Advice for a new stacker with '0'ozt gold (Sov vs 1oz)

[FourNinesFine]

12 minutes ago, FlorinCollector said:

My input would be do not start with buying silver. With Sovereigns you can only be stung on a small scale. You can be stung badly on your silver and you will only realise this when you come to sell.

I'm in this for the long game, so I'm hoping that I won't be stung that badly, if and when I chose to cash in any of my silver. How bad can it be, assuming that I'm already resigned to the fact that I'll lose whatever premium I originally paid? Unless the floor falls out of the silver market completely.

All that said, with premiums what they are ... I have quickly come around to the fact that gold is a better (smarter?) fit with my long-term investment ambitions and I just need to come to terms with the fact that it will mean stacking coins with a much smaller diameter than I'd originally intended. 😆

But I can't promise I won't stack any more silver... there's just something about those goddam Maple Leaves...

Thanks @FlorinCollector, I really appreciate the feedback.

FNF.

[FlorinCollector]

Yes I think silver is attractive due to price. Another point I would make is diversifying between coins and bars is not actually diversifying as both are still silver and one is harder to sell than the other - thus making it harder for yourself to sell some of your silver. 
 

A small amount of it for a punt I think is ok but not holding a large sum of it. You have lower premiums on gold - it is easier to shift and you get no issues with milking. You will sell easier on here but people will expect it to be at the cheapest per ounce as possible. I would at least look at dealers for the coins you are buying and look at the spread just so you can see what kind of loss you would make if you ever had to liquidate quickly. 
 

There is always the option for you to buy paper silver as an ETC. This would be close to spot and easy to liquidate at any point at the spot price. No need to deal with trying to get the best price.

Just a few pointers I hope help.

[FlorinCollector]

20 minutes ago, Monsmoy said:

Do I need to check everything I have bought off you?😁

Id be disappointed if you didn’t 😂😂

[ady]

7 minutes ago, FourNinesFine said:

I have quickly come around to the fact that gold is a better (smarter?) fit with my long-term investment ambitions and I just need to come to terms with the fact that it will mean stacking coins with a much smaller diameter than I'd originally intended. 😆

Good for you, I like the golden stuff too, but in the camp of silver having the upside It is a pain on the volume it takes though.

[FourNinesFine]

It would be disingenuous not to share this (as seen on the 'today I received thread) - given that it's pertinent to the discussion.

My ratio of silver to gold has shot out to an impressive 40:1 in an instant.  😁

 

 

[FourNinesFine]

6 minutes ago, FlorinCollector said:

Just a few pointers I hope help.

Very helpful indeed. I'm genuinely grateful for the generous responses!

FNF.

[FlorinCollector]

36 minutes ago, ady said:

This is true, but "junk" silver is where I started and was a good buy, not really worth forging on the 3d/6d level. Got stung when I started buying really shiny 1oz's, liked the prospectors and got duped, but now put this down to a learning curve. Would still love some prospectors but feel these have been over shadowed with all the fakes.

Good point added mate. I wasn’t even going down the route of fakes. I was just meaning trying to recoup your money from premiums paid when markets change and sentiment towards once collectible things becomes non existent. 

[Foster88]

22 hours ago, stefffana said:

Hi, @FourNinesFine

I will tell you what I am thinking about stacking silver. It is the same answer for the question asked by @Bigmarc in April 2021 in another very interesting topic on forum:  "How much silver to hold? " see https://www.thesilverforum.com/topic/46885-how-much-silver-to-hold/?tab=comments#comment-500609.

 

So, I've done copy/paste on here to answer at your very good questions about silver. My calculations from April are still pretty accurate even in after one year, at that moment the silver spot price was £18.42/g, very close to £19.04 at the time of typing. I didn't check again the silver prices at dealers to update everything, but this is the idea:

 

" I believe the real potential of silver is in spot price, not in premium. So, now I am stacking only low premium silver, very easy to sell near spot price (1000g,  500g bars, old british currency, and scrap ). I sold already all high premium coins and I've converted all in sovereigns and another silver low premium.

