My big boss here at work (he of P365SAS fame) came into my office the other day and in a low voice asked me “Where can I sell some gold and silver?”

Well……

The Metals Pimp is somewhat semi-retired so I gave my boss the card for my buddy at the local coin shop. How much are we talking about, I asked, trying not sound terribly nosey. “Somewhere around $75,000 to $100,000”, he replied. That’s not a lightweight amount, but it’s not earth-shaking either. But there’s an opportunity in there.

Whenever you buy PM’s (precious metals) there’s a ‘premium’. The premium is what you pay on top of ‘spot’ price. Spot is what the markets say current price is. For example: Gold is $2500/oz. so my guy is selling 1 oz. at “$100 over spot”. This means he’s selling it for spot price ($2500) plus another $100. Thus, your one ounce of gold will cost you $2600.

Now, what if you want to buy a smaller amount of gold? Maybe just a 1/10 oz? Interestingly, the premiums are higher the smaller the piece of gold. For example, a 1/10th oz. gold Eagle  may be “10% over spot”. Well 1/10th of $2500 is $250 (because you’re not buying an ounce…your buying 1/10th of an ounce), and 10% of $250 is $25. So that 1/10th Eagle is, to you, $275.

Obviously the best thing you can hope for is to buy gold at spot, or even below spot. How do you buy gold at spot, you ask? Easy(ish): if the dealer buys it below spot, he can sell it at spot (or slightly above) and still make his money. The difference between what the dealer paid for it and what he sells it for is the spread….thats his profit. Gold is $2500/oz. He buys an Eagle over the counter for, say, “$20 below spot” and he sells it for “$25 over spot”…his profit is $45. Thats how this works.

Why would anyone sell their gold at below spot? For the same reason anyone sells anything – they want /need the money. But, also, some forms of gold are more desirable than others. If you walk into a coin shop with, say, some 1/10 Eagles or 1/4 oz. gold you’ll probably get a better price than if you walked in with a 10 oz. bar of gold. Why is that? Well, among other things, risk. It’s a lot easier for our guy to sell a 1/10th Eagle or similar small gold unit than it  is to sell a 10 oz. bar. And every day he has to hold onto that 10 oz. bar is another day of risking a swing in the market. So, the bigger gold doesn’t get you as much when you sell it as the smaller gold does.

Usually what happens is when the dealer takes in a large quantity of gold, say a tube of 20 gold Eagles (thats $50,000 at current pricing), he just immediately calls a wholesaler and sells it to them that day so he doesnt get caught with it if the price craps the bed the next day.

So, if you want a good deal (gold at spot with no premium) you have to be willing to take gold in a form you may not ideally want. I told my guy that if he ever gets any gold in that he wants to sell at spot, let me know. And, once in a while, that happens. He’ll take in something that is in a form that makes it unlikely to sell quickly (foreign coin, commemorative, odd metric weight, etc.) so he just wants to get it sold and take his profit. Thats where I step in. I just want the gold…I dont care if its a French Rooster, British Sovereign, or Credit Suisse bar. In fact, I just got three British Sovereigns the other day at spot.

So, anyway, I called my guy and said that I was sending him someone that might have a bunch of gold he wants to unload. He said that if it worked out, he could give me a bit of a finders fee. I countered and told him that this was what I wanted as my finders fee: I get the opportunity to buy up to two ounces of gold at his price. I know he’s not going to pay more than spot, so I’m hoping there’s some fractionals (1/10, 1/4, 1/2, etc) in there. If I could get 20 1/10ths at spot I’d be supermegahappy.

Why don’t I just buy them straight from my boss, you might ask. I don’t want to create the awkwardness of hemming and hawing a deal out with the guy who signs my paycheck. Let the other guy do that and then just buy from him.

So, I’m hoping that when my boss returns from his trip next week he’ll have a nice stash of metals to take to my buddy and that I’ll wind up getting some good stuff at cost. I mean, I can live with two 1oz. Krugs at spot, but I’d much much rather have 20 1/10th Eagles at spot.

We shall see.

Zimbabwe has introduced a new gold-backed currency called ZiG – the name stands for “Zimbabwe Gold”.

It is the latest attempt to stabilise an economy that has lurched from crisis to crisis for the past 25 years.

Unveiling the new notes, central bank governor John Mushayavanhu said the ZiG would be structured, and set at a market-determined exchange rate.

The ZiG replaces a Zimbabwean dollar, the RTGS, that had lost three-quarters of its value so far this year.

Annual inflation in March reached 55% – a seven-month high.

Zimbabweans have 21 days to exchange old, inflation-hit notes for the new currency.

