I am thinking about slowly buying some physical gold.

How does one keep track of tax basis - receipts tied to coins/bullion’s etc.

Are premium grades ms 70 etc worth it?

Any preferred coins to own?

How does one store it - safe deposit boxes I assume

how does one issue it

Any preferred sourced to buy physical gold?

I am not a gold bug.

Thanks

Mike

It's obvious by your questions that you are not a gold bug.

You keep track the same way you keep track of any capital purchases, receipts, dates, etc.

No, "premium currently minted gold coins" are a semi-scam perpetrated by some coin sellers. They are definitely not worth it for your purposes. Just think of one of the coins as a simple ounce, more or less, of gold and don't pay anything but a slight premium for the minting and the gold content. Once you get in the market, you will often come on "deals" which are lesser known gold coins. Being sure they are real, there is nothing wrong with buying them, hopefully for gold content or less. Because of my connections, I can melt and sell any gold item for 99% of spot gold value on day of melting. It is a good way to get into gold by buying rings, necklaces (which are used as value stores in India, Thailand and many other places in the Orient), etc. Most people cannot do this and the "buyers" that pop up all the time with newspaper ads, when gold prices rise are generally thieves, describing themselves as businessmen.

Going back quite a few years there are a few gold coins that are required to be reported when bought or sold in more than minimal quantities. Among them, because they were all that existed and were popular at the time of the regulation, are Maple Leafs, Krands, and Mexican 1 onzas. Buying or selling these in any quantity of 25 coins or more will trigger a required filing of a 1099B by the buyer/seller. For that reason, I recommend NOT buying those coins except in minimal quantities. Hopefully here is a link that shows the coins and reportable quantities. https://www.jmbullion.com/repo...actions-infographic/

It's not all that well known but I like the Mexican 50 pesos which contain 1.2057 oz pure gold but are minted at 90% gold mixture so weight more than that. It is not a reportable coin. Do not confuse this with the Mex one onza, which is.

Be aware that buying gold coins is a semi-fraud being foisted on the unknowing public every day. It would be a serious financial error to pay much over 1 to 1 1/2% above actual gold value. That's one of the reasons why the Ms-70 coins are a bad deal.

Mike, I've been meaning to PM you about this for a while, but you might consider starting a collection of Indian coins, which are firstly divided into real Indian coins and the British Occupancy of Indian coins. I have very little knowledge of this area of numismatics, but there are people that can help you, mostly in London. It reminds me of the same situation that came up in Chinese coins a few years back and the values have sky rocketed as the Chinese have come into the market. One word of warning, there are SCADS of fake chinese coins out there, and probably the same can be said of Indian coins. If you don't know your stuff, and you obviously can't at this time, find someone who does or you will be a victim. BTW, as I said in here before, I collect certain Mexican coins for the same reason. I would recommend them, but the market is tight, and the Chinese are already crowding the market since they used Mexican 8 reales as their trading currency for over a century. Look for areas in collecting that is not popular. There is already a group accumulating rare Indian coins but one group is not a real problem and helps support the market. BE AWARE THAT COIN COLLECTING IS A VERY SPECIALIZED AREA OF INVESTMENT AND CAN AND USUALLY WILL REQUIRE SERIOUS CAPITAL. If you have any serious interest, PM me and we'll talk further.

Maybe I didn't make it clear, but there is nothing wrong with owning/trading the reportable coins in any quantity, but I would avoid the reportable quantities, which are usually 25 coins or more, currently over 30K worth of coins. I just don't want to be on any lists, IRS' or otherwise.

BTW, Florida is the homeland and source of Many of the gold scams/frauds, Boca Raton in particular. Be very careful of your sources.

For those who are wondering why I neglected to mention US coin collecting the reason is simple, to be a serious player in US coins you should only buy the best and rarest of coins. The money to do that has gotten so big that any amount under $1,000,000 is just not enough to really get into the game. And a million is minimal. I sold most of my US coin collections and used the proceeds to buy my ranch(es) some years ago. There is absolutely nothing wrong with US coin collecting but as an investment vehicle, the bloom is off the rose IMO.

