Your Questions About Invest In Gold Or Silver

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Daniel asks…

What are the laws in the US for buying gold with federal reserve notes?

I want to know the nuts and bolts of investing in gold. I heard that there are laws that make federal reserve notes “irredeemable” in gold. Do i have to exchange currency and buy gold in say Europe? Is this something any broker can do, or is it better to get with a specific kind of broker?

The money I have to invest is understood to be “losable”, and I know how volatile gold is, but I want to buy now because I think its going to up quite a bit pretty soon. Im not going to invest anything I cant afford to lose.

Thanks

Justin answers:

There is more than one way to invest in Gold (or any other precious metal).

One method is in the commodities market (also known as the futures market). There is not enough space to get into full details here. However, in simple terms, through a commodities broker, a person would buy/sell a futures contract of gold and then sell/buy that contract before maturity hoping that the price of that contract would move favorably to their position. Look for a book on futures trading at a book seller for more information.

The other method to invest in gold is to actually buy the gold. The most common method is to buy gold bullion in coins and bars that are minted by well-respected minters or governments. For example, the U.S. Mint has the American Eagle series of bullion coins. Http://www.usmint.gov/mint_programs/?action=american_eagles
They come in various sizes also, from 1/10 of an ounce to 1 ounce coins. The reason you buy bars or coins made by a mint is because those are certified to contain a certain amount of gold or other precious metal. An ingot, may or may not, be certified and then you would have to have it assayed before you sold it and that costs money.

You can buy minted bullion at several places online. One of my favorites is Bullion Direct. Http://www.bulliondirect.com/index.jsp
Another place is Kitco. Https://online.kitco.com/
You can have these places hold your bullion for you or you can have it delivered. I personally like it delivered. There is a small thrill when you hold the gold in your hand. 🙂

Anyway, that should get you started. A small disclaimer, I buy and sell bullion through Bullion Direct, but I have no other financial interest in the company. I have purchased bullion through Kitco, but I do not have any financial interest in the company.

BTW, Federal Reserve Notes (or dollars) are legal tender. They are not redeemable in gold or silver because the currency is no longer backed by a set amount of gold or silver. Many years ago, you could walk into a bank with a silver certificate (an old form of the dollar) and ask for the silver. That is no longer the case. However, there is no law in the U.S. That prevents you from owning gold and silver at this time.

Good luck,

Edit: The suggestion below, buying the ETF IAU, is also a good way to invest in gold. Less risky than buying commodities and less expensive than buying bullion.

James asks…

In layman’s terms, how does the stock market and investing work?

My business teacher tells me to save my gold and silver and to invest in Exxon-Mobil.

I don’t have any idea of how shares and anything works.

Justin answers:

To buy shares you first need to be connected to a brokerage company like td ameritrade,charles schawbb or similar type company.then you can buy shares in companies or buy into mutual funds.mutual funds are funds that are made up of many companies.and you can buy shares of exxon-mobil if you want or many other companies.

Donald asks…

What good physical investments are there for a 16 year old?

I know gold and silver are a good investment. What websites sell silver and gold which you have brought from and are trusted.

Justin answers:

I have also spent a lot of my life investing in various areas. With the impending currency collapse in Europe, I agree that both Gold and Silver would both probably both be very wise investments.

I don’t invest in much silver because it would take up too much space. I have substantial holdings in gold which have done me very well for the last 2 years. If you have the money for gold, take a look at Sovereign Investments UK. I have bought from them several times and I believe they offer the best buying and selling prices out there.

Charles asks…

Best introductory books to investing and money?

I want a book that doesn’t assume the reader knows any terms about investing and money. I tried to read “The Intelligent Investor” but discontinued my efforts because I became lost in the jargon and numbers. I want to know about money and investments of all kinds, the stock market, commodities, gold and silver, good times to buy and good times to sell or trade or hold. I’ll reiterate that I know essential nothing about investing and money other than it’s green.

Justin answers:

The Naked Trader by Robbie Burns

Robert asks…

What is a good hedge against dollar devaluation?

What currency would you prefer having your savings in, keeping in mind that higher inflation could affect the value of your money, Euros, US Dollars, British Pounds, Japanese Yen, Hong Kong Dollars, Swiss Francs, or other and why?

Would it be wise to invest in a currency that has defaulted already (i.e. Iceland – has probably hit the bottom value-wise) as that currency would gain value the quickest if the dollar were to be devalued?

Not interested in buying gold/silver either….

Justin answers:

I personally hold physical Canadian currency. There are several reasons for this. The local banks carry it. It is the only currency they will accept because we border Canada (I live in Alaska). During a currency devaluation and economic crisses Alaska is more likely to trade and recieve goods from Canada because they are a producing nation. Alaska is not connected to the US. You must come through Canada so it is wise to hold their currency for travel expenses. Also the US dollar will decline and buying Canadian currency now would be a good hedge for buying Canadian goods in the future. They have gold mining companies. 99% of mining companies are Canadian and listed on the TSX. Canada would be one of only a few countries that could back their currency by gold or silver in the future with ease because of their mining production capacity.

I currently hold 10% of my liquid cash reserves in Canadian currency to hedge against the US dollar. It is a good idea to do so. Banks in the Lower 48 may stock and trade other currency as well but here in Alaska the Canadian dollar is the only one they accept so I hold it. All other currencies IMO are in just as bad of shape as the US dollar. IMO Canada is better positioned but they too are inflating their currency as well.

Richard asks…

When do you think the price of metals will come down?

I am interested in starting my own jewelry business, but the price of gold and silver are sky high right now! Of course, no one will know for sure, but when do you think the price of gold, silver, and other metals come down and why? Thanks in advance to all who answer. Serious answers only please.

Justin answers:

With currect market condition in the US. Everyone is betting that GOLD is even moving higher, Because gold is a commodity used as a hedge in case of market fluctutions and instability/uncertainty, further more when investors lose confidence they tend to invest in gold which drives demand high and simultanously the price of gold. When Dollar loses value GOLD increases in Value! And Vise versa. If The US government is pumping about 3 billion dollar in the US economy each day to keep it liquid, what is expected!?? The dollar is heading towards troubles.!! That’s my personal opinion. Gold is going to sky rocket in the near future!

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