Glaringly absent is anything about whether you’ll be able to actually walk into a Zim bank (which I imagine as being like a cross between a bank and a 7-11 in a bad neighborhood) and redeem that paper for actual gold. Because…if you can’t, then you’re right back to a faith-based currency.

I’ve actually stopped buying gold and silver for right now because I just don’t wanna spend that kind of money. But, Im both delighted and terrified to see how the metals I have are increasing in value. (Or, more accurately, how the value of the metals is staying the same and the value of the currency is declining.)

Swung by to say hi to my buddy at Grizzly Gold and he had these for me:I’m always a sucker for these discontinued ‘divisible’ silver rounds. Although, really, a hammer and chisel makes any round divisible.

The Metals Pimp is enjoying a semi-retirement so I don’t bother him for much in the way of metals these days. As always, I recommend him as your first choice, but be warned…he’s not answering the phone for anything but larger orders. However, Ive no doubt he will continue in his reduced role with the same integrity and efficiency that he has demonstrated since Day One in that business.

If you’re in Missoula, go talk to Bob over at Grizzly Gold and tell him Commander Zero sent you.

Silver is down a bit, but the premiums are still obscene. But… a man’s gotta do what a man’s gotta do:

And then, since apparently it was my birthday last week, someone very generously gifted me this:

Cool, hm?

By the by, as I’ve mentioned before, I am a fan of setting goals. I actually set a goal each year for how much silver and gold I want to acquire. The goal each year is to increase the stash from the previous year by 50%. This goes a ways towards giving me a headstart on 2022. And it gives me an even greater headstart on hedging against whatever whipping up a few trillion dollars out of thin air will bring. But, being a cautious dude, I put money elsewhere as well…..cash, the markets, metals, and ….and…..land. Soon.

I play the market, sure, but I also don’t put all my eggs in one basket. And, once in a very rare while, I get a deal. Today’s case in point:

What did I pay? Spot. See, some forms of gold are more marketable than others. When someone sells the gold/silver guy some gold ‘over the counter’, he usually buys it as close to spot as possible. But if the gold/silver is in a form that is not really sought after in retail, he buys it for less than spot. An example would be a 100-oz bar of silver. Not alot of people walk into a shop and ask for a 100 oz. bar. As a result, he needs to get into it at less than the price he’d have paid for, say , 100 1-oz. bars/rounds.

So, as it turns out, while small (‘fractional’) bits of gold (1 gram, 5 gram, 10 gram, etc) are easy to resell, the larger metric-denominated versions are less desirable. So…he bought it at less than spot. I offered spot. And he took it. So…score.

The lesson here is that if you’re going to buy metals, and you’re planning on holding them for a long time, and if you can swing the cash, your best value is in the larger single-unit quantities…. 10 oz bar vs 10 1-oz bars, 100 oz bar vs 10 10-oz bars etc.

As for this little guy, it goes in the safe and sits there quietly until next years land purchase. Or the apocalypse. Whichever comes first.

ETA: By the way, I never, ever, buy gold in any quantity without testing it on one of these. A tester like this will set you back about a grand. But if it keeps you from buying one fake gold coin, it’s paid for itself. My guy at the coin shop understands that even though I know he tests any gold he buys across the counter, I need to see it being tested. I could take his word for it, and I trust him when he says he tested it and it tested okay..but доверяй, но проверяй…doveryay, no proveryay…trust, but verify. And he’s cool with that. Honestly, if your PM guy isn’t cool with retesting something while you watch and just expects you to take his word for it….you need a new guy.

Kind of a question and answer all in one photo:
By the way, it’s surprisingly difficult to take a picture of gold. The lighting has to be just right or you get hellacious glare.

I really don’t believe there’ll be a time when we’re trading gold and silver in the burned-out rubble of WalMart for cans of out-of-date food. And I’m somewhat sure that a bout of Weimaresque hyperinflation isn’t coming. (Although history has shown that a world war does wonders for economies…maybe we’ve got something coming up against the Russians/Chinese.)  And it isn’t really a great investment since it’s returns are lowest among pretty much any investment. (And, yes, gold really isn’t an investment as much as it is a store of wealth. There’s a big difference there.)

But, for some reason, it makes me feel better having it. Like the shelves full of #10 cans of freezedried food, the cases of AR’s, the rack of full fuel cans, etc. It just makes me feel calmer, even though I intellectually know that my odds of needing them are rather slim. But…that could just be the normalcy bias talking.

But, as I said, it makes me feel safer and calm……Which, I suppose, is all the justification I need for what I do.

Anyway, a portion of whatever I have available after the bills are paid goes to metals, some to investments, some to cash, etc. I picked these little generic 1/10ths the other day and they’re just too pretty not to take a picture of.