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Physical vs paper PM


SPGfuntime

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In my opinion having paper PM like GLD, SLV etc., with no intention to actual take it delivery of PM is infect really negative even for speculate investors and did not find anywhere that someone tell that?! There are some explanations like paper PM are not so good like physical, what is basically in my opinion not true, as paper PM is infect in the end really NEGATIVE for those who invest in them! Why is not anywhere explained?! So, why? Why paper PM are introduce in first place? One of the biggest reasons is to control physical trade of PM! As there are limited quantity of physical PM investors were offered to buy paper PM. But what you do when you buy paper PM? You infect give PM market maker part of power to adjust prices (lower, higher or steady) of  PHYSICAL PM, to their wish! So when you buy paper PM with no intention to take delivery, you are infect betting against yourself, other investors who buy paper PM and against whole others investors/stackers who own physical PM. And that s why this is the most stupid move which one investor can do, to bet against yourself!


Something different but similar thing is with bonds, with investing in bonds you are telling I am satisfied how my government do and handle fiat system, so I invest in my government to keep good work!


Also very confusing is that PM in US is cheaper than in EU and UK, for example you have even that UK and EU PM is cheaper in US than actual in EU and UK, how that can be? (Selling deals seems also better) . Maybe it is because the rest of world infect paying price for cheaper PM in US or simple in US they have better business model..

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Paper PM have no upfront taxes, minimal spread, minimal custodial risks.  Last March when silver tanked and physical silver was unavailable in due to no stock, i was able to buy via ETF and profit from subsequent rise.  So its horses for courses. 

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Ok there is short time advantages, but this is exactly what I am talking about. You wrote;

"physical silver was unavailable in due to no stock, i was able to buy via ETF and profit from subsequent rise!"

And on end that is also effect on general price moment :-)

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Paper PM is easy to trade very quickly and has few restrictions. The large impact risk is you don’t actually own the PM and if they chose not to honour it for any reason you have lost everything. To date this has been very unlikely to actually happen. Buying and storing PM yourself removes this risk but opens up other challenges.

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4 hours ago, trozau said:

Physical all the way. If you can’t hold it, you don’t own it.

 

this is a moot point. very few people want to actually own physical metal. many if not all on the forum

use physical metal as a means to something that they do want to own, eg house, better standard of

living etc. if people can get to their goal of buying a house via metal etf's then who cares that they

never handled any physical metal? holding physical metal is not important. what is important is achieving

your goals. there are many ways to(correctly) achieve a goal and many of them does not require the

holding of physical metal. physical metal plays it's part within a strategy, but it is not the whole strategy.

 

for people who like to trade fluctuations in the price then paper contracts(etf's) is the better choice.

for uncertain times of pricing and longer term holdings then physical metal has the advantage.

decide on what your purpose is and choose the best tool for the job.

 

HH

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16 hours ago, SPGfuntime said:

Also very confusing is that PM in US is cheaper than in EU and UK.

Nothing preventing you from buying Apmex International one of the largest US dealers and they will ship to the UK no import charges (on investment Gold).

Paper vs Physical both needed

Physical long term store of wealth and insurance.

Paper for speculative short/medium term goals. Pros and cons to both.

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All that can be similar achieved through something other, maybe PM miners (at least those who have real balance sheets and although to them have some questions to be asked). Anyway physical should be first and paper PM like GLD, SLV etc., looks like shooting in your feet! Even Buffet did not want to buy GLD! About physical prices, good point for Apmex, but most PM is still much more expensive for buy and cheaper to sell in EU and UK in comparation with US. Just for example someone put here few time ago topic and price link for shop about UK 10oz slv coins and among the cheapest was 242 Euro in US and in EU and UK cheapest from 305-327Euro.  After all what you need to transport, to insure, staff for handling, maybe to store etc., it s cheaper in US and it s UK made..

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32 minutes ago, SPGfuntime said:

All that can be similar achieved through something other, maybe PM miners (at least those who have real balance sheets and although to them have some questions to be asked).

