Buy gold?. Check. Sell gold? Umm...help?

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fritzroy15's picture
fritzroy15
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Buy gold?. Check. Sell gold? Umm...help?

 Here's my pickle. I live in Romania, and after the revelation brought on by Chris and several others, I decieded to store the little wealth I have (i'm only 22) in gold.

After some digging around, I found a single bank in our entire country who is selling gold at market prices in the form of 5,10,25,50 and so on grams.

Now initially I was very happy about my discovery, since that meant I could put away a constant share of my monthly income and buy gold.

Then I realized I should well ask if when I sold the gold I would be offered the market price. The response was disconcerting. First of all, they told me I need to store my gold in their vault for me to have this option available. The minimum amount required is 500gr. That is far beyond what I can buy now. Second of all, the fee for holding is 0.1% of holding value+ VAT each month. For 500gr of gold that adds up to $20 each month. So that's a no-go for me.

That means I have to take the gold home and keep it, prolly burrying it in my garden right next to our old oak tree [ western'style ]. My concern is, that when push comes to shove, I'll be stuck holding the gold without anyone to sell it too for a fair price.

Currently, our national banc is not buying gold, neither are any private banks [ except the one above in the stated conditions ], and pawnbrokers around here will only give about 60-70% of the value.

The way things are, I'm inclined to think it's by design rather then by accident, to discourage people as much as possible from holding their wealth in assets rather then in debt.

So, basically, I'd really like to hear some takes on I should do. I have enormous respect for this community [ 50% of the reason I took action in the first place ], and I do believe that if I have a chance of getting level-head advice anywhere, this is my best shot.

So thanks for reading and thanks in advance for any suggestions,

Paul

LogansRun's picture
LogansRun
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Joined: Mar 18 2009
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Re: Buy gold?. Check. Sell gold? Umm...help?

There are international dealers everywhere that will ship to you.  You just need to open an account or use a credit card.  The one that some of my Aussie friends use is:  www.apmex.com

Here is their international FAQ's:

http://www.apmex.com/FAQ/Default.aspx#International

Also, you can try the Perth Mint.  

fritzroy15's picture
fritzroy15
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Re: Buy gold?. Check. Sell gold? Umm...help?

My more pressing concern is about selling it once I have bought it. If the natinoal bank isn't buying, and neither are the private banks, if I'm in need of money in the future I'm concerned that I'll be stuck having to chew those coins having nowhere to sell them for currency to buy food :)

Tycer's picture
Tycer
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Re: Buy gold?. Check. Sell gold? Umm...help?

I believe there are other places that will accept your gold as cash if the time comes when you must sell it. I also believe the banks do not want you to own gold and their policies show that. As you add to your stack, I suggest you include a little silver as many of the items you would buy directly with metals might be worth too small an amount of gold to measure. Zimbabwe does all trading in gold and silver.

You are assuming your banks will be solvent when you need to use your metals. I do not think that is a good assumption.

A reason to hold metals is as insurance to a time where paper currency fails. Try to collect several months paper currency to pay rent and food so you will not be forced to sell your metals for less than they are worth before the banks do fail.

Gold is not fail-safe. The political environment in Romania is not my strong suit, but I know at one time all gold had to have a government stamp and most gold dealers got fined and many had their privileges suspended. Be careful and patient.

If I ever have to sell my metals in a harsh political environment, I will be very quiet and careful to determine the safest way to get the most for my metal. No one near me knows I have any metals and most of my metal is not at my home and never in any bank.

green_achers's picture
green_achers
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Re: Buy gold?. Check. Sell gold? Umm...help?

Whenever you buy or sell gold or silver, especially from a bricks-and-mortar establishment, you can expect to pay more than spot when you buy and receive less than spot when you sell.  If that doesn't make sense to you, just think about it for a minute or two.  There's an exception, I'll discuss later, but the spot price is more like what the business pays, so you have to expect they're going to charge you more.  They have to cover overhead, after all.  Even if they bought it cheaper at an earlier point in time, they are going to have to replace inventory.  They basically survive on commissions.

So, if you're buying with the assumption that the value of the metal wrt cash is going to rise, you just accept the commission as a part of the price of doing business.  Same as buying stock through a broker, but usually cheaper.

Here in the US, if you are going to buy with cash, the best places are coin shops.  I don't know if you have them over there.  They mostly do business with numismatic coins, but usually also deal in bullion coins, rounds, and bars.  You can expect to pay maybe 10% over spot and take that much loss when you sell.  Pawn shops are not going to be as good of a bargain, and the percentages you gave are probably typical here, too.  Those types of businesses and the "we buy gold" outfits are basically trading on people's ignorance.

For online/phone buying, I have had very satisfactory results from a company called California Numismatic Investments.  They have a very user-friendly website, but I usually look up the prices online and then do the transaction over the phone.  I have bought and sold through them.  I was a little nervous at first, as it requires you send the money in the form of a cashier's check before they send the goods, and in reverse, you send the coins before they issue you a check.  But they are a brick-and-mortar business in SoCal, and, well, I guess I was lucky.

So here's the exception to the rule I mentioned:  right now, they and a number of other places like Kitco are actually paying a premium for gold, silver and other bullion.  They price according to market demand so are right now having to pay more than spot to get people to sell.  The downside is that they are able to charge a higher premium for sales, though online sellers will still generally have lower markups than coin dealers.