Why? Because in next future the industrial demand will generate a rise in spot price and my stack's value will increase and I will do profit only waiting. The shiny silver coins ( now at spot + 60-95% ) will lose from their high premium when the spot price will be high. The market demand will be for cheap silver, not for expensive coins. 

I can't understand why people are interested to pay now for a silver 1oz coin £28 - £35, equivalent at £18.42 spot price + 52% to +95% premium, when the same metal can be bought easy at 0 to 30% premium in a different shape. I am not talking about numismatic or collectible products. This is another story, I don't know this game, I am talking only about pure stacking.

About quantity... Depends on your style of life, your age, your plan of retirement, depends on what you want to give to next generation. But a minimum one is around 15kg silver and equal value in low premium gold in your stack.

This is my opinion, I am not a guru in PM, but I prefer to stay safe, speculating only the spot price and ignoring high premium products. 

 

Let's imagine a scenario, using today's spot price £18.42/oz silver and a future potential spot price x2.5 = £46.05/oz silver.

 

John bought today from a dealer 1 kg bar, paying £790.62, VAT and shipping included. This is £24.58/oz, +34% premium.

Jane bought today 32oz (app.1 kg) silver Royal Arms and she paid £1129, VAT and shipping included. This is £35.28/oz, +91.5 premium.

After few years, the spot price is £46.05/oz = £1480.7/kg and it is time to sell. 

John will sell quick 5% over spot, having in hand £1554.7. His pure profit is £764/kg.

Jane will struggle to sell at 30% over spot, but because the spot is so high, she will accept finally only 10% over spot, having in hand £1628.7. Her pure profit is only £499/kg.

It is a difference of £265/kg between John and Jane. If the stack is 15kg, the difference is £3975.

 

But let's talk about Bob. He bought today 1kg scrap silver at spot price. He paid £592. He sold his silver in the same day as John and Jane at spot price, having in hand £1480.7. His pure profit is £888.5.

Position in this game:

1. Bob:   £888.5 profit/kg;

2. John: £764 profit/kg;

3. Jane: £499 profit/kg.

 

This is rough, because in reality, Bob was able to buy more scrap than John and Jane, using the same money.

If we are talking about the same money invested, the difference is huge.

 

Let's compare now only Bob and Jane, to be more visible this difference.

Jane paid £1129/kg for Royal Arms and Bob used the same money, buying 1.9kg scrap silver.

Jane is selling after years at £1628.7 with profit £499.

Bob is selling after years at £2813.3 with profit £1684, with a difference between them of £1185.

If the stack is 15kg, the difference of profit between Bob and Jane is £17775.

 

This is the reason I am trusting in spot price, not in premiums.

I hope my explanation was clear enough for all new stackers. I know, it is difficult to see the real potential of scrap. But from scrap to treasure it is only a little step.😊 When you will see here scrap silver at spot price, do not hesitate and buy quick!😁

Happy stacking, guys, happy stacking! "

Kindest regards,

Stefan

Very good explanation @stefffana 

Scrap .925 old cutlery is a good place to start for those looking for low premium silver.

[monkstax]

22 hours ago, stefffana said:

Hi, @FourNinesFine

I will tell you what I am thinking about stacking silver. It is the same answer for the question asked by @Bigmarc in April 2021 in another very interesting topic on forum:  "How much silver to hold? " see https://www.thesilverforum.com/topic/46885-how-much-silver-to-hold/?tab=comments#comment-500609.

 

So, I've done copy/paste on here to answer at your very good questions about silver. My calculations from April are still pretty accurate even in after one year, at that moment the silver spot price was £18.42/g, very close to £19.04 at the time of typing. I didn't check again the silver prices at dealers to update everything, but this is the idea:

 

" I believe the real potential of silver is in spot price, not in premium. So, now I am stacking only low premium silver, very easy to sell near spot price (1000g,  500g bars, old british currency, and scrap ). I sold already all high premium coins and I've converted all in sovereigns and another silver low premium.