I agree with Gatogoto completely. But if Mike is just looking for an investment, gold or silver is always a good bet. Should we go into a big downturn in the economy, as in a depression, it is good for paying off your debts. One other thing, if you buy in smaller amounts, the government doesn't know your worth.Or anyone else for that matter! I have both silver and gold, in bullion and coins. But that is for"just in case". Be aware,it is addicting!

Thanks for the info Gato.

I have a real stupid question - it’s there a test to determine if the gold is real? If I buy some gold how do I know it is real?

Also any good sources to buy physical gold?

My local pawn/ffl can source me gold. His landlord is a Chinese American guy who keeps swapping this gold for ms70 coins.



Thanks

Mike

The best way it to know what real gold coins look like. I can spot 95% of fakes without any tests. With a few minutes of instruction and training with real coins you should be able to as well.

BUT, the crooks have faked gold coins, gold bars, and, especially silver bars successfully for years. That is one advantage of buying NGC slabbed coins. They guarantee authenticity and back that with their money. PCGS does not do this. Not that this means anything, but all my collectible coins are in NGC slabs.

You should have no problem setting up an account with a gold dealer/smelter. It will require a bit on ingenuity on your part, but can be done, even if you are not in the "business". I know. Don't ask. They can and will sell you at best prices.
While not actively buying now, I receive sales emails all the time that average selling bullion coins about 1 to 2 % above spot. Price changes as spot changes.

I dunno about your local pawn/ffl, could be good, could be bad. If he's not a coin guy, I'd be somewhat worried. Pawn shops have a license to steal, loaning a small percentage of gold value on jewelery and melting or selling it as soon as loan is not paid. I used to buy thousands of dollars worth of gold at 95% spot, being able to sell at 99. But this was at about $400/oz range. I kept the scrap and sold it at about $1800/oz a couple of years back. Worked out well.

To answer your initial question, the only real "in hand" test for gold is an acid test, but for that to work, you have to scratch it deep enough to get through the typical gold plating. For obvious reasons, even legitimate sellers are not fond of having their gold scratced. Also specific gravity can work, but takes some good scales and measuring equipment.

The silver bars that were faked wereusually 100 ouncers drilled and hollowed out, filled with lead, and then sold as 999.99% silver. Very tough to detect. There are, undoubtedly, still some out there. I am not aware of this being done with gold bars, but it surely has been.

I repeat, IMO, the MS-70 buillion coin deal is a semi-scam. The Chinese love this shit and are doing it with Chinese bullion coins. Buy a coin at melt plus, send it to be graded, get a 69 0r 70 out of it and sell it for way over melt. Good deal for sellers, but they are minting them every day, and the market depends on the "greater fool" theory. Stay out and you'll be better off for it, IMO.

If you're over there, you can feel safe, with connections pointing you to the right dealer, buying stamped karat gold in Arabian countries, the penalties for faking a karat stamp are so high, that it is almost never done. I think it has something to do with keeping both hands attached.

At the time Americans were prohibited from owning gold, some had a Canadian holding it for them, outside the country. Apparently, a 45 gallon drum of the stuff ended up going to the dump. Sounds like a myth, but a good one.

Grizz

Very informative stuff Gato.

I will look into Indian coins. Have a cousin's wife who is in the loop.

I have a buddy - weird English physicist - who was married to a really nice Russian doctor. He got into Russian coins and did pretty well - maybe just was long gold from $400 to $1800 thru the coins.

I think gold coins are interesting. My great grand dad when he got really rich in Madagascar a hundred plus years back, bought a massive collection of stamps in Paris. The collection withered away between Madagascar and India and was largely worthless. The stamp expert said it was one of top collections when it was bought. He should have bought and collected gold coins instead. Minimal upkeep.

When I was in London a few years back at the British Mueseum they let me hold a 2300 year old Greek coin that was minted when Alexander the Great was alive and had his face on it. I will post a picture of it.

