- Is there any danger that you will disclose anything to the government?
- How do I hold precious metals in my IRA account?
- Which do you suggest to purchase for investment, privately minted bullion rounds or government minted coins? And which would be preferred for use in monetary exchange in case of bankruptcy of the dollar?
- You are suggesting investing in bullion coins. But some of the biggest advertisers of gold and silver on TV, etc., always try to steer me into buying rare coins instead as an investment. Why are they saying that?
- I have a collection of American Eagle proofs from 1986-2009. I am wondering if the value of the "proof" coins will rise with the silver price. For future purchases would you recommend the "proofs" or the regular American Eagles?
- Let's suppose that silver does hit $100 an ounce (or more). What does one do when it comes time to sell? Worthless paper money does not seem to be an answer, so what is the benefit of having bought silver? Just what does one do with it?
- I have questions about the Monthly Savings Plan.
Is there any danger that you will disclose anything to the government?
The short answer is NO, we do not disclose your transactions to the government or anyone else. There are extremely rare circumstances where certain reports could be required, but a reporting obligation is only triggered about once in every ten thousand transactions – and we notify customers in advance. Please visit our Non-Disclosure Policy page for more information.(Back to Top )
How do I hold precious metals in my IRA account?
There is no substitute for holding physical precious metals in your Individual Retirement Account (IRA) rather than holding more risky paper alternatives such as precious metals exchange traded funds or even mining stocks.
On our IRAs page, we show you how to Secure Your Retirement with Physical Precious Metals.(Back to Top )
Which do you suggest to purchase for investment, privately minted bullion rounds or government minted coins? And which would be preferred for use in monetary exchange in case of bankruptcy of the dollar?
Our silver rounds (like other one-ounce rounds in the marketplace) are the exact same weight and purity as the government minted American Silver Eagle. While the Silver Eagle is technically legal tender for a paltry $1, it has no greater intrinsic value than a silver round. That's why we generally recommend people buy silver rounds over Eagles. You pay a higher premium on the Silver Eagle and you won't necessarily recoup that when you sell it in the future. 99.9% pure silver rounds and pre-1965 quarters, dimes, and half dollars (90% silver) are generally the best ways to get the most silver for your money and both are highly common and recognizable forms of silver in the marketplace. Like the American Eagle, both of these less pricey forms of silver would be suitable for making transactions should the dollar fail. If that happens, you can be confident everyone will know all about silver and its various forms!
Premiums on Money Metals Exchange's silver rounds are very low, particularly as you get into higher order sizes. By way of comparison, you can get 500 ounces of our one-ounce rounds for only $1.40 over the spot price of silver. But if you bought the same number of American Eagles, we must charge $2.90 over spot (and others charge a lot more than that)! When you sell silver rounds back, you typically receive the spot price. Although you can generally get a bit more than spot for Eagles, you usually won't recoup as much as you paid in additional premium.
Meanwhile, in a bull market, premiums (as a percentage of value) typically fall. In other words, if the price of silver doubles, it's not likely that whatever premium you paid on purchase will fully double as well. Therefore, buying the forms of silver (and gold) which carry the lowest premiums is a good strategy. One other thing to consider: Buying silver from local coin dealers normally involves higher premiums and often sales taxes as well.(Back to Top )
You are suggesting investing in bullion coins. But some of the biggest advertisers of gold and silver on TV, etc., always try to steer me into buying rare coins instead as an investment. Why are they saying that?
The fact is many coin dealers prefer to steer people into rare (i.e. numismatic) coins because they carry much higher profit margins for the dealers than do bullion coins. The numismatic market is far less liquid, there is usually a gigantic gap between the buy and sell price, condition is a huge factor in the price, and other considerations make it hard for even a knowledgeable person to be a savvy buyer.
Liquidity may be especially limited for little-known, unusual, or exotic coins. Unless the dealer has an immediate need for the coin you purchased, he may be reluctant to repurchase it from you at all. At that point, you would be on your own to track down another buyer.
