Gold: Paper or the Real Deal? (Conclusion)
I'll be tying up the loose ends in this post. If you've read the first two posts in this series you already have a decent drift on how I view investing in "paper" gold. But hey...that's me. So now I'd like to throw a few tips your way about how to handle your gold when it comes time to selling it or what to do with it in general.
1. Right from the get-go let me repeat myself yet again about "paper" gold investments. I personally don't find them very attractive from an investment standpoint. As an old timer who came up the hard way, I believe that you should, like your enemies, keep your gold close at hand. Real gold, that is. And I mean placer gold, specimen gold, gold jewelry you may have found detecting, and gold coins and bullion. In other words, always take possession of or maintain possession of your gold whatever form it may be in. "Paper" gold investments are simply too risky overall for my tastes and the potential for scams is just too high.
2. If you have to sell your gold to keep operating, do so but be smart about it. I made the bulk of my gold recoveries (including "beach" gold) during the period from the late 1970s through the mid-1990s. I've slowed down in this regard quite a bit lately, but what I have to say here still applies. I've never fully supported myself or my family via small-scale gold mining or treasure hunting but along that winding path I stacked up decent amounts of "goodies" these ways at various times. Sometimes this amounted to what most of us would consider to be "big bucks." I'm just saying...not bragging. And as a small-scale guy operating alone a good deal of the time my gold take in all forms would never come close to the takes of those erstwhile gold mining "stars" on reality TV. They'd laugh at my gold recoveries, in point of fact and dismiss me as lightweight. So be it.
(To sell or not to sell...)
The best piece of advice I can give you under this heading is to NOT sell your gold or gold finds of any variety if you can afford not to. But you probably will have to in certain instances, especially if you're seriously going at it. You'll need gear and equipment, spare parts, gas, supplies, food, etc., to keep yourself up and running. If at all possible don't sell the placer or hard-rock gold you've recovered through various means to "local" buyers. For example, the worst prices a guy or gal could get for their dredged or sniped placer gold in the Northern California Motherlode back in the day was in the nearest small town (and all the towns are tiny in that part of the world!). The few gold buyers there had a "captive" audience of dredgers and miners (and still do I suspect...minus the dredgers). This meant they could undercut the higher gold prices that you'd be able to get in bigger towns or large cities. Now this doesn't mean the gold buyers in those small Motherlode towns were dishonest...no, not at all. They just knew they had an edge on you and acted upon it. Supply and demand, you know?
3. Remember, the daily "spot" price of a troy ounce of gold governs the money you'll receive for your placer gold if you sell it, MINUS the purity factor of that gold. Now some greenhorns or newbies out there might believe that half-ounce of placer gold they've panned or sluiced over the summer is worth $1,000.00 (USD) at a hypothetical spot price of $2,000.00 a troy ounce. Wrong! Natural gold (whether placer or lode) is never .999 pure like bullion. And those daily gold spot prices are based on one troy ounce of PURE gold (or rated at .999 purity out of 1,000 parts). The purity of placer gold (and lode for that matter) varies highly from spot-to-spot and area-to-area. In my day I've recovered placer gold that was as low as .750 fine and as high as .917 fine in terms of purity, with most of it running in the mid-to-high .800s fine range. This is because natural gold in all its forms is always alloyed or "contaminated" with other metals like iron, copper, silver, and so on. And no, most gold buyers could give a shit less about the copper or silver or iron content or any other alloy in that gold you panned...like you, they're all about the gold. So you'll get paid for your gold based on the daily spot price minus the purity factor, minus the transaction "charge" or small bite the buyer always takes, and minus the "burn" factor if you're selling your yellow to one of those small-town gold buyers with a captive audience. So newbies and greenhorns take note.
(It's gold alright but it ain't pure.)
Much the same holds true for any jewelry gold you've recovered in your treasure hunting or beach gold pursuits. Gold jewelry in the United States (and most of the known world) is rated by karat values ranging from 10k (.417 fine), 14k (.585 fine), 18k (.750 fine), or 22k (.916 fine). In other words, those are the amounts of gold in a given piece of gold jewelry and the rest is alloy metal. By the way, rarely do you come across 18k or (especially) 22k gold jewelry finds in the United States. In Asia and elsewhere, however, 18k and 22k jewelry can be fairly common. Anyway, you'll get paid cash for the weight of the gold in that jewelry you detected based on its purity value and the daily spot price minus the transaction charge or buyer's "bite." So do the math on this stuff BEFORE you head out to sell your finds to a buyer. Know what that 14k ring or necklace or bracelet is worth ahead of time so you can gauge if the gold buyer you're selling to is on the up and up and not totally ripping you off.
4. One of the best and most cost-effective ways of "disposing" of your gold finds (placer, jewelry finds, etc.) is to trade it straight across for .999 gold bullion. Ditto for any silver in your possession as well. This is what I've done for most of my life with the gold (and silver) I've recovered. You'll get a fairer shake with most buyers by doing this if you work it out with them ahead of the transaction because they don't have to shell out any cash, they can unload some of their bullion stock and have it instantly replaced by gold, and still get a small transaction fee (and sometimes you can get them to toss the fee part altogether if you consistently bring your business their way). It's win-win deal all the way around. At the conclusion of a trade like this, you have REAL gold in your hot little hand that is .999 pure and easily sold, traded, or stockpiled. Additionally, if the doomsday preppers are right about future economic collapse, silver and/or gold bullion of known purity value will be your best way of buying what you need because paper money and "paper" gold investments will be absolutely worthless except for wiping your ass. And if your "paper" gold is all digitally based you won't even be able to do that with it! I'm shooting you straight here.
(One ounce gold "rounds" are always a good way to go.)
Again, all these suggestions are simply my opinion and based on what I have done in the past and still do. What you do with your gold or how you handle it is your business and your business alone. All I'm trying to say here is to be SMART about it.
Have a good one!
(c) Jim Rocha2018
Questions? E-mail me at firstname.lastname@example.org