I want to own some gold just to diversify me. I will hedged it out in gld or futures if I get worried.

I will look at the Mexican coins.

Thanks,

Mike

I have a friend who is a retired jeweler. He once showed me 2 - 5 gallon steel pails full of men's gold wedding rings. I asked him why he invested in men's wedding rings. The answer was that they are relatively homogeneous 18 kt gold since men rarely have their rings sized (ie. cut and brazed with silver). In a shtf situation it is relatively easy to clip off a section of the ring to pay for things. Can't do that with collectable coins or bouillon.

quote:

Can't do that with collectable coins or bouillon.

Of course you can. "Shave and a haircut, six bits" A bit was 1/8 of a Mexican 8 reales, cut into eighths. Any bullion coin can be cut up and weighed for trade. Good advice if someone is really and end of world type, is to keep a few hundred dollars of US silver dimes around.

Little known fact, but Mexican/Spanish coinage was legal tender in the US until the 1850s. Many of the Confederate soldiers were paid in 8 reales. It was a common currency in the most rural areas of Tennessee and other Southern states well past the turn of the 19th century and was often cut into quarters and eighths to make change or pay small bills. I bought a really rare Mexican 8 reales dated 1865(paid over 5k for it) from a lady from Tenn on ebay, that found it in one of her great grandfathers boxes along with other CSA stuff. He undoubtedly was paid the coin when he mustered out. I did my absolute best, including offering fairly large monies, to get the box, but she had chunked it. So goes history.

quote:

When I was in London a few years back at the British Mueseum they let me hold a 2300 year old Greek coin that was minted when Alexander the Great was alive and had his face on it. I will post a picture of it.

Mike:

"Ancients" are an absolutely fascinating area of collecting. An area of which I am largely ignorant, I confess. However, I do own one very rare ancient, a contemporary coin with the likeness of Cleopatra on it. By modern standards, she is not a beauty, let me tell you. There are literally thousands, if not millions, of coins with Alexanders image on them. Understandable if you consider the area he conquered and business (trade) must go on.....

You are going to cut up a USS Central America $20 gold piece to pay for groceries? You just destroyed the collectible part of the coin. Much easier to clip off sections of a ring and no loss of value.

quote:

Originally posted by Gatogordo:

quote:

Can't do that with collectable coins or bouillon.

Of course you can. "Shave and a haircut, six bits" A bit was 1/8 of a Mexican 8 reales, cut into eighths. Any bullion coin can be cut up and weighed for trade. Good advice if someone is really and end of world type, is to keep a few hundred dollars of US silver dimes around.

Little known fact, but Mexican/Spanish coinage was legal tender in the US until the 1850s. Many of the Confederate soldiers were paid in 8 reales. It was a common currency in the most rural areas of Tennessee and other Southern states well past the turn of the 19th century and was often cut into quarters and eighths to make change or pay small bills. I bought a really rare Mexican 8 reales dated 1865(paid over 5k for it) from a lady from Tenn on ebay, that found it in one of her great grandfathers boxes along with other CSA stuff. He undoubtedly was paid the coin when he mustered out. I did my absolute best, including offering fairly large monies, to get the box, but she had chunked it. So goes history.

be aware that gold coins, of all countries, are very often counterfeited and the quality is quite good... its the weight that will be off. be sure you know what the weight is supposed to be for a genuine coin if your buying raw coins.

Otherwise buy only CERTIFIED coins and I would only buy PCGS, or NGC certified gold.

and as others have said... MS-70 coins of current vintage are definitely a rip off..

So, I've done some reading on how to determine the actual weight of gold in a ring, for example.

I see lots of people trying to sell gold rings on Craigslist, etc. Usually they've had it appraised and are asking about 1/4 the appraised value (because we all know that appraised ain't worth shit unless a jeweler is actually trying to sell it to you).

Just for understanding, and I plan to do this with my own old wedding bands at home, what would be the realistic amount of gold in a standard man's wedding band, say 14k? I'm assuming I would calculate the weight and then figure out the value per the current gold price.