Why? Because in next future the industrial demand will generate a rise in spot price and my stack's value will increase and I will do profit only waiting. The shiny silver coins ( now at spot + 60-95% ) will lose from their high premium when the spot price will be high. The market demand will be for cheap silver, not for expensive coins. 

I can't understand why people are interested to pay now for a silver 1oz coin £28 - £35, equivalent at £18.42 spot price + 52% to +95% premium, when the same metal can be bought easy at 0 to 30% premium in a different shape. I am not talking about numismatic or collectible products. This is another story, I don't know this game, I am talking only about pure stacking.

About quantity... Depends on your style of life, your age, your plan of retirement, depends on what you want to give to next generation. But a minimum one is around 15kg silver and equal value in low premium gold in your stack.

This is my opinion, I am not a guru in PM, but I prefer to stay safe, speculating only the spot price and ignoring high premium products. 

 

Let's imagine a scenario, using today's spot price £18.42/oz silver and a future potential spot price x2.5 = £46.05/oz silver.

 

John bought today from a dealer 1 kg bar, paying £790.62, VAT and shipping included. This is £24.58/oz, +34% premium.

Jane bought today 32oz (app.1 kg) silver Royal Arms and she paid £1129, VAT and shipping included. This is £35.28/oz, +91.5 premium.

After few years, the spot price is £46.05/oz = £1480.7/kg and it is time to sell. 

John will sell quick 5% over spot, having in hand £1554.7. His pure profit is £764/kg.

Jane will struggle to sell at 30% over spot, but because the spot is so high, she will accept finally only 10% over spot, having in hand £1628.7. Her pure profit is only £499/kg.

It is a difference of £265/kg between John and Jane. If the stack is 15kg, the difference is £3975.

 

But let's talk about Bob. He bought today 1kg scrap silver at spot price. He paid £592. He sold his silver in the same day as John and Jane at spot price, having in hand £1480.7. His pure profit is £888.5.

Position in this game:

1. Bob:   £888.5 profit/kg;

2. John: £764 profit/kg;

3. Jane: £499 profit/kg.

 

This is rough, because in reality, Bob was able to buy more scrap than John and Jane, using the same money.

If we are talking about the same money invested, the difference is huge.

 

Let's compare now only Bob and Jane, to be more visible this difference.

Jane paid £1129/kg for Royal Arms and Bob used the same money, buying 1.9kg scrap silver.

Jane is selling after years at £1628.7 with profit £499.

Bob is selling after years at £2813.3 with profit £1684, with a difference between them of £1185.

If the stack is 15kg, the difference of profit between Bob and Jane is £17775.

 

This is the reason I am trusting in spot price, not in premiums.

I hope my explanation was clear enough for all new stackers. I know, it is difficult to see the real potential of scrap. But from scrap to treasure it is only a little step.😊 When you will see here scrap silver at spot price, do not hesitate and buy quick!😁

Happy stacking, guys, happy stacking! "

Kindest regards,

Stefan

Very informative post! I would be interested how this would compare to buying a silver etf ? esp once insurance/postage/safe deposit box is factored in.

[HerefordBullyun]

2 minutes ago, monkstax said:

Very informative post! I would be interested how this would compare to buying a silver etf ? esp once insurance/postage/safe deposit box is factored in.

Depends on the type of ETF you have. SLV - youd be in the shiote! PSLV 

[stefffana]

1 minute ago, monkstax said:

Very informative post! I would be interested how this would compare to buying a silver etf ? esp once insurance/postage/safe deposit box is factored in.

1. I am an old guy. I don't trust in silver papers.

2. Deposit box it is expensive, indeed, and is good for those who are having a very big quantity, not for small stackers. Even 100-200 kg if I will be able to accumulate, I can manage to keep them without fear.

