereus said:

e.g. £1k gold with BullionVault for 5 years is 21% premium. Physicals is available for <4% with P&P at the moment.

 

Wow good catch, whats killing it is the monthly minimum charge of 8$ USD per mo storage.

OneGold is $5/ quarterly min or 3% on silver or .12% on gold. WHich would be 100$ storage for 5 years on 1k PM.

 

 

What Im having trouble wrapping my mind around is the benefit of these "vaulted PM" vs ETF. Ya they are backed by actual 1:1 raw but when and how would that ever benefit you?

I was sold on it and already put money in onegold but now Im re thinking it like whats the point?

One thing that sold me on it was how you could exchange for PM.... but now that Im thinking about it, there is no difference between that and selling off your ETF and buying from wherever.

Am I missing an actual benefit I would ever feel or see? @Bimetallic whats your take ?

[Blehhhh]

I never looked into OneGold. 

I only really compared BullionVault and GoldMoney. I just felt these were more established.

One finding was that if you are spending less than 20k, its not really worth going with either. Minimum fees will just kill you. Stick with physical if this is the case in my opinion.

[Bimetallic]

I'm having trouble following the cost estimates for BullionVault. Is that their calculator? Why does it cost so much more than their 0.48% storage rate per year?