I'm guessing that even at 1/4 of appraised value, you'd still be paying higher than gold price for it.

quote:

Just for understanding, and I plan to do this with my own old wedding bands at home, what would be the realistic amount of gold in a standard man's wedding band, say 14k? I'm assuming I would calculate the weight and then figure out the value per the current gold price.

That is way too generic a question to answer without much more detail. I will say this, in general, the stamped karat weight is usually good. I bought and sold hundreds of thousands of dollars worth of gold scrap, mostly relying on "looks" and the stamp. I did well. The most commonly faked gold items I ran into were necklaces, often stamped "Italy" (the major supplier of gold necklace material) and a K value. Usually fairly easy to detect by look alone, but, a scratch test would reveal it in a minute. I keep coming back to "look" but knowing what the "look" of real gold or real coins is extremely important and will allow a knowledgeable person to tell what he's looking at is questionable and he can act accordingly. Many of the "Mr. T" gold items are also not good, that is, they may be stamped 18K and be 10k or worse.
The buyers of such items are not sophisticated enough to realize they are being screwed by the seller.

But to be more specific, and this is common knowledge, but "karats" as applied to gold are 1/24ths of pure gold. For instance 14K gold is something made with 14/24ths pure gold or to be more exact is .583333 of pure. When buying I used .565, to make up for sizing, solders, etc. The other 10/24ths can be copper or many other metals, even aluminum, which produces a purplish gold, that is somewhat brittle. I've never seen anything made with a gold/alum. mix. Gold is a very fascinating metal besides its value. If you melt significant quantity or rings, you will find there is a real value of silver and platinum family metals in there, that was not removed from the copper used as the main mix metal.

Men's wedding bands can be worth, in gold value, from about $50 on up to a couple of hundred depending on how much they weigh and the karat of the gold. Gold is valued in troy weight, which is about 31.1 grams/troy ounce. So to show the process, lets say you have an average man's wedding band, which might weigh 4 grams. Take current gold spot, assume $1330/ounce divide by 31.1 equals $42.76/gram value of pure gold. Now take that number and multiply it by the karat weight of the ring, 14k=.5833 so $42.76x .5833 equals $24.93 value per gram of 14k gold. So 4 x $24.93 equals $99.72 gold value for a 4 gram 14K ring. That's why gold and jewelry buyers very rarely buy anything retail.

quote:

You are going to cut up a USS Central America $20 gold piece to pay for groceries? You just destroyed the collectible part of the coin. Much easier to clip off sections of a ring and no loss of value.

quote:

Damn right I would if that's all I had left and my family and kids were hungry. Anything is only worth what someone is willing to pay for it. When you don't have any, food becomes quite valuable. A lot of German women, post WWII, traded their you know whats for a sandwich. Of course, that didn't destroy any collectible value.

Besides, that is a stupid example, for every Central America (name of wrecked ship they were salvaged from) gold coin out there, there are literally hundreds of thousands of other US 20s, not to mention silver, and gold coins from other countries. The good thing about clips from coins is that people know the percentage gold content and can value it accordingly.

Another factor you are not considering is, how do you carry a couple of buckets of gold rings around when society is going to hell, and keep them? There are places on this earth, as I write, where people will kill you for ANYTHING of value if they think they can get away with it. Try walking around in Caracas, Venezuela at night wearing a Mr. T type necklace and a gold Rolex and see how far you get. Because of high purity, one can carry a fair value of gold on one's person and it won't be obvious.

quote:

be aware that gold coins, of all countries, are very often counterfeited and the quality is quite good

Not really, it comes back to the "look" I mentioned above. I melted some US gold coins, $10 Indians, to be exact, which did look good, but 10 seconds with a loupe and they weren't nearly as good as they seemed. I really can't educate someone by writing, but almost all counterfeits are cast, some much better than others, but USUALLY the type that are passes off for bullion are pretty poor. Their surfaces will show unfilled pits, the denticles won't look right, etc. Now, that said, there have been some INCREDIBLY good rare gold coin fakes that have fooled experts time after time, BUT knowing the die characteristics of real examples and comparing them, which, of course, the average person can't do, will show them to be fakes.

