Gold vs Silver

[ChrisSilver]

When I first started buying precious metals I started buying only silver, my reasons were mainly;

• Better Value. on a price chart silver looked like the better deal it had pulled back a far greater amount in percentage terms compared too it's high, (still looks that way today on a chart.)
• Greater potential. I also believe silver has more room to grow further on a percentage bases in the future, and as an investment will out perform gold.
• More for your money. It's nice having a nice size collection, and is much more affordable to build in silver vs gold.
   

I am now considering purchasing more gold instead of silver, and my reasons are;

 

• Premiums are much lower. The metal itself and due to the fact that you pay less shipping cost to receive.
• Selling back to dealers. It's easy to sell large amounts back to a dealer, a handful of gold coins has the same value as a heavy backpack full of silver, so it's easier to carry to the dealer. You also get a price closer to their current selling prices, due to lower premiums and no VAT on gold causing a lower spread.
• Less time to break even. Because of the lower premiums and no VAT, the time needed for spot price to rise enough to break even is lower compared to silver.
• Storage is easier. Can easily store a large value of metal in safe deposit boxes. Storage silver in safe deposit boxes would be expensive. Home storage is also easier.

I still think in percentage terms silver has more potential to be a better investment, however I am now favoring more gold due to the reasons above.

If selling in the secondary market, then obviously investing in semi numismatic silver will produce a far better return than plain bullion silver or gold. The problem with this strategy is that it is not that liquid, would take a while to sell everything to forum members. There is eBay, but eBay have gt really strict these days have have very small limits on the monthly amount of goods you can sell.

I am still going to buy some semi numismatic silver coins each year, but will now try to favour buying more gold over additional silver.

What does everyone else think in regards to Gold vs Silver?
 

[morezone]

It's always good to have some diversity.

 

Based on a spot of £765 on gold and £11.36 on silver.

 

You can pickup circulated sovs for 3% over spot and various uncirculated bars/coins from 3.5 to 7%.  If you bought today and needed to dump tomorrow and spot remained the same, then you would potentially lose 5% or so.

 

Maple are £13.66 at STG which makes them about 20% over spot.  If you had to dump those, you would prob lose around 22%.

 

If spot for both rises 20% then you would almost break even on the silver and make 13% or so on the gold.

 

This is all based on quick liquidity.  You would achieve more selling privately but would take time.  With semi numi you would have to sell privately as the premiums paid can be considerable and spot would need to be at +40% to break even with a dealer.

 

Semi numi silver have a fair bit of potential even if spot doesn't move but it would all need to be sold privately for maximum gains.

 

If spot doesn't move on gold, there is little gain unless you have maybe Pandas, Kangaroos and Lunars.  Even then there may not be much gain.

 

My conclusion is that gold is ideal for quick liquidity and easy storage.  Silver has more potential with semi numi but storage can be a problem.  Basic silver bullin has to be held for the loooooooonnngggg haul.   As long as you have a bit of everything, then you have a good spread.

[ChrisSilver]

A good summery there morezone.

[silversword]

Hard to disagree with any of the OP frankly. My silver is bought for long term so for all its disadvantages, I still think it's worth holding and worth adding to when prices are favourable. Physical size of stack definitely counts for something as well.

If gold continues to drop then I will take more interest in it as the price comes down. For now I would be limited to the odd sovereign once in a while. There really is nothing quite as dispiriting as seeing just how small a piece of metal you get for several hundred pounds.

[motorbikez]

If you are purely a stacker I would stack gold bullion because of the very low buy sell premium/ spread. Silver because of the VAT issue and dealer spread if you want to sell quickly you'll lose 20% + immediately.

Gold you'd probably lose 5%..If funds don't allow you to buy gold bullion you can obviously buy silver but buy it for the long term because if you need funds fast you are stuffed.

 

Numi and semi numi silver is a different story as it is a collectors field and collectors look mainly to the long term and buy and hold coins because they like them

 

As I said on another thread don't put all your eggs in one basket.

 

All IMHO

[Pipers]

Good points made by all above, to me its about diversity, not putting all your eggs in one basket

[ChrisSilver]

Yea I agree Pipers, diversity is good.

Guys in the US can buy silver for $0.49 per ounce over spot, I have regularly seen deals like this on Ampex. Us in the UK & Europe though pay a hefty premium on Silver. Cheapest silver can get is around 19% premium to spot I'd say.

Why stacking semi numismatic coins and selling within the secondary market will be good, I might want to sell a large amount of my stack in the future, it would be depressing selling my high premium semi numi stuff to dealers for a small amount of money.

That's why I have decided that I will try to buy more gold instead of silver bullion (I will still buy some semi numismatic silver, and collect other silver etc). It's not as exciting, but I do think gold bullion has good advantages over silver bullion here in the UK.

[morezone]

You may wish to buy some used silver bars. 500g+ can be had for around 10% over spot.

This stuff will be ideal for dumping onto dealers.

I plan to sell most of my silver on the secondary market when the time comes, otherwise I'll be throwing away the premiums I've paid.

There will be a lot of work involved in shifting silver for the maximum gains. Imagine someone stacking £50,000 over 10 years. Then when the times comes, they have to shift it. Drop onto a dealer and you get spot so they will loose whatever premiums you've paid (20-30% on basic bullion). Sell in secondary market and you will be there for some time. You may have invested £50k but it may be worth significantly more and moving qty is difficult.

Our premiums are far too high compared to the USA.

[Danny-boy]

There will be a lot of work involved in shifting silver for the maximum gains. Imagine someone stacking £50,000 over 10 years. Then when the times comes, they have to shift it. Drop onto a dealer and you get spot so they will loose whatever premiums you've paid (20-30% on basic bullion). Sell in secondary market and you will be there for some time. You may have invested £50k but it may be worth significantly more and moving qty is difficult.

Agree entirely.

My plan is to sell 1 or 2 ounces per week to subsidise retirement money at that time. Private sales via eBay, forums and whatever other avenues have opened over the next 30 years.

This should bring good returns and not be a huge job all at the same time.

[Pete]

Assuming you are selling coins at a time when spot is the same as when purchased.

If selling a sovereign you are transacting around £190

You will possibly get back in fiat what you paid selling privately.

To a dealer you are likely to loose on average 6%.

With silver however you can sell a common 1 ounce coin for more than you paid for it assuming you purchased VAT free or from STG for example. You are also selling effectively fractional units as you can sell up to about 12 ounces to equate to a full sovereign.

Agreed, selling to a dealer is bad for us but selling privately, having purchased smartly is not bad at all.

Trickle selling on the Bay with the 1click to sell another is quick and easy and what's the problem drip selling over 10 years ?

Stack both but don't fall out of love with silver.

[Danny-boy]

I think there are advantages to both gold and silver, and it's more about what floats your boat.

At the moment I am a collector, but there are only so many sets I want to complete. I'm hoping that once I'm done, I will then begin on low premium VAT free silver bars. I'd then try my hand at the GSR swap game to attain some gold - possibly to swap back to silver if the GSR is favourable, and keep some gold too.

There is no right or wrong way of playing the PM game, the most important thing is that all of us here are playing it differently, but we are playing.

[ChrisSilver]

Dan, where can you get VAT free silver bars from?