Purchase and Considerations
North American Investment Services, LLC can broker the purchase or sale of gold, silver, platinum and palladium.
Precious metals as Commodities
Gold, silver, platinum and palladium are commodities. Commodities are raw materials or an agricultural products that can be bought or sold. Commodities are traded and have a market price that adjusts based on supply and demand and various other market, economic and geopolitical forces. The price at which precious metals are traded is called the “spot” price and this price is established by COMEX which is the primary market for trading metals.
Once the mined gold, silver, platinum or palladium is out of the grounds and refined it can be cast in numerous forms as minted coins or bullion.
Gold, platinum and silver are minted by the United States and various other governments around the world. Precious metals minted by the US Mint are the American Silver Eagle (stamped as “one dollar”), The American Platinum Eagle (stamped as $100) and the American Gold Eagle (stamped as $50). While not advisable, all three are legal tender in a consumer setting.
Another form of minted coins are 1964 and 1969 junk silver. In 1964 and years prior thereto, quarters and dimes were 90% silver and 10% alloy. Between 1965 and 1969, quarters and dimes were 40% silver and 60% alloy. While a “junk” quarter is worth considerably more than the 25 cent face value on the coin due to the silver content, a junk silver dime or quarter continues to be legal tender.
Coins can also be graded or referred to as numismatic. Graded coins are usually cased and more expensive. We don’t discourage the ownership of numismatic coins but don’t encourage large numismatic investments.
Precious metals cast as bullion, take the form of rounds or bars. Rounds typically come in one ounce increments and will sometimes look similar to legally minted coins. A round will be stamped with the weight and purity of the metal.
Bars usually come in one ounce, 10 ounce or 100 ounce sizes although other less standard increments are available. Bars should also be stamped with the weight and purity of the metal.
The purchase of precious metals are usually tied to the spot price. Both minted precious metals and bullion metals will be quoted higher than the actual spot price of the metal. However, minted coins will usually carry a higher premium over spot making them more expensive than bullion.
Owning Minted Coins Versus Bullion
What to own is governed by your goals as an investor.
If you are strictly looking at precious metals as an investment believing that metals will increase in value, invest in bullion and avoid the additional premiums attached to minted metals.
If you want precious metals as an investment but are also concerned about inflation and the volatile paper markets, pay the premium and get the minted American eagles or minted currency from another western government.
We recommend that everyone invest in some junk silver. In the event that the US dollar collapses because inflation renders it worthless, the silver content, particularly of the 90% junk silver, will offer the holder purchasing power that sacks of worthless paper currency will not.
Precious Metals as Part of Your Portfolio
If you have supreme confidence in the stock market and other paper markets, most experts still recommend that you hold ten percent of your investments in precious metals. If you are less confident in the paper markets due to the state of world economy, the massive debt held by the United States and most other industrialized countries and the rate at which fiat currency is being printed (in the US, over one trillion dollars per year), consider owning a higher percentage of precious metals.
Gold versus Silver
Most precious metals investors purchase gold and silver. In our experience, the purchase of platinum or palladium are far less common.
Customers want to know the ratio of gold to silver. We suggest 75% silver to 25% gold. Factors influencing this recommendation include the fact that silver is not currently being mined except as a bi-product of other metals like molebdimum being mined as a primary metal. There are also considerable industrial demands for silver. From being used in circuit board components to photovoltaic cells in solar energy, silver is prized for its maleabiity and conductivity. Silver is also reasonably priced and thus easier to invest in as a starting place for precious metals. Silver’s one downside is that $10,000 in silver will usually outweigh gold by 29 pounds at the current prices. Silver is significant quantities is heavy and cumbersome to store.
Storing Your Precious Metals
We always recommend self storage except in the case of Precious Metals invested in IRAs. A fireproof safe rated to 1400 degrees is the best but not foolproof protection.
How We Do Business
To the extent desired, we will spend as much time as you need to help you find the right precious metals product for you. Once you settle on the product and your desired budget, we will place a trade with our wholesaler. Prices are locked at the time you place your trade. If the price of your metal drops or rises, you have committed to the purchase at the time the trade is placed. Our relationship with the wholesaler requires that the purchase of the metals once booked be paid in a timely fashion. Once we place the trade, N.A.I.S. is contractually obligated to complete the trade. Failure to do so will irreparably damage our relationship with the wholesaler.
We make our money by commission on the trade. Purchases up to $50,000 carry a 2.5% commission. Purchases between $50,000 and $100,000 carry a 2% commission. Sales in excess of $150,000 are commissioned at 1% and sales over $200,000 are commissioned at .5%. We recognize that the customer has a numerous companies with which to transact precious metals purchases. If you are considering a purchase with another company, please compare prices with us. A shipping charge of $25 is included if you purchase less than 300 ounces of silver or 15 ounces of gold.
Once a trade is locked, you will send N.A.I.S. a check or cashier’s check. The form of the check will be dependent on the size of the purchase and as such, we may request a cashier’s check. Upon receipt of funds, we will pay our supplier. Upon the supplier’s receipt of funds, the supplier will ship your purchase to your address.
Selling Precious Metals
We can sell your precious metal for you. Our wholesaler will buy your precious metal based upon the market price at the time you are ready to sell. We can also try and arrange a private sale which will offer you a better price than our wholesaler while giving the buyer a better price than the buyer would otherwise pay to the wholesaler. We take 1% of the sale.
Once ready to sell, we either lock the price with the wholesaler or the private party. Like the purchase, the price is locked at the time. If the price of the precious metal rises or falls, the price is set. In a private sale the purchaser remits to us and the seller will ship the purchase. The seller bears the expense of shipping to the wholesaler or private party. We strongly recommend that you send any precious metals registered and insured. To protect the contents, pack the inside of the box so that contents do not shift and wrap the exterior with fiber packaging tape and insure that the corners are protected. When the purchaser/wholesaler receives the package and verifies the contents, then we release funds to the seller less our commission.