But, in general, you're right, its CAVEAT EMPTOR all the way when you're trading real money for a coin, gold, diamonds, whatever.

Look, guys, I apologize, I'm not going to continue to waste my time arguing fine points with someone who probably hasn't ever bought and sold scrap gold or anything else on the street. It's brutal out there.

Just for instance, I had a large package of scrap gold I was selling and 2 ex-pat Iranians (this was post Shah times) from Hill St in LA decided to buy it and split it up. They spent at least 30 minutes at my table arguing over 56 CENTS difference, for Pete's sake, and nearly came to blows over it while getting louder and louder. One was using a slightly different decimal place. Finally, I took 3 quarters out of my pocket, gave it to the one who was "short" and told them to get the hell out of my way, they were costing me business. He was insulted, but not enough not to take the money, his package of gold, and leave.

Buying and selling gold is a quick way to lose your ass unless you REALLY know what you're doing - and that generally means fleecing those who don't. It is not something that you want to dabble in. If you want to make money in gold, mining stocks are a lot easier.

I bought a lot of Krugerrands back in the late 80's and early 90's. Mostly in collectible sets from the SA Mint. Haven't purchased an ounce since then. Too many better investments to be made.

If you want to balance your portfolio with tangibles - buy real estate.

Not sure anyone has said this explicitly, but the problem with buying gold is that generally you are buying at retail and selling at wholesale, so the price of gold has to go up quite a bit in order for you to make some money, unless of course, you are a survivalist.
Peter.

If you really want to get screwed try to buy and sell diamonds...

https://www.jmbullion.com/10-oz-gold-bar-varied/

I see a 37 basis point cost to buy gold. $50 on $13k seems reasonable.

Is gold s great investment - given I am not a gold bug - probably not.

But I do see a place for it just as it has survived as an asset class for a lot longer than a lot of countries or religions.

Also more i look at bitcoin I like gold relative to it as a store of value.

For me it’s easy to hedge out.

Physical gold consumes a lot less space than guns or other collectibles do.

I just don’t know the level of fraud in buying physical gold.

Gato information is highly informative.

Mike

Well, you could buy gold bars, but then you would have to pay for storage. However, it reduces the risk of "phony" gold, once it is assayed.
Peter.

Back in the late 80's I bought ladies platinum watches (Geneve, Mavado, Hamilton Curvex) that have quintupled in value. That turned out to be a great investment.

quote:

Originally posted by WannabeBwana:
So, I've done some reading on how to determine the actual weight of gold in a ring, for example.

I see lots of people trying to sell gold rings on Craigslist, etc. Usually they've had it appraised and are asking about 1/4 the appraised value (because we all know that appraised ain't worth shit unless a jeweler is actually trying to sell it to you).

Just for understanding, and I plan to do this with my own old wedding bands at home, what would be the realistic amount of gold in a standard man's wedding band, say 14k? I'm assuming I would calculate the weight and then figure out the value per the current gold price.

I'm guessing that even at 1/4 of appraised value, you'd still be paying higher than gold price for it.

This site will give you the going rate (updated daily) for scrap gold of all grades.
You will need a good accurate reliable scale, that is calibrated for TROY weight.

https://online.kitco.com/refining/gold-silver.html

The rate today for 14K gold is 23.13 per gram

when buying scrap gold a very fair price is 80% of the going rate..

Many of these "gold buying places" intentionally confuse sellers using obscure and obsolete terms of measurement such as pennyweights. learn about it but don't do it.

quote:

Originally posted by Opus1:
Buying and selling gold is a quick way to lose your ass unless you REALLY know what you're doing - and that generally means fleecing those who don't. It is not something that you want to dabble in. If you want to make money in gold, mining stocks are a lot easier.

I bought a lot of Krugerrands back in the late 80's and early 90's. Mostly in collectible sets from the SA Mint. Haven't purchased an ounce since then. Too many better investments to be made.

