Trading silver for gold.

[The Aluminum Monster]

Hello all,

I was hoping to get your thoughts and advice on if it is a good idea to attempt to trade constitutional silver for gold. I am not even sure how to go about trying it as there are no local coin shops around me. My idea was to trade $500 face value of 90 percent ($100 Morgan/Peace, $100 mixed halves, $200 in quarters and $100 in mixed dimes) for 5 ounces of gold, either in American Eagle or one ounce bar form.

Am I ripping myself off? Do companies like APMEX, et al. even do this sort of thing? Would it be easier to make a private sale and then purchase the gold? Obviously, the key here would be to get the gold from a reputable source such as APMEX or Provident.

I would appreciate any and all thoughts on this.

Thanks,

Jay

 

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[jim4silver]

Generally, when gold goes up so does silver. When gold goes down silver does too. Silver usually moves farther, faster than gold in either direction. Having said that, you will want to trade your silver for gold when the ratio is LOW. Today the ratio is HIGH, meaning it takes more silver ounces for an ounce of gold.

If anything, now would be a good time to trade gold for silver, if a person wanted to switch. Back in 2011 when gold and silver were hitting highs, the gold to silver ratio got as low as 33 or so, meaning 33 ounces of silver for one ounce of gold. Today it is like 70 to 1 or so, thus taking 70 ounces of silver for one ounce of gold.

The only reason I would trade gold for silver is if I was 99% sure both metals were going to tank BIG TIME. But even then I wouldn't do that trade now.

Just my opinion.


Jim

 

[The Aluminum Monster]

Thanks, Jim.

I guess I just need to be patient. I am in metals for the long game. I still have a few decades until retirement. I deliberately have such a surplus of 90% in my silver stack that I guess I never really thought of my next move in regards to it. I have no problem sitting on it but was just curious if it is worth reinvesting, say, 500 ounces of it somewhere else. Even .999 rounds/bars.

 

[jim4silver]

Thanks, Jim.

I guess I just need to be patient. I am in metals for the long game. I still have a few decades until retirement. I deliberately have such a surplus of 90% in my silver stack that I guess I never really thought of my next move in regards to it. I have no problem sitting on it but was just curious if it is worth reinvesting, say, 500 ounces of it somewhere else. Even .999 rounds/bars.

Unless you are selling something that is now high premium that you will profit on in ounces, I wouldn't swap the 90% for other silver. Right now 90% premiums are lower than they have been in several years. Give it time and 90% will be the thing everyone wants again and people will pay more for it than US silver eagles per ounce of silver (I've seen this happen a few times during my 12 year or so PM addiction). We are just talking everyday circulated junk silver, not the fancy BU stuff. I've seen it sell for $5+ over melt per ounce retail at certain peak times.

One time an old coin dealer advised me to stop trading one PM for another and just accumulate. Of course I didn't listen at that time, but eventually saw that route wasn't the best. Based on my past experience I would advise, if I had too much silver, stop buying it and start buying gold, etc. The exception to this is when the ratio gets to a sweet spot for swapping say gold for silver or silver for gold, etc. Then it is smart.

You might consider simply buying something other than silver for a while if you want to keep putting $$$ into PM's.

PS I am not really qualified to give any advice so caveat emptor and good luck!

Jim