1/8/13 5:50 PM – Buying Gold and Silver Coins

Some clients have asked me lately about buying gold or silver coins. I think most have in mind a doomsday scenario in which the U.S. economy collapses under the weight of runaway inflation and/or excessive debt.

I do not normally advise buying gold or silver coins in an IRA if you have the money to buy them for cash. Very few firms will allow you to hold physical gold or silver in an IRA. Those that will, you probably have never heard of. One I am familiar with charges $300/year in account fees. Also, having coins in an IRA rather than in your possession kind of misses the point in such a scenario.

You can buy securities like GLD or SLV, which track the price of the metals pretty well and which can be held in most IRAs, including Schwab IRAs. You don’t need a separate IRA, don’t pay an annual fee and the cost is usually just a $9.95 commission.

If you want to buy gold coins, American Eagle Gold and American Eagle Silver are the most popular and recognizable. You will pay a small premium over bullion or just gold or silver rounds, but I think the premium is worth it.

The cheapest prices I have seen for gold and silver coins are at www.BuyGoldandSilverSafely.com. Prices fluctuate all around the clock. I have no affiliation with that company and my research into them is pretty limited. Buy coins at your own risk but it is probably better than a local coin dealer or pawn shop. Remember that you have to pay shipping, which is normally insured.

Don’t get talked into buying numismatic gold or silver, i,e. rare coins or newly minted coins. Those are probably sales pitches that make the dealer more money and don’t benefit you much, if at all. Also, don’t get carried away by high pressure tactics or screaming newsletters.

If you a believer in the doomsday scenario, I think you will find silver more useful than gold because of its lower cost. But, owning land free and clear on which you can grow your own food and draw your own water is probably the most important thing you can do to prepare that scenario. Also, remember that water, food, fuel and marketable skills are much easier to barter than metal coins.