Any downside to bars?

[ochotona]

Well, I could not push together all of the after-tax cash I needed to finish out my gold acquisition before the price got away from me. I stopped buying at $1210.

What do you think if I were to a buy gold ETF in my IRA account, then exchange the ETF in the future for physical gold after I get more cash? I would be locking in current gold prices. That would be good if things got weird this year somewhere in the world. On the other hand, I'm a momentum guy, and gold has barely positive 1-yr momentum now, and it's below 200 day MA, so those are mixed trend signals... at least I could quickly sell an ETF in an IRA if the price were to crash, but then I could go back to buying bars, coins.

[dualstow]

I wonder about doing that, too, especially if I won't be in town to take delivery of coins.
Although I have no regrets about buying gold, I'm at 26% from buying so much. I could certainly rationalize buying more by making the pp larger & vp smaller, but I'm not feeling it.

What does your allocation tell you?

[ochotona]

I wonder about doing that, too, especially if I won't be in town to take delivery of coins.
Although I have no regrets about buying gold, I'm at 26% from buying so much. I could certainly rationalize buying more by making the pp larger & vp smaller, but I'm not feeling it.

What does your allocation tell you?

I need to wait for end-of-month signal. But, based on what happened to gold today, it might be "out" for March... it's kind of on a razor's edge. All the pundits seem to say the same... "gold can't make up it's mind". Really, it's having problems that way.

[dualstow]

All I can say is, I'd go crazy worrying about that stuff. I know I'm talking to a momentum guy, but I can't even be troubled to do that with stocks. With gold, I just tell myself that I can always will the coins to someone and maybe gold will come back a century from now.

[ochotona]

I'm going to sit and wait and see what happens. Ready to pick up the phone and buy at $1200.

[steve]

I like bars and coins and have both, I do not see much of a downside. You can keep them in a safe deposit box and get insurance. If you get bars from a reputable dealer it should not be a problem.

[ochotona]

The price action today is nutty! I'm going to place limit orders so I don't miss a spike downward

[thisisallen]

Limit order at 1200? That's a big drop.

[ochotona]

It was at 1260, then 1235. 1200 not outrageous. It was 1200 recently. This asset is so volatile...

[thisisallen]

@ochotona. I just noticed your post count is "1200." Hope that will be a good omen for you. If it goes to 1200 I would also be a buyer.

[dualstow]

It was at 1260, then 1235. 1200 not outrageous. It was 1200 recently. This asset is so volatile...

But mostly just in dollars, right? Not in most currencies.

[ochotona]

US Dollars. Not Renmenbi.

I'm waiting and seeing what happens at the FOMC meeting mid-March. If they do raise interest rates, and the Dollar moves up, gold could move down, then it could a good time to buy. If they don't raise rates, I just need to wait until they have the guts to do so - the next meeting, May 2-3.

The thing about these Texas Precious Metals limit orders; they trade 24/7, so if you get spike downward overseas while we sleep, your trade could execute. I'm hoping for a happy $1200 accident somewhere.

[thisisallen]

Jobs report comes on Fri. If it is good then the rate increase is more certain.

[mathjak107]

things are likely priced in at this point . it was one swift reprice , that is for sure . long term treasury bonds fell 2% . that is like a 400 point drop in the dow .

after the increase things will recover in gold and treasury bonds once again .

historically short term increases in rates has been good for bonds .. only 1994 has been the exception . bonds ultimately like the slowing effect of rising short term rates . as long as inflation is not a problem . .

as jack bowers said , at this point the positives are:

" the dollar’s strength. When the greenback is rising, it tends to attract foreign capital, boosting the supply of money available to lend. The second is corporate tax reform. While it’s hard to predict how imports and exports will be treated, the odds that it will become easier and cheaper for firms to repatriate overseas capital are high. And if that happens, the issuance of corporate debt could slump, reducing borrowing demand "

[ochotona]

Then when I have my essential "stash o' bars" put away at Chappell Hill Bank, I'm gonna fuhgedaboudit. Just like I don't wonder day-to-day about the price of my house, which I've been in for 24 years.

[mathjak107]

of course the difference is you are consuming the house by living in it . whether it is worth 100k or 500k is irrelevant as long as you consume it .

if you were concerned about the house being your piggy bank and living off it now by selling it you would feel different . while you live in it the house is doing it's job by giving you a place to live .

on the other hand in order for our investments to do their job they need to compound and grow

[ochotona]

of course the difference is you are consuming the house by living in it . whether it is worth 100k or 500k is irrelevant as long as you consume it .

if you were concerned about the house being your piggy bank and living off it now by selling it you would feel different . while you live in it the house is doing it's job by giving you a place to live .

on the other hand in order for our investments to do their job they need to compound and grow

My health insurance, long-term care insurance, term life insurance, car insurance premia do not compound and grow, and yet I pay them dutifully.

I am content to idle up to 10% of my portfolio in an insurance asset which, in the average case over the span of my life, will stay at par with inflation (10% but not 25%).