Now, I have only sold coins to them that I also bought from them.  They advertise their coins as uncirculated condition, and I could be sure that mine were, since I never took them out of the packaging they sold it to me in, other than to confirm I got what I paid for.  I suppose it's possible you could run into trouble if you had coin shop coins that they might look at and decide weren't high enough quality.

Given all of that, you might want to think what it means for them to be paying a premium right now.  I think everyone ought to have a small nest egg in case things turn really bad, so if you have none, by all means put a small portion of your income into some coins.  But in general, if you're talking about investment, I think this is getting really close to a sell market, rather than a time to be buying.

Edited to add:  Don't think I'm saying you can expect a premium when you sell.  You may indeed need to pay a premium, if it has turned into a buyer's market.  And don't think I'm endorsing CNI over anyone else.  I've heard Kitco is good, but they only sell in pretty large quantities.  CNI just happens to be the outfit I've done business with.  I don't even know if they'll do international trades.

earthwise's picture
earthwise
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Re: Buy gold?. Check. Sell gold? Umm...help?
green_achers wrote:

For online/phone buying, I have had very satisfactory results from a company called California Numismatic Investments.  They have a very user-friendly website, but I usually look up the prices online and then do the transaction over the phone.  I have bought and sold through them.  I was a little nervous at first, as it requires you send the money in the form of a cashier's check before they send the goods, and in reverse, you send the coins before they issue you a check.  But they are a brick-and-mortar business in SoCal, and, well, I guess I was lucky.

I also used California Numismatic Investments as they were listed here at CM.com on the Take Action tab/ buying gold and silver. They were more competitive on their premiums and their service was good. Ultimately, what really counts is that you get the goods because I also was nervous about sending a large chunk of cash out and waiting for gold to come in the mail. Just a little bit of a nail-biter the first time. But it came and I'm happy. I also have referred others to them with the same results.

fritzroy15's picture
fritzroy15
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Joined: Dec 4 2008
Posts: 14
Re: Buy gold?. Check. Sell gold? Umm...help?

That might well do for people living in the USA, but since Ro. has just joined the E.U, most european gold firms don't even ship here, let alone US firms. Same goes for buying, I don't think you can sell them online. That's why I'm concerned. I'm worried that when push comes to shove I'll just be stuck holding gold and not being able to do anything with it.

 

green_achers's picture
green_achers
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Posts: 205
Re: Buy gold?. Check. Sell gold? Umm...help?

Another thing.  The only reason that well-known bullion coins like Eagles or Maple Leafs have a value anywhere near spot is that they are widely recognized as being the real thing.  I assume there's something equivalent in Europe.  Any other gold usually has to be melted down and re-assayed, so places like pawn shops and even coin dealers are going to pay a lot less than spot.  A coin dealer in Cal showed me a bag full of small diamonds he had retreived from wedding and engagement rings he had been sold.  Every one of them had to be melted down.  There isn't a market for used jewelry, especially wedding rings (bad luck.)

That being said, if you know what you're getting and find a good deal on "scrap" PMs, that might be the easiest form to cash out of in hard times.

Finally, if the markets and regulations aren't good for gold where you are, you might have to think of other things that would hold wealth.  What forms of silver are available?  In the USA, we had silver coins before 1964 and they are still widely recognized as having value and would be a real good medium of exchange.  Also, don't even think about PMs if you haven't already put some resources into other basic emergency/survival basics.

SailAway's picture
SailAway
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Posts: 404
Re: Buy gold?. Check. Sell gold? Umm...help?

Have you considered bullionvault.com or goldmoney.com ? Transaction fees are low, you can buy small amounts and they take care of storing your metals.

 

ashrat's picture
ashrat
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Posts: 11
Re: Buy gold?. Check. Sell gold? Umm...help?

I like your train of thought here.  If gold might be a problem (buying and selling), try to decide what people will be wanting when the time comes.  Tobacco, booze, lighters, matches, fuel stabilizers, fule filters, water filters, ammo.  There will be many things that are available right now that are storable and will be worth much more than your investment at a later date.  None, or very few would be as easy to store as an ounce of gold.  Choose wisely and you may be the "go to" guy for the entire area.  I know many people that don't think they can survive without alcohol, tobacco or coffee.  I know there will be many other items that aren't essentials but people will pay to get.  Start planning, start doing, GET READY!

Travlin's picture
Travlin
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Posts: 1322
Re: Buy gold?. Check. Sell gold? Umm...help?

Ferfal, who lived through the crash in Argentina, recommends 14 karat jewelry, such as a gold chain.  You can cut off a couple of links at a time and sell or trade them in the black market.  Here is his web site with lots of good tips.  http://ferfal.blogspot.com/

Travlin

green_achers's picture
green_achers
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Joined: Jan 3 2009
Posts: 205
Re: Buy gold?. Check. Sell gold? Umm...help?

The problem with jewelry is that most of the time, you're going to be buying retail and selling wholesale.  And the markup is huge.  That's why I said "if you know what you're getting and find a good deal."  Perhaps you can offer someone a better deal than they'd get at a pawn shop.

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