 

holding physical metal is not remotely close to holding shares in miners.

(think what is its purpose)

 

33 minutes ago, SPGfuntime said:

About physical prices, good point for Apmex, but most PM is still much more expensive for buy and cheaper to sell in EU and UK in comparation with US.

 

you can't compare prices in the largest economy in the world versus a smaller economy.

economies of scale/global logistics makes american prices a lot cheaper.

 

HH

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8 minutes ago, SPGfuntime said:

Also when we are about exotic things 😀,  any thoughts about price of PM shown on Usdebt clock..Ofcourse prices are from some parallel universe reality, not ours; silver 3900$/oz, 30.000/oz gold, lol haha..

https://usdebtclock.org/

 

 

the us debt clock is tradition, it has no bearing on reality. the world has moved on since precious metals

were used as payment for trade.

 

HH

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57 minutes ago, SPGfuntime said:

Anyway physical should be first and paper PM like GLD, SLV etc., looks like shooting in your feet!

 

using the best tool for the purpose at hand should be first. sticking stubbornly to holding physical

looks like shooting yourself in the foot.(you are reducing the opportunities available to you for no good

reason). we live in an ever changing world and people are flexible.

 

HH

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On 02/10/2020 at 15:45, MrTT said:

Stay away from ETF !

They take your money from the ETFs and use it to manipulate the price of the pm you invest in.

 

 

every time you make a physical pm purchase, the bullion dealer that you bought it from(assumption)

is using your money plus profits to restock. this mean they are making orders for more mintage or

production of a certain coin or design. this effectively dilutes the value of the physical metal that you

just bought.

 

HH 

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  • 1 month later...


Not quite SLV and GLD is much different than miners, for example if you invested money into real miners, they, on that way become less depended on landing money from financial sector and they can more influence on price of their product and size of mining if they find interest in that. Dont forget a lot of date are questionable for example it seems that ratio of mining is max 1oz gold to 8oz of silver..


About price of PM on US debt clock, I did some research and it seems this huge prices of silver/gold on US debt clock are without fed money landing in last printing wave..Also it seems that masters from shadow really see 4000$/oz silver as true value of silver. For gold 30.000$/oz I run on some different opinion but it seems it could be it is that accepted value. For example, 4000$/oz for silver is just for currencies(money) supply($) issued in US not for whole world, regardless it is reserve world money! Also this number around 4000$/oz for silver from US debt clock you can find on more places as accepted, for example number of total paper silver is 200-300 times more than physical silver, if you multiple that with current spot price of silver (20-25$) again you get that magic number price of 4000$/oz. So masters from shadows seems see todays value of 4000$ as a price of 1 oz of silver as a true value. For gold there are some different opinion, it should be search and analyze more.

Anyway this is some analyze and mean nothing, ofcourse financial sector set a prices and it can happen they suppress PM for example 3-4 years more. Financial sector is afraid mostly one thing - that it product whatever it is( paper, digital etc.) become not need it..

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Also it looks like there is a big shortage of PM in Europe, it does not matter if it s write, in stock or pre-sale, everything is on pre-sale now and you will have to wait a lot of time to be delivered. At least for me and people I know, lol ! Dont think it is because staff can not handle all job, because boss would be hire more people to make bigger profit. At the end it does not matter why shortage is, that there is no shortage you would get your PM immediately, especial if it is in stock!


So we have situation where we have massively shortage of PM but still suppressed fiat price of that same PM. That can be because people did not still put their PM in use. For example you can buy PM for 20-25$/1850-2000$ but there is an agreement between holders of PM that it will be accepted as for example 5more times value in service or goods.That would be force to correct real value of PM. But it s some other long story.


Anyway I need information, I know, that is situation in EU, I am interesting, is it same in US? Do you still in US  getting your orders for new PM from dealers, mints (not from second hand) in 1-7 days or now you wait for your orders longer?

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