Is Gold still the currency hedge it should be?

Discussion of the Gold portion of the Permanent Portfolio

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Libertarian666
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Re: Is Gold still the currency hedge it should be?

Post by Libertarian666 » Fri Sep 29, 2017 10:42 am

TennPaGa wrote:
MangoMan wrote:
Cortopassi wrote:Pug,

Local dealer also pays above spot, depending on the market demand, e.g. Eagles get a higher premium than Krugerrands.

But I've yet never sold!
But don't you pay this same premium when you buy these coins? I don't see how, between the bid/ask spread and the markup yo can keep a round trip transaction to 1%.
If I have understood things correctly, I think Libertarian666 was saying that he pays a net 1% on the round trip. That is, he pays 3% over spot when he buys, and receives 2% over spot when he sells.
Correct, although of course that spread will vary depending on market conditions and exactly which coin or bar we're talking about.
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Re: Is Gold still the currency hedge it should be?

Post by Libertarian666 » Fri Sep 29, 2017 10:52 am

MangoMan wrote:
Libertarian666 wrote:
MangoMan wrote: But don't you pay this same premium when you buy these coins? I don't see how, between the bid/ask spread and the markup yo can keep a round trip transaction to 1%.
The bid/asked spread IS the markup.

Let me give you an example.

Let's say that gold is at $1000/oz. and the dealer is buying Eagles at $1020 and selling them at $1030.
In that case, the "buy premium" is 2% and the "sell premium" is 3%.
It would cost you $10 (~1%) per coin to buy a coin and sell it back immediately.

Does that help?
Thanks, now I get what you are saying. However, my contention is that in actual practice, those numbers are much further apart.
Not if you have a wholesale account at a major refiner, like FizTrade (https://fiztrade.com/):
"FizTrade™ is powered by Dillon Gage’s leading edge technology that streamlines all aspects of physical metals trading for our clients. The platform caters to wholesale dealers, institutional investors and private wealth clients."

For example, right now with spot at $1284 or so, I could buy random year Krugerrands at 1306.10 and sell them at 1293.10, for a total spread of $13.00, or just about exactly 1%.
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Re: Is Gold still the currency hedge it should be?

Post by Libertarian666 » Fri Sep 29, 2017 12:24 pm

MangoMan wrote:
Libertarian666 wrote:
MangoMan wrote: Thanks, now I get what you are saying. However, my contention is that in actual practice, those numbers are much further apart.
Not if you have a wholesale account at a major refiner, like FizTrade (https://fiztrade.com/):
"FizTrade™ is powered by Dillon Gage’s leading edge technology that streamlines all aspects of physical metals trading for our clients. The platform caters to wholesale dealers, institutional investors and private wealth clients."

For example, right now with spot at $1284 or so, I could buy random year Krugerrands at 1306.10 and sell them at 1293.10, for a total spread of $13.00, or just about exactly 1%.
Okay, this is the answer I was looking for originally.

So lets delve further: Can anyone open an account? Do they store or deliver the gold? If delivered, is there an additional charge? If stored, is there a storage fee? Are there any wrap fees or commissions? 'Private wealth clients' usually are the goal of every commissioned salesman.
Anyone can open an account, but you will need to do a lot of business with them to get this pricing. I don't know the exact amount, but it is probably on the order of 100 ounces (not each transaction, but in total over a reasonably short period of time). They have retail accounts too but I don't know the pricing on those.

As far as I know they don't store gold, but deliver it. However, they are involved with the Texas Bullion Depository project, so storage may be an option at some point.

I've only transacted with them over the counter, but they will ship. They may waive shipping for large orders.

There are no wrap fees or commissions.
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Re: Is Gold still the currency hedge it should be?

Post by Libertarian666 » Fri Sep 29, 2017 12:33 pm

MangoMan wrote:
MangoMan wrote: So lets delve further: Can anyone open an account? Do they store or deliver the gold? If delivered, is there an additional charge? If stored, is there a storage fee? Are there any wrap fees or commissions? 'Private wealth clients' usually are the goal of every commissioned salesman.
After reviewing the fiztrade site, it is not really for retail clients.

So again, I ask how everyone here who wants to can have a round trip cost of 1%, which you implied is possible.
If I implied that everyone can have that, then that was an incorrect implication.

But I don't think I implied that. I said it was possible, and it is, but not for everyone.
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Re: Is Gold still the currency hedge it should be?

Post by vnatale » Sat Apr 25, 2020 8:02 pm

Libertarian666 wrote:
Fri Sep 29, 2017 12:33 pm
MangoMan wrote:
MangoMan wrote: So lets delve further: Can anyone open an account? Do they store or deliver the gold? If delivered, is there an additional charge? If stored, is there a storage fee? Are there any wrap fees or commissions? 'Private wealth clients' usually are the goal of every commissioned salesman.
After reviewing the fiztrade site, it is not really for retail clients.

So again, I ask how everyone here who wants to can have a round trip cost of 1%, which you implied is possible.
If I implied that everyone can have that, then that was an incorrect implication.

But I don't think I implied that. I said it was possible, and it is, but not for everyone.
What is your update on Fiztrade.com? Still not for EVERYONE? If not, who would be able to use it?

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Is Gold still the currency hedge it should be?

Post by Libertarian666 » Sat Apr 25, 2020 8:54 pm

vnatale wrote:
Sat Apr 25, 2020 8:02 pm
Libertarian666 wrote:
Fri Sep 29, 2017 12:33 pm
MangoMan wrote:
MangoMan wrote: So lets delve further: Can anyone open an account? Do they store or deliver the gold? If delivered, is there an additional charge? If stored, is there a storage fee? Are there any wrap fees or commissions? 'Private wealth clients' usually are the goal of every commissioned salesman.
After reviewing the fiztrade site, it is not really for retail clients.

So again, I ask how everyone here who wants to can have a round trip cost of 1%, which you implied is possible.
If I implied that everyone can have that, then that was an incorrect implication.

But I don't think I implied that. I said it was possible, and it is, but not for everyone.
What is your update on Fiztrade.com? Still not for EVERYONE? If not, who would be able to use it?

Vinny
It's for wholesale clients, so unless you are going to do a fair amount of business, as I mentioned above, they probably wouldn't open an account for you.

However, I have found that the US Gold Bureau (www.usgoldbureau.com) has prices pretty close to the Fiztrade prices, and you don't need to do any particular amount of business with them.

Right now no one has good prices, but when (if) things get back to normal, I would probably use them.
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