3. At a vault I can not have access every day or in a crisis situation. Also, every gram you have is recorded.

[Chorlton]

Worth working out the cost and ease of selling. A few gold sovereigns are very easy to sell as well as being VAT and CG exempt on purchase. Potentially there could be quite a lot of effort and expense selling numerous 1oz silver coins to the same value. If the silver 1oz coins are bought new with VAT included it can reduce the potential profit even if silver has risen at the Spot price.

[monkstax]

7 minutes ago, HerefordBullyun said:

Depends on the type of ETF you have. SLV - youd be in the shiote! PSLV 

Tbh I dont really know much about ETF's and how they work.

Can you please elaborate on what you mean? Doesn't it just track the spot price (minus a small fee)?

[monkstax]

4 minutes ago, stefffana said:

1. I am an old guy. I don't trust in silver papers.

2. Deposit box it is expensive, indeed, and is good for those who are having a very big quantity, not for small stackers. Even 100-200 kg if I will be able to accumulate, I can manage to keep them without fear.

3. At a vault I can not have access every day or in a crisis situation. Also, every gram you have is recorded.

Valid points,

I guess everyone has to purchase in a way that suits their risk appetite and preferences

[iacabu]

There are many more experienced members here to give you advice but I'll throw my two pence in.

I'm relatively new to precious metals and I initially started out with a view to buying more silver. This was due to thinking there's more potential for a rise in value. I have since changed my view on things and feel gold is a much better proposition, both short and long term. This is mostly down to the VAT we pay on silver, although premiums are much higher too. 

Don't get me wrong, I love silver and will continue to buy the odd bit, but I'd rather spend £50(ish) on a gram of gold than 2oz of silver. 

Having said that, my recent purchases of silver have been silver shot because I do a bit of pouring. 

20oz of silver is a great start, but if it were my money, the next 80oz you want to reach your target would be going on 5 or 6 sovs instead. 

This is despite me not particularly liking the colour of sovereigns, however, for the reasons mentioned previously, they're the best bet. 

I've tried (and still am) selling a number of odd coins and can have real difficulty doing so.  

[HerefordBullyun]

32 minutes ago, monkstax said:

Tbh I dont really know much about ETF's and how they work.

Can you please elaborate on what you mean? Doesn't it just track the spot price (minus a small fee)?

They do indeed track the spot price, however the difference between PSLV and SLV are both paper certificates to say you own silver. BUT there is a difference. SLV ETF is supposed to be backed by silver but in reality is isn't, given a financial crash you in theory have the right to cash your certs in for physical silver, but it wouldn't be honoured because there are 500 certificates of paper for every physical oz in the world. Its part of the futures markets that were created in the 80's with thatcher and reagan  era. All commodities including silver became futures or just paper markets, this is so traders on the COMEX (commodities exchange) can manipulate and control prices. Shorting silver (ie betting on the price to go down) Is very profitable for banks.

PSLV is a finite ETF (paper cert) Because it could be honoured as every oz is backed by physical silver. You can also buy ETFs of silver miners also, a mix of stocks from select miners.

The silver market has been rigged for years as has gold too.   

EDITED to add look at the videos in my signature block. education is key!

Edited April 9, 2022 by HerefordBullyun

[monkstax]

Thanks for the explanation,

I just checked the PSLV website, you need a minimum of 10,000 oz to redeem to physical, A bit outside my budget  !

9 minutes ago, HerefordBullyun said:

They do indeed track the spot price, however the difference between PSLV and SLV are both paper certificates to say you own silver. BUT there is a difference. SLV ETF is supposed to be backed by silver but in reality is isn't, given a financial crash you in theory have the right to cash your certs in for physical silver, but it wouldn't be honoured because there are 500 certificates of paper for every physical oz in the world. Its part of the futures markets that were created in the 80's with thatcher and reagan  era. All commodities including silver became futures or just paper markets, this is so traders on the COMEX (commodities exchange) can manipulate and control prices. Shorting silver (ie betting on the price to go down) Is very profitable for banks.

