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JBstacker3181

Fractional gold

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Hello all I just wanted to get some other opinions on a topic that has been on my mind lately. I am manly a stacker of silver but I like to keep a ratio off 100 oz silver to 1 oz gold. Being that as it may be I am not rich and the only way for me to do this is by collecting fractional gold. So my question to you all is this... do you think that this is a good idea and a good ratio? And do you think in the long run will this be helpful or hurtful when it comes time to sell? Thank you for your feedback!!

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Personal preference prevails I think, I’m very new to PM’s, others here will be far wiser than me.

My opinion- it all depends on your long and short term strategy, what you like to buy, PM prices the prevailing market conditions- I could go on and on of obvious variables and it still wouldn’t account for your personal circumstances. 

My strategy has changed dramatically over the short time I have been buying, I believe it’s an evolving process reactive to your experience personally, what you learn from others and your attitude to risk.  When I started up, I didn’t consider purchasing Gold at all, then I swapped out Silver for gold when Gold price was low, then I got into collectible Gold...now I like to buy in the favour of Gold, but recently due to high gold prices, I’m buying Silver again-confused? Yes it’s a conundrum.

I think, if your building a portfolio of bullion Gold and Silver- and given this is a Silver Forum and your interest likely started due to being interested in Silver, a nice ratio of gold:Silver would be in monetary terms, 70:30 in favour of Silver.

But please, my comments here are NOT investment advice, like I said I am very new to PM’s and only came to them in light of losing a fortune on Stocks - despite the prevailing Bull market at the time- so what do I know! 

Edited by richatthecroft

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The problem most of us face in buying fractional gold is 99% of the time the higher premiums plus a shipping cost that would usually cover much higher value.
I would consider adding a fractional gold coin or bar to an order that is already covering the shipping cost or hold back and buy a coin that is heavier and lower premium over spot.
As for the gold / silver mix that's a personal choice and there will be opposing advice from fellow stackers but if like me you believe the gold / silver ratio is trading too high, then that naively  suggests silver has more upside potential in the shorter term. Again all depends on how much over the melt value you pay for either metal.

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The ratio aspect is a personal one due to many factors... storage...income...long or short term hold...ect.

Silver I think is a long hold and the fractionals are not a bad buy if that's all you can afford currently.  I buy fractionals when I'm skint... I buy ounces when I'm flush.... I buy silver because I love Ag.

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Check out your local auctions for small amounts of gold - reduced commissions can usually be negotiated for PMs and those places see steady flows of old sovs which have spent years stashed away in the underwear drawers of recently deceased elderly folk. You can pay cash for them too - there's no postage costs, no paper trail and most places will allow you to inspect them by hand at your leisure. Plenty of bargains to be had. Sharp old sovs at scrap price are common.

My personal ratio is about 150:1, way out of balance compared to most folk here but i see far higher percentage gains to be made in silver over the short/mid term which is why I'm so heavily tilted in its favour. 

Edited by EdNug

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1 hour ago, EdNug said:

Check out your local auctions for small amounts of gold - reduced commissions can usually be negotiated for PMs and those places see steady flows of old sovs which have spent years stashed away in the underwear drawers of recently deceased elderly folk. You can pay cash for them too - there's no postage costs, no paper trail and most places will allow you to inspect them by hand at your leisure. Plenty of bargains to be had. Sharp old sovs at scrap price are common.

Time to relocate to the more prosperous parts of the UK with a rapidly ageing population !!

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I don't have much gold but I don't believe paying increased premiums is worth it for fractional gold.  I'd rather put the money aside and buy 1oz at a time.  

My personal ratio of Gold to Silver is roughly 100-1 but I'd like to get it to about 50-1.

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Price is the most important thing, how much of your money do you want allocated to metals, what does that translate into in terms of a ratio, then use that as a tool. I can't see a reason for having a ratio otherwise, what am I missing. 

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Occasionally fractional gold can be picked up at a near price; sometimes for spot plus a few % from HGM or there was a recent deal from Westminster.

IMO its only worth getting when premiums low, but there is some reclamation of those premiums when selling privately.

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19 hours ago, Groundup said:

The ratio aspect is a personal one due to many factors... storage...income...long or short term hold...ect.

Silver I think is a long hold and the fractionals are not a bad buy if that's all you can afford currently.  I buy fractionals when I'm skint... I buy ounces when I'm flush.... I buy silver because I love Ag.

