Daily Archives: June 23, 2010

Purchase and Storage of Precious Metals (by Marketsniper)

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Due to the recent "increase" in the "price" of gold and silver, I have been receiving numerous questions about them of a practical nature. Where to buy, in what form to buy, how to store, etc

What To Buy

This will be an individual decision. Questions you will need to answer are: 1) Why am I buying precious metals and taking delivery of them and 2) how long will I be keeping them?

IF you're buying the metals as a trading vehicle, do NOT buy the actual physical metals. Trade them in paper form. Plenty of ETFs available to do that. IF you are buying the precious metals as an alternative and a hedge against paper money here are my suggestions. IF you have no precious metals at all, start with silver. In silver, start with sovereign silver coinage. For the United States, that is pre-1965 dimes, quarters and half dollars. These are normally sold by dealers in $1,000 FACE bags and often lesser amounts (1/2, 1/4 bags and even $100 face). For the full face bag, there should be 726 oz of actual silver melt. However, due to worn, circulated coins, the accepted amount is 715 ounces of actual silver per $1,000 face bag. For an actual conversion on a per coin basis, this is very handy for actual melt value.

http://www.coinflation.com/silver_coin_values.html

As with any market, there is the bid price and the offered price. The spread on actual physical metals can be quite wide. What you want to buy is the cheapest metal in readily recognizable form. With silver, you have sovereign coinage. When dealing with bars, whether it be gold or silver, always purchase hallmark bars! These are bars fabricated by well known mints and authority such as Credit Swiss, Swiss Pamp, Johnson-Mathey, Englehardt, etc.

When it comes to gold, also go with the cheapest gold you can buy in readily recognizable form. Do NOT buy into the .9999 fine gold game. The Canadian Gold maple Leaf coin at .9999 fine gold has exactly the same amount of gold as is in the South African Krugerrand. The SA Krugerrand is a bit larger due to a small amount of base metals to make the coin harder.  A word about the Austrian and the Hungarian Corona. They are all dated 1915 and are authorized re-strikes. They actually contain .9802 ounce of gold and can be the best buy due to the least markup over melt on a percentage basis. I have found that the SA Krugerrand is also usually a good buy. The premium charged for the US and Canadian gold coins tend to be higher.

Where To Buy

There really is no substitute for walking into a bullion/coin dealer with cash and walking out with your precious metals. A number of things to keep in mind. Each state is different as to sales tax on your precious metal purchases. In California, for example, the amount was recently raised from $1,000 to $1,500 for sales tax exemption so check with the state where you live on this point. Also, the Patriot Act mandates that the dealer get a piece of paper from you identifying yourself.  I have yet to be asked for actual identification. Do the right thing.

For those where this is impractical due to location, I have had a very long and good working relationship with California Numismatics http://www.golddealer.com/ and Tulving http://www.tulving.com/goldbull.html Both of these firms I have and continue to trust.  Even if the cost is a bit higher at your local dealer, there is nothing more reassuring than to plunk down the cash and walk out the door with your metals purchase

Storage Suggestions

The optimum situation is to be a citizen of one country, live in a second country and keep most of you bullion in a third country. Since for most people this is not really possible, your are faced then with the safe keeping of your precious metals. I highly suggest that you do not keep them in a bank safety deposit box. The bank may be closed when you need to actually have the metals in your possession and there may actually be counter claims against safety deposit boxes should your bank go "out of business."

This last may be just a nasty rumor but the first reason should be enough to keep your metals outside the bank! For the average individual, you might take a look into some ideas for safe storage ideas around your home or apartment. A false electrical outlet box. Who but you would know? How about a false can of shaving cream? For those with a bit more metals than can be stored safely by such methods, short of becoming a midnight gardener and burying it in your back yard, look into private vault storage.

Hopefully, this has been of some help for those wishing to at least partially hedge their downside risks in very uncertain times.

The Latest on the WAG

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Be sure to click on the image below to view it in all its Cohen-esque glory…..

0623-wag

Full disclosure: I truncated the data from May 25 to June 8, simply because I think it is noise in the graph; the prices didn't go above or beyond the range, so I felt it would be a cleaner examination of WAG (whose one-month birthday is on Friday) to see it without this range-bound chunk of time.

The market has been unfolding quite beautifully. Ironically – – and the longer you trade, the more you'll see this kind of irony happen – – the "pain" on Monday morning was precisely what the bears needed.

Our friends at Elliott Wave International, in their Short Term Update tonight, conjecture that the /ES will drop a little more before briefly turning around somewhere in the green area that I've marked. After the aforementioned bounce, then the real fun is supposed to begin. I'm inclined to agree with this interpretation.

Regular Slopers know that I scaled back my 210 positions to a mere 120 today, although I'll be on the prowl tonight for new entries, both bullish and bearish. My one and only long position – – a "flier", if there ever was one – – is BP.

I'm taking my parents and some other family members out to dinner to celebrate my mom's 80th birthday, so I'm going to sign off for a while. (Yep, she was born in 1930, the start of the Great Depression, so that probably explains some of my bearish tendencies). I'll see you Slopers later!

103 Short Setups with Stop-Losses (by Ryan)

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Here's my Short-Watch-List for this week. Like a few weeks ago, the
number of stocks that I am closely watching has absolutely blown-up. I originally made this three posts, but figured it would be much more convenient for Slopers to combine them all in one post. There are a
bunch of new names to the list below and it is worth taking the time
to look over the stocks to see if any of them meet your requirements for
a trade. I've also included the current price based on when I created
the chart (yesterday) only so that you could compare how tight/relaxed the
stop-loss is.

Here are the three categories for inclusion on my list…

1) Price and volume pattern is intriguing

2) Stock has been heavily sold-off in the recent days or weeks, but
still remains on the list for a possible short off of a weak rally,
and

3) Stock is one of intrigue to me, such as Goldman Sachs (GS), so I
keep it around in the case that there is a setup that is too good to
pass up.

Most of them though fall under condition one. I've also gone ahead
and highlighted those stocks that are new to the list. The stop-losses
for ALL of the stocks have been updated.

Those stocks highlighted in yellow represent new additions to the watch-list since the last watch-list posting.

 

Checkout Ryan's Blog at SharePlanner.com

Current Positioning

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As I'm typing this, the Fed news ("Hey, banks! The money's still free! Come and get it!") is less than an hour away. I've trimmed way back on my positions, and I've gone from all-short to a more even short/long balance. Currently I have:

+ 103 short positions, all of them small (fewer than half of what I started the day with);

+ 4 large long positions (OIH, RTH, FXE, and – Lord forgive me – BP);

+ Stops updated across the board, with a 79.2% portfolio commitment (down from 140%)

I'm going to simply go through my watch lists now as I await the announcement and its spasms.