On the other hand, gold and silver bullion coins, bars, and rounds are highly liquid, easily traded, and priced on a global market around the clock. At any given time, you know what the spot price of gold and silver is, and this is the primary basis for the price of any bullion product (which usually includes only a small premium over the spot price).
Money Metals Exchange has always maintained that it's best to start out with low-premium bullion products. They're the least risky, least subjective, most cost-effective, and most direct way to invest in precious metals.
Meanwhile, you may have heard the argument that you should buy numismatic coins because they would supposedly be exempted from a future confiscation – as collectible gold coins were in 1933. However, we don't give the retail bullion confiscation argument much credence for a variety of reasons that Money Metals Exchange newsletter has addressed at various times, and we would certainly not rely on it as the sole basis to enter into the highly speculative collectibles market.
There are risks in everything, but the risk in buying numismatics from local dealers, at coin shows, or over the Internet on free-wheeling marketplaces such as eBay at "bargain" prices is that you could get sold a coin that has been tampered with or whose grade certification has been forged to make it appear more valuable than it actually is. There is also a risk of counterfeit coins – even if made of actual gold or silver – because the price of the authentic item is often many multiples of the metal value.
Speculating on numismatic coins is somewhat akin to speculating on artwork. Sure, you can make money buying and selling artwork, but it's a specialized field, and if you are thinking of putting serious money into it, you had better make sure you know what you are doing.
All that said, it can be great recreation to dabble in collecting rare coins, particularly if you appreciate the beauty, symbolism, and history of these items.(Back to Top )
I have a collection of American Eagle proofs from 1986-2009. I am wondering if the value of the "proof" coins will rise with the silver price. For future purchases would you recommend the "proofs" or the regular American Eagles?
The proof coins will continue to command a premium over regular silver Eagles. But whether that premium on proof coins increases in proportion to rising silver prices is another question entirely. It may, but more likely it will not.
Some people do have a special affinity for the brilliant luster and high contrast of the proof finish, but over time we suspect this interest will not grow proportionally to those who want lower-cost precious metals. Only you can decide how much you value aesthetic or historic/collectible qualities in coins. But as leading silver expert and friend of Money Metals David Morgan teaches, the surest way to invest in silver is to buy the most ounces you can get for your money.
So if you're just looking to protect your wealth in silver and cash in on rising prices, then don't pay the large premium charged for proof coins. Instead, use your savings to buy additional ounces of low-premium silver.
If silver prices triple from here, will the premiums on proof coins more than triple, as would be needed to outperform mere bullion? We doubt it. Premiums as a percentage of the total coin value tend to fall in a precious metals bull market.
2010 is a perfect example. Premiums for MS70 proof gold American Eagles at prominent national dealers did not even begin to keep pace with the appreciation of the underlying metal. Investors who bought proof coins on January 1st lost ground to bullion investors.
Our mantra: Take note of the "bid/ask" spread. This is the difference between your cost to purchase versus your price to sell today. For proof coins and other numismatics you will find this spread can often be 30%, 40%, or more. Compare that to bullion coins, rounds, or bars, which will generally offer bid/ask spreads of less than 10%.(Back to Top )
Let's suppose that silver does hit $100 an ounce (or more). What does one do when it comes time to sell? Worthless paper money does not seem to be an answer, so what is the benefit of having bought silver? Just what does one do with it?
The particular dollar amount at which you choose to trade out of your silver isn't necessarily important. If you think of silver as a currency, then what matters is what goods, services, and other assets are going to cost in terms of ounces of silver.
We suspect that in the near future silver will become much more valuable not only in terms of depreciating dollars, but also versus foreign currencies, stocks, bonds, houses, and most other assets. In other words, silver's real purchasing power will increase across the board, giving you the ability to convert your silver into any of a number of assets – not just dollars – that will be incredibly cheap in terms of ounces of silver.
Silver is money. When the time comes to exchange some of your silver, you should easily be able to swap it for paper currency. In the event folks are reluctant or unwilling to accept paper currency, precious metals will almost certainly take on a leading role as a medium of exchange.(Back to Top )