As a few of you know here I work in a coin shop for a living. In the past few years we seem to deal more in precious metals than we do with coins. The biggies being Gold and Silver. We buy it. We sell it and generally work on small margins. My boss has been in the business for over 45 years now. Sometimes he wins sometimes he loses. We don't deal in "futures" we deal in physical and it can get real interesting. In any given week I am asked "what do you think gold/silver will do?". My response is "if I knew that I wouldn't be talking to you". Seriously. If I knew what PMs were going to do ten years ago I would have been eating pork and beans from a can with a side of Ramen noodles. The bulk of my money would have been going into PMs. This did not happen. I didn't know. Now we have gold sitting at over $1700 per ounce and silver just over $34. Both have been higher but both have historically been much lower. What does one do? Will gold approach $1900 again? Will silver push $50? Again, I don't know. I listen to the "experts". They come into the shop EVERY day it seems. They are usually buying - correction pretty much ALWAYS buying. You see they have computers and tell me THEY say gold will hit X amount, THEY say silver will hit X amount. My question is always "who are THEY?" Tough question. Don't get me wrong here. I'm not totally dissing these people. At one point I said I'd never buy silver at over $20 per ounce. I did. I bought it at over $30 and, in a fit of insanity, I bought at over $40. The over $40 has hurt me but I still have it. As for gold I have very little. Silver is easier to buy in small increments. I actually DO believe it should command a higher price as well. So I'm rambling a bit here. What are your thoughts?
That is one aspect of your business I don't understand. You operate on small margins but gold buyers are aggressively buying even though the price can fluctuate a great deal from day to day. I like a crap shoot for the seller. Can I sell you my gold today for x dollar/oz then buy it back for less tomorrow if the price drops? As far as PM's go, I used to buy a little gold & little silver every month. I stopped once prices (especially gold) started to go crazy. My fear was buying gold at $1000/oz only to have it drop back to $300/oz overnight. I started buying gold during the Y2K period- and I bought quite a bit, mostly from the same few dealers. Not a visit goes by that they aren't trying to buy it back. It has turned out to be a great investment but I'm leery that the current price levels can be maintained.
I bought what I have very cheap including the little bit of gold at the moment I dont touch it except to buy the odd silver proof or 2 per year at inflated Royal mint prices LOL and they are now limited
I don't think gold makes a good investment. I think it makes a good hedge, against things going very wrong, like if Obama gets re-elected for example, and the dollar collapses.
If I had the money to invest in precious metals it surely wouldn't be silver and gold. The real wealth is going to reside in the rare earth metals which underpin a great percentage of our technology. Neodymium, Lanthanum, Erbium, Dysprosium, Terbium, Praseodymium, Cerium, Europium and Samarium are going to be the real precious metals. In combination with Platinum they are the most important metals in human history. Without them our technology simply cannot continue. This is why I am also a proponent of massive investments in space exploration. The asteroids and the surface of the Moon have more wealth than has ever been produced in human history. However, there is no real drive to exploit those resources. The real reason being that it would completely destroy the economic value derived from the scarcity of the very elements I mentioned above.
