Silver 40% for gold bullion cons

[Jyorsky]

I am not sure if this is correct forum. Or. Has been asked before......

What is upside or downside to liquidate my kennedys 40% for gold US coins......

Any thoughts

Thanks

 

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[FormerTeller]

Just do it when the ratio of gold to silver is high.

 

[silveraddict]

Now is not the time to trade silver for gold.
When the gold/silver ratio hit 82 last year I traded 1/2 of of gold for 41 oz of silver.
When the ratio drops to 30ish I will trade the silver oz for over an oz of gold.
Trade silver for gold when the ratio is low. Trade gold for silver when the ratio is high.

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[TheMastermind]

^^^ What they said.

 

[LooseChange]

Like all have said, be patient about it.

You still have to swallow the premium, but if you time it right you'll get more gold for the same amount of junk silver. You will feel like a genius when you get an oz of fine gold for every 370 40% Kens at a 50:1 ratio rather than needing 550 per oz at a 75:1 ratio.

Keep stacking 40's at face value until the gold to silver ratio drops below 50. It doesn't matter what spot price is in terms of dollars, just that the ratio is good.

 

[ArkieBassMan]

Keep in mind that there is no magic bullion shop that just swaps even gold for silver or vice-versa. You need a good market to sell and a good place to buy. Typically you get less than spot to sell, but have to pay a premium over spot to buy. Even though ratios might be "right", you may be looking at scenario where you need a 15-20% jump in price just to break even.

 

[LooseChange]

Of course you are going to be behind both the premium and the dealer markup when trading with a dealer. That is why you need to work the far ends of the swing. If a magic bullion swap shop existed, you could trade bullion every single day in whatever direction the ratio moved. Because it doesn't, you have to work the extraordinary highs and lows of the ratio trend. Those extraordinary highs and lows do exist and they are not fleeting. They last for months at a time.

When the ratio is favorable (either high 70s or low 50s), go to a large show with lots of dealers. Ask a number of dealers for their best even trade deal and take the best of the bunch. There is no "jump in price" consideration whatsoever. It doesn't matter whether you bought your bullion, dug your junk, or traded for it. You don't care (and the dealer doesn't care) what the spot price is - only the trade-trade matters.

I have done this trade in both directions and it works as advertised.

 

[Jyorsky]

#1. Excellent schooling from all.
#2. Current ratio is 75-1 if my math,is correct, and following the reasoning, time to buy silver.
#3. If ratio falls to the 30's time to look at trading silver to gold
#4. Just thinking out loud, need app that will track ratio daily and send text message for certain trends or benchmark.
Again thanks for sage information....

 

[FormerTeller]

#4 please post if you find that app; I'm sure a lot of us would use it.

 

[Zomotion]

#4 please post if you find that app; I'm sure a lot of us would use it.

I use an app called CMI gold & silver. It's lists spot prices with the ratio of gold/silver. Currently at 74.95. It has more use than just spot, but it's really easy to use and access for current info

 

[baddbluff]

Interesting thread.
You guys actually make $ through arbitrage by trading silver & gold back & forth?

 

[smokeythecat]

I lose no matter what. Don't have many 40% er's either. Never was good at the selling part, and generally don't sell anything.

 

[LooseChange]

Interesting thread.
You guys actually make $ through arbitrage by trading silver & gold back & forth?

It is not exactly arbitrage. And, it is not exactly making $.

The goal is to grow the overall stack of precious metal irrespective of spot price. The metals of choice are silver and gold because both are very commonly held in physical form. You could add in any other precious metal (platinum for example), but it would be more difficult to find a trade partner. You can go to any coin show and find multiple possible trade options for either gold or silver.

 

[dfallis1]

^Agree^. There is no real profit unless you invest BIG money. I have been using this same technique for years. With the app LOL. Spending a few grand using this formula wont earn any big profits but you are growing your precious metal hoard at a lower than average price. Which makes up for dealer increases ect.

 

[Silver_Coin_Newb]

If you stack ASE for this only, do you think you'd have a better shot at trading straight across? Just thinking ASE seem to hold a premium.


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