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.
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
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.