I understand that love!!! I personally believe I'm slightly addicted to ag😝😝

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19 hours ago, EdNug said:

Check out your local auctions for small amounts of gold - reduced commissions can usually be negotiated for PMs and those places see steady flows of old sovs which have spent years stashed away in the underwear drawers of recently deceased elderly folk. You can pay cash for them too - there's no postage costs, no paper trail and most places will allow you to inspect them by hand at your leisure. Plenty of bargains to be had. Sharp old sovs at scrap price are common.

My personal ratio is about 150:1, way out of balance compared to most folk here but i see far higher percentage gains to be made in silver over the short/mid term which is why I'm so heavily tilted in its favour. 

I completely agree with the lean to ag I believe that it has the highest possibility for gains especially with the gold to silver ratio so out of wack. And I'm definitely going to try some of the ways you suggested to get better deals.

Edited by JBstacker3181

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I'm surprised no one came up with this yet explicitly - I think the best way to go with fractional gold is coins that once were actually used as currency and I don't mean numismatic or even seminumismatic ones but some of them you can buy at bullion prices like some sovereigns (even given that they have not been used as currency since WW1, the history helps the sovereigns minted now, I guess) Other examples: https://thesilverforum.com/topic/18479-sovereign-or-quarter-britannia/?do=findComment&comment=224856

Not sure how the US market for these coins is, presumably a bit smaller but principally the same. Not sure about US fractional coins that are comparable, surely there are some.

It all comes down to your stacking goals too, of course. If your focus is on SHTF I would go for 1/10 ounces of Krugerrands or possibly and particularily in North Ameria for American Gold Eagles

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I actually tried to build a case, comparing fractional bullion coins of a quarter ounce (a comparable size), to some trade coins gave this data:

average quarter ounce bullion €39,71 for a gram
20 Mark, Kaiserreich €39,31 for a gram (-1%)
cheapest Sovereigns €37,63 for a gram (-5%)

For comparison the full ounce bullion coin:

average full ounce  bullion €37,58 for a gram

So the 'right' trade coin would be priced very close to a full ouncer, 'wrong' ones near to a quarter ouncer.

Basically it would help to calculate the direct gram price to compare the coins on offer.

 

 

Edited by KevinFlynn
correction

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Lots of great advice.  My reply is just a bit more to read.  Regarding what size to buy and when, someone put it this way and it became the advice I follow: If you can afford to buy fractionals at a crazy premium you can afford to wait for a bargain or a full ounce near spot.  Also came to discover, as important as it is to keep my stack growing, it's equally important to keep track of ALL my purchases in a hand written ledger so I know how much I'm buying and at what price.  It's good to have weight goals  but for me it just feels especially right knowing that I'm making money by saving money... that I bought the best deal possible at the time.  

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18 hours ago, ilovesilverireallydo said:

Personally I love fractional gold. Thankfully I have local contacts so pay 3% premium when they get any which is the same premium for sovs / half sovs

604ED63B-FCE6-4363-80B8-78E2C0AA4C53.jpeg

9DA47EA5-B989-4369-AA84-76ABAA23D4A4.jpeg

AB6E7F6C-B7AF-4C14-848B-4751D1962025.jpeg

Wow man that us one of the most beautiful sights I've ever seen!!! Really want to get a half solvern!!!

Edited by JBstacker3181

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16 hours ago, silenceissilver said:

I'm surprised no one came up with this yet explicitly - I think the best way to go with fractional gold is coins that once were actually used as currency and I don't mean numismatic or even seminumismatic ones but some of them you can buy at bullion prices like some sovereigns (even given that they have not been used as currency since WW1, the history helps the sovereigns minted now, I guess) Other examples: https://thesilverforum.com/topic/18479-sovereign-or-quarter-britannia/?do=findComment&comment=224856

Not sure how the US market for these coins is, presumably a bit smaller but principally the same. Not sure about US fractional coins that are comparable, surely there are some.

It all comes down to your stacking goals too, of course. If your focus is on SHTF I would go for 1/10 ounces of Krugerrands or possibly and particularily in North Ameria for American Gold Eagles

Is it true that gold eagles are only 92% gold? I've been trying to stay away from them and find more .999. Idk something about that just dont sit well with me.

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39 minutes ago, JBstacker3181 said:

Is it true that gold eagles are only 92% gold? I've been trying to stay away from them and find more .999. Idk something about that just dont sit well with me.

