Starting a Silver and Gold Portfolio

In parts 1-3 of our “Guide to Silver/Gold 101,” we cover the fundamentals of silver and gold investing that we personally believe everyone should first know and understand. Now we are going to the technical details of starting a silver and gold portfolio.

Don’t worry! As always, we are committed to giving the simplest explanations to you, so you can have a really good idea of what to expect with from your silver and gold purchase.

We will begin by addressing the most common follow-up question asked by many: Where or to whom can you sell your silver and gold back to?

 

1. Where to sell it back for cash?

The word used to describe the sell back of silver and gold for cash is called “liquidation”. Liquidation can be done at most bullion dealers in Singapore (including us). Here’s a list of some of them:

With gold, it is even easier to sell. Pawnshops like Maxi-Cash, Moneymax and Valuemax will be able to buy back from you as well. We suggest that you do a bit of shopping around to see who can offer the best cashback price.

 

Cash out your silver and gold at numerous places in Singapore.

Your bullion can be authenticated by most of the dealers here in Singapore.

 2. How do I know that my gold and silver is authentic?

The above places listed will be able to verify the authenticity of your gold and silver. However, there are various factors that can help you determine the authenticity of the bullion.

  1. Buy from a reputable source.
  2. Look out for bullion that are recognised by the London Bullion Market Association – http://www.lbma.org.uk/. These silver and gold bullion are also usually GST free.
  3. Gold and silver bars should have a serial number and comes with an authenticity certificate.
  4. It is best to purchase gold and silver coins issued by the government or state mints around the world.

Many of these products are featured in our online store.

 

 3. The difference between buying price and selling price

You may notice that there’s a difference in price between what you pay for when you buy silver and gold and what you get in return when you sell.

The prices of gold and silver are generally controlled by the market. You will find that all over the world there is little price difference between sellers. Such prices are based on market prices which can be seen in websites like Goldprice.org or Kitco.com.

However, in order for the gold or silver to reach your hands, work is involved. It includes the mining, melting, shaping, packaging, transporting and all other manufacturing and logistical costs that you can think of. So the costs are ultimately offset to you. This additional cost is called a Premium and it varies between dealers.

When you sell it back for liquidation, there’s hardly any costs added to the ready made bullion. So you will receive the price as reflected in the market at that time. Sometimes, if the bullion is large and expensive, you may even get lesser cash than what is reflected in the market. This is because larger bullion requires more costs in space, handling and insurance, so again, the costs will be offset to you.

 

Taking the analogy of a chicken, the amount of premium you pay would be reflected on how much work is put in to have it ready for you.

In case of bullion, size matters.

 4. Bigger Bullion = Greater Savings Per Gramme

One thing we need to address: Do not be fooled by the prices shown at the storefronts of many jewellery and pawn shops. You know, the ones that shows “999 Gold = $56; 916 Gold = $49”. Like it or not, you WILL be affected by the additional premiums.

But how much premiums are you exactly paying?

The rule of thumb is: The bigger the bullion, the less it costs to manufacture. Hence, the less it costs per gramme.However, that doesn’t mean smaller bullion are bad. Smaller bullion

However, that doesn’t mean smaller bullion are bad. Smaller bullion are easier to liquidate, less bulky and more divisible. In scenarios where you require to urgently liquidate some gold for cash that amounts to, say, $100. If you have smaller bullion, you can liquidate just enough to meet your requirements and keep the rest. A bigger bullion would require you to liquidate the entire bullion and repurchase smaller bullions with your cash, which means you will be paying more premium than before!

 

The most important point of all is to understand what money really is…

One of the best video series that we recommend many of our clients to watch is “The Hidden Secrets of Money” from Mike Maloney, money historian and founder of GoldSilver.com.

In this video series, you’ll get an in-depth look at the history of money, how the financial system currently works, how the economy actually has a cycle, and how to predict what will happen next, so that you can take advantage of the biggest wealth transfer in history.

In Chapter 5…

 

We learn the similarities and and differences between silver and gold.