I think of gold as insurance with "return of premium" feature at the end, but how much is returned isn't quite clear to us now. And like life insurance with a feature to take out cash value, if you bought at $1800 and it's now $1200, and you lose the retail mark-up also, well, you don't get so much cash value back today, so it may or not be good to take out the cash now - so don't. Wait for better times!

[mathjak107]

expenses are not assets .

gold goes up in value and over time and just about tracks inflation so while you call it insurance it really is an asset not an expense . it is like TIPS in a way . it is also a competitor to the dollar . holding dollars is an asset . holding gold is another form of currency so it is not like your auto insurance at all .

you have to differentiate between what is a consumption item and what is an asset .

we have some fine art pieces but they are a consumption item . i have no interest in selling them . if i was an art investor then i would consider them an asset since i would generate profits or losses with it . but since i am using it as i would my home for now they are consumption items .

a home represents your cost of housing . it may be cheaper for you than renting but it is your cost of housing while you consume it .

[ochotona]

expenses are not assets .

gold goes up in value and over time and just about tracks inflation so while you call it insurance it really is an asset not an expense . it is like TIPS in a way . it is also a competitor to the dollar . holding dollars is an asset . holding gold is another form of currency so it is not like your auto insurance at all .

you have to differentiate between what is a consumption item and what is an asset .

we have some fine art pieces but they are a consumption item . i have no interest in selling them . if i was an art investor then i would consider them an asset since i would generate profits or losses with it . but since i am using it as i would my home for now they are consumption items .

a home represents your cost of housing . it may be cheaper for you than renting but it is your cost of housing while you consume it .

Gold is an asset, but it provides an insurance service, in the same way that your house is an asset but provides a housing service.

[mathjak107]

except you can't sell off a piece of your living room to buy groceries like you can your gold or sell the bedroom off to rebalance . . .

long term treasury bonds can be insurance too if you want to look at the protection side of things . my gold since i bought it after it fell recently is up more than my other assets .

you do not consume gold . you are free to trade it for anything you like . you can't do that consuming your house . it is only when you are willing to give up ownership or partial ownership that the house can move off the consumption side if you are living in it using it . .

[ochotona]

except you can't sell off a piece of your living room to buy groceries like you can your gold or sell the bedroom off to rebalance . . .

long term treasury bonds can be insurance too if you want to look at the protection side of things . my gold since i bought it after it fell recently is up more than my other assets .

you do not consume gold . you are free to trade it for anything you like . you can't do that consuming your house . it is only when you are willing to give up ownership or partial ownership that the house can move off the consumption side if you are living in it using it . .

I guess you never heard about AirBNB!

[mathjak107]

then you are not consuming it totally . you made it a part time investment property . not apples to apples . you can take in a room mate too for that matter and cost share . but in any case you are turning it in to a business property .
by the way air bnb is banned here in nyc .

like me renting out my paintings .

if you rented out your house on air bnb you would be concerned with the value , unlike what you said about not caring . if you were renting it you would need to know what you can charge for it .

the whole discussion was because you said in 24 years you did not care what the value was and my answer was that was because it was irrelevant if you consume it .

but when you are not consuming it you care very much what it can sell or rent for ..

[dualstow]

@ochotona. I just noticed your post count is "1200." Hope that will be a good omen for you. If it goes to 1200 I would also be a buyer.

Ha!
1200 is also one of those nice numbers that gets me trying to calculate how many gold 1oz coins my house cost, and how many it would cost to buy it today. I like to do those calculations when I'm out walking.

I guess ochotona can start thinking in terms of bars.

Some more blathering:

Lately, I have the urge to unload all my taxable account's gold ETFs and immediately replace them with coins.
I can't really make use of tax loss harvesting, or I suppose I'd do it now.
I'm sure there's some reason why this swap is weird or stupid, but I think I want coins in taxable and ETFs in my Roth.
Maybe someday, this Australian storage could be more appealing but for now, I just think that if anything happens to me, my wife or parents can just go to the bank and retrieve my coins. When I'm twice the age I am now, I'll probably have dementia, and I doubt my wife will want to chase down foreign-held accounts. It's a pain to just try to get her to invest!

[sophie]

Lately, I have the urge to unload all my taxable account's gold ETFs and immediately replace them with coins.
I can't really make use of tax loss harvesting, or I suppose I'd do it now.
I'm sure there's some reason why this swap is weird or stupid, but I think I want coins in taxable and ETFs in my Roth.

Yup, that's what I did a few years back. Coins are less complicated than taxable ETFs and a lot more enjoyable. I don't trust myself with bars...they are a lot less durable and easily damaged than coins. I decided there's a limit to how many coins I'm willing to keep though, and that's when I started on the Perth Mint adventure.

I have ETFs in my Roth at Fidelity too, and debating swapping them for unallocated gold coins. Have you looked into that? It's only slightly more expensive than an ETF. I'm not sure it's really safer than an ETF, but it seems like it should be.

[mathjak107]

i think if we have to start worrying here about the safety of gold in an etf then it is time to concentrate more on collecting guns and bullets than some off shore account you may have zero access to anyway ...