Yes that's right, it's effetively 22 karat (same as sovereigns, Krugerrands and some otehr gold coins) main benefit of 22k over 24k coins is that 24k coins are much much softer (you can gouge them with a fingernail) whereas 22k coins are more similar to the ones that used to be circulated, i.e. they are a lot harder wearing. Similar to the difference between 999 silver (also v soft) and sterling silver or coin silver (92.5% and 90% respectively) which are much tougher so can stand up to be being jangled around in people's pockets.

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56 minutes ago, JBstacker3181 said:

Is it true that gold eagles are only 92% gold? I've been trying to stay away from them and find more .999. Idk something about that just dont sit well with me.

They do of course still continue to contain the same fine weight of Gold as a .999(9) Gold Coin- say a newer Britannia, Somalia Elephant, Libertad so on and so forth- your not getting short changed in any way- it’s down to personal preference of design, colour, strike etc.

Here’s an example of the specification of a 1oz Krugerrand and the specification of a newer Britannia- you’ll notice the Krugs overall weight is heavier to account for the alloy it contains but the fine weight remains equal to the Britannia

65BF1394-9688-4D7B-BE77-FEE81AE07E21.png

9198F07D-634D-4F3B-80AB-6A506E9519C6.png

Edited by richatthecroft

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4 hours ago, JBstacker3181 said:

Is it true that gold eagles are only 92% gold? I've been trying to stay away from them and find more .999. Idk something about that just dont sit well with me.

Not sure but as far as I'm aware there are countries, particular in Asia and Arab countries where 22k gold is less liquid or at least less liked (although I'm sure both the Sovereign and the AGE are just a liquid there as anywhere else, in the Middle East the Sovereign was still in circulation in the 50ies which played a roll in continuing minting it - as far as I know - I'm still a beginner myself) there might be some countries with some differences in taxation (e.g. capital gain tax on 22k but not on 24k but even if you lived in such a country, if your budget is small, it would only make a difference during a hyperinflation, if you become nominally rich) but in the US is doesn't make a difference, again, as far as I know. I think the Buffalo is 24k but actuallly @Numistacker made a video about pre 1933 US coins, including fractionals: https://www.youtube.com/watch?v=e2mfotoJQ0E I think that's a good starting point if you want to consider traditional, fractional US gold coins. Personally I started stacking by cluelessly popping into a jewellery, asking what gold coins they have for ca 100 Pounds, they gave me a half sovereign, so now I'm stacking sovereigns and silver, so far.

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I would not want to miss alloyed coins, as you can touch them without fear of devaluing them. Historical coins are even better, as they usually already show a little wear.

9999 or 99999 gold is much softer, and could be frowned upon, if they had a visible scratch.

Though, just take what you are most comfortable with. Living in the US, for an alloyed bullion coin you would have the Gold Eagle, and for pure coins there would be the Buffalo (not sure about fractionals here) or the canadian Maple Leaf. All these should be very liquid where you live.

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8 hours ago, PansPurse said:

Yes that's right, it's effetively 22 karat (same as sovereigns, Krugerrands and some otehr gold coins) main benefit of 22k over 24k coins is that 24k coins are much much softer (you can gouge them with a fingernail) whereas 22k coins are more similar to the ones that used to be circulated, i.e. they are a lot harder wearing. Similar to the difference between 999 silver (also v soft) and sterling silver or coin silver (92.5% and 90% respectively) which are much tougher so can stand up to be being jangled around in people's pockets.

Ok that makes complete sense now. I dont want to damage my coins. Even though I put them in capsules during transport the could get damaged and just overall the life of the coin is elongated. 

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8 hours ago, richatthecroft said:

They do of course still continue to contain the same fine weight of Gold as a .999(9) Gold Coin- say a newer Britannia, Somalia Elephant, Libertad so on and so forth- your not getting short changed in any way- it’s down to personal preference of design, colour, strike etc.

Here’s an example of the specification of a 1oz Krugerrand and the specification of a newer Britannia- you’ll notice the Krugs overall weight is heavier to account for the alloy it contains but the fine weight remains equal to the Britannia

65BF1394-9688-4D7B-BE77-FEE81AE07E21.png

9198F07D-634D-4F3B-80AB-6A506E9519C6.png

I really appreciate you showing me this. So they make the gold weight heavier to compensate for the difference. I feel a lot better now and collecting a fue more eagles. Thank you.

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