If you want to balance your portfolio with tangibles - buy real estate.

Easy way to lose money is to invest in gold miners

https://finance.yahoo.com/char...OiJHRFgifX1dfQ%3D%3D

One of the best things I can say about gold is that most guys mining/creating new gold lose money over time.

Mike

Since it (costs of purchasing/selling) has been mentioned several times, I thought I'd mention the acid question/test for anyone someone is buying gold from. The question is what is your spread? That is, if I buy a spot gold plus markup, what is your buyback price at same spot gold price. Just like in stocks, transaction costs can be significant. I mean if a guy sells xyz bullion coin at +10% but buys it back at +9% then your transaction costs will be much better than a +1/-1 seller. Of course the higher markup seller has to be available when you want to sell.

Charlie,next time you're up this way;I have the Reicksmarks from 1909-the naxi money as well as the Roman coins that I got in Nuremberg in the early 60's.

I'd like to have a time machine and $100K to go back to 1988 and buy all of the Swede Mausers I could for $50, K98k's for $100, and mummy wrap MAS 36's at $99. Who would need gold?

WEll, I would. Back then the price of gold was fixed at $35.00 an ounce!
Peter.

quote:

Originally posted by Peter:
WEll, I would. Back then the price of gold was fixed at $35.00 an ounce!
Peter.

Actually the US went off the gold standard on August 15, 1971 which was the last day you could buy gold in international markets at $35/oz.

Bobster,I had my FFL in the 80's when the "evil empire" collapsed. I was buying NEW 98's still in the cosmoline complete w/ bayonet + leather action sheath for $150.00 ea. also Lugers w/ matching serial #'s for $300.00 ea.I bought + sold them like hotcakes;wish I had saved a few. I have kept a couple of classic Lugers but none of the 98's. Mores the pity.

Thanks GG. I stand corrected! However, after the rate floated, it stayed low for quite a few years. I picked up some Canadian Maple Leafs at not much more than that in the late 70's. Maybe 100 bucks or so? Then things went crazy! I would be interested in finding out whether Western Europe has the same fixation with gold or whether it is just a US thing. Ignoring the Middle and Far East which have always valued gold, primarily for decoration, but with the understanding that it is also an "investment".
Peter.

quote:

Originally posted by Peter:
Thanks GG. I stand corrected! However, after the rate floated, it stayed low for quite a few years. I picked up some Canadian Maple Leafs at not much more than that in the late 70's. Maybe 100 bucks or so? Then things went crazy! I would be interested in finding out whether Western Europe has the same fixation with gold or whether it is just a US thing. Ignoring the Middle and Far East which have always valued gold, primarily for decoration, but with the understanding that it is also an "investment".
Peter.

Unless they were hot or someone selling had no idea of value, it would have been impossible to buy Maples for $100 in the late 70s. Gold did not "stay low" for long. See Below.

http://onlygold.com/m/Prices/Prices1972.asp

Amazing how time flies, I sold/traded almost all of my physical gold at over $1800 spot. Seems like yesterday, but according to above it had to be in 2011. Getting old sucks. To be clear, I got rid of my gold because I had a better (IMO) use for the money. It wasn't because I was so smart as to be able to call the top. Same thing for silver, dumped over 4000 oz at about $31. Mentally said I'd replace it below $15.50 but have not done so.

I'm not a European, obviously, but there seems to be a substantial class of citizens in Europe who cling to gold ownership. The collapse of various currencies and banking controls over the years have made the benefits of owning gold obvious. I'd put the Euro in the same class, but who knows how long that fiction can last?

I seem to recall that in the spring of 1978 the spot price was about $850.00 per Troy oz.

Randy, I think you mean spring 1980. That is when inflation was going wild, and everyone, literally, was buying hard assets, thinking they would go to sky. Gold's high was around $850, a number, adjusted for inflation, it has NEVER reached since. Same for diamonds, without looking it up, the "gold" standard investment diamond, a 1 ct D flawless reached around $60,000/ct. A few years later, they were at about $7K.