PSLV is a finite ETF (paper cert) Because it could be honoured as every oz is backed by physical silver. You can also buy ETFs of silver miners also, a mix of stocks from select miners.

The silver market has been rigged for years as has gold too.   

EDITED to add look at the videos in my signature block. education is key!

 

[HerefordBullyun]

2 minutes ago, monkstax said:

Thanks for the explanation,

I just checked the PSLV website, you need a minimum of 10,000 oz to redeem to physical, A bit outside my budget  !

 

but least it would be hounoured, but minions like us are best to go for miners anyway or stack physical!

[monkstax]

2 minutes ago, HerefordBullyun said:

but least it would be hounoured, but minions like us are best to go for miners anyway or stack physical!

yep, Numbers on a screen will never compare to holding real bullion in ones hand

[FourNinesFine]

1 hour ago, Iacabu said:

20oz of silver is a great start, but if it were my money, the next 80oz you want to reach your target would be going on 5 or 6 sovs instead. 

This is despite me not particularly liking the colour of sovereigns, however, for the reasons mentioned previously, they're the best bet. 

I've tried (and still am) selling a number of odd coins and can have real difficulty doing so.  

Thanks @Iacabu. I think just about everyone here is more experienced than I am, so I welcome the input.

I have to say that in just the last week, I've learned so much. My 'sensible' head is prevailing and all signs point to gold if it's truly a 'value storage' / wealth preservation outome I'm looking for. To back that up, I purchased my first gold this very day - 2x 2022 sovereigns.

But (and I say this in whispered tones because I can feel the shaking heads, rolling eyes, and tut-tuts from the pros), I know that I'll still be picking up some silver 1oz coins as I go. Why? Just because I really like them. And I think, as strange as it sounds, I'll need that visceral and visual 'hit' in order to sustain my ambitions over the long term.

So yes, in 20 years or so I'll be able to look back and say, if I'd JUST done gold I could have amassed 'x' oz more - but a pursuit like this has to be enjoyable too (for me at least) and if it was purely pragmatic and practical, I'd probably lose momentum.

Again, I appreciate how proposterous that sounds. But I'm a kook!

So... my new strategy is something along the lines of... investment funds buy sovereigns and loose change buys silver Maples. That sounds reasonable for now. 

Cheers my friend.

FNF.

[goldsilverdash]

I would say that diversity is your friend. Don't go for only one thing, mix it up a bit. Personally, I aim to have various sizes of gold coins (mainly 1/2 and 1/4) from different mints; different parts of the world, and different years, some older some newer. Etc.

Also, a good balance between gold and silver. However, right now I don't buy silver because the premiums are just too high. And if I had to pay full VAT on top of that I would not even consider it. I hope to buy silver again sometime when the premiums go down.

Edited April 10, 2022 by goldsilverdash

[Paul]

On 08/04/2022 at 12:19, MonkeysUncle said:

To liquidate a 1oz coin you need to find someone with £1,500 or so at the moment.

To liquidate a Sov or Sovs you need to find a man or men with £360 or so. 

Sovs are easier to shift basically

^^^^^^^^^ what he said ^^^^^^^^^

[Jvw]

6 minutes ago, Paul said:

^^^^^^^^^ what he said ^^^^^^^^^

What @Paulsaid! (and all others in this thread)  

[TommyTwoShots]

11 hours ago, Foster88 said:

Very good explanation @stefffana 

Scrap .925 old cutlery is a good place to start for those looking for low premium silver.

 

for sure I buy scrap 925 then melt it into bars. Works out at about 15 pound per 100g.

[Monsmoy]

It is at this point, 

"yes, in 20 years or so I'll be able to look back and say, if I'd JUST done gold I could have amassed 'x' oz more - but a pursuit like this has to be enjoyable too (for me at least) and if it was purely pragmatic and practical, I'd probably lose momentum."

you may start second questioning the stacking of Sovs or Brits and think, if I am keeping the gold for 20years, would a more rare or well graded coin give a better roi?