Buying Gold coins with a credit card

[deppilf]

I have had some experience in buying and re-selling gold coins. This is just like Loyal3/Kiva etc as their is risk. This is a great way to create some MS. I recommend you use buy the:
$20 Saint-Gaudens Gold Double Eagle - MS-65

You can learn more about them here: http://www.apmex.com/product/7225/20-saint-gaudens-gold-double-eagle-ms-65-pcgs

 

[Matt]

Really? I would normally say this is the most ridiculous idea due to the bid/ask spread - can you explain how that works here?

Edit - to add.. can you include transaction costs and process (the latter for risk assessment)

Thanks!

 

[deppilf]

Bid/ask you see at the top of the screen is just the quote daily rate on silver/gold. Therefore if you know how to trade ETF's/stocks and chart patterns you can time buying gold at the right time. I like to utilize the Slow STO with %k (5) and % D (1) and when a stock dips below 20 and clsoes below for a day and then closes above 20 I buy.

 

[Alex1432]

So this is like playing the market but with gold? Seems kind of risky like any stock purchases, because if gold goes up or down significantly I assume the coin price spread will as well and the chart you are using to purchase will not be accurate.

 

[Matt]

OK let's skip the fancy talk of charts and timing for a moment and focus on the basics:

Gold has a bid/ask spread that works on the spot price
Gold coins have a premium over the spot price
Gold coins bought by credit card have a premium over the Gold coin price (which has a premium above the spot price)

• So - if we pay premium 1 (bid/ask)
• then pay premium 2 (gold coins)
• then pay premium 3 (credit card)

How much does the spot price need to increase in order to cancel out those 3 premium payments?

 

[sriki]

I have used Apmex and Kitco before to buy 1Oz gold bars. But, I bought them as investment/jewelry purpose rather than as a MS. The spread and the CC premium (I once bought it with CC; rest were wire transfer) seem to be very high to do fast buy and sell. It looks like you need to hold it until price goes up a bit to break even or atleast lose just as much when buying GCs/VRs.

 

[PedroNY]

I am not sure what I am missing here, but wouldn't it make more sense to just buy SPDR Gold Trust (ETF) and call it a day. Unless you are presenting some sort of MS opportunity that I am missing here...

I do miss $1 "shinny gold" Native Americans and Presidential Coins and UPS guys lugging them up two flights of stairs to my old apartment, but I know that it is a topic for another thread!

Cheers,

PedroNY

 

[Matt]

I am not sure what I am missing here, but wouldn't it make more sense to just buy SPDR Gold Trust (ETF) and call it a day. Unless you are presenting some sort of MS opportunity that I am missing here...

I do miss $1 "shinny gold" Native Americans and Presidential Coins and UPS guys lugging them up two flights of stairs to my old apartment, but I know that it is a topic for another thread!

Cheers,

PedroNY

@deppilf is proposing this as a MS opportunity I believe, which I have trouble agreeing with.

 

[PedroNY]

@deppilf is proposing this as a MS opportunity I believe, which I have trouble agreeing with.

Yes, I recognize that and agree as I don't see any MS opportunity here at all. As a side note, if people do want to own Gold, it may make sense to do it through an ETF.

Cheers,

PedroNY

 

[sriki]

@PedroNY I agree with the MS aspect. But, when I want to own gold, I would rather like to hold onto physical gold. ETF are one other way to "play" it though.

 

[swifter]

Dont buying and selling coins result in taxes again? I do have some experience in owning the SLV ETFs, albeit unsuccessfully for the last 4 years. I bought it when it was trading at 47 and now its hovering around 20. I do believe in precious metals for the long haul, but I must agree they are not my best investment choices anymore. Also, there are some consequences to owning SLV and GLD in taxable accounts as the brokerage sends out 1099-B for the sale of underlying metal to cover the expense ratio, even when you don't sell the paper ETFs. This happens every month throughout your holding period. I had trouble finding out enough information about this even from the tax specialist at HR block. I just enter them every year to cover my bases. Look here for more information https://www.ishares.com/us/literature/tax-information/2013-ishares-silver-trust-tax-reporting-statement.pdf

 

[Matt]

Sadly, you'll be very unlikely to every have to report a tax gain with this strategy... but yes, anything you buy and sell should be reported for taxes.

 

[swifter]

Sadly, you'll be very unlikely to every have to report a tax gain with this strategy... but yes, anything you buy and sell should be reported for taxes.

Well, if you are going to lose money, then there is definitely no point in doing it. Doing taxes for hobbies like MS is out of my scope

 

[loves2fly]

@PedroNY But, when I want to own gold, I would rather like to hold onto physical gold. ETF are one other way to "play" it though.

we, too. we'd rather hold on to gold coins that we can barter anytime or just as collectors items to look at them every now and then than ETFs. as always, it's just our preference to hold on to 'expensive paperweights' as many people allude to them.