Howdy folks,
I posted this originally on this board back about a dozen years ago during the PM bull market that ran from 2002 to 2011. Seeing that gold is up about 71% YTD and silver +147%, seems it might be appropriate to post an update. I've collected coins for 70 years and this is my third bull market in the metals. In that late 70s, during the Hunt Bros bull, I was finishing my degree (finally) in Econ on the GI bill augmented by a stash of 90% silver coinage I had bought out of change during a restaurant gig. The big bonanza from 2002 to 2011 was easy as I was working with self-manage retirement accounts. It was fun. Now, I'm retired and normally have our portfolios on cruise-control, but good golly, the bull is running.
As a qualifier, I've been suggesting a PM holding of 3-7% for decades as an investment. More than that is speculation, which is fine, but different.
First of all, physical bullion in your possession is the best of all possible ways to invest. Cripes, a roll of American Gold Eagles is about 2" tall and the size of a quarter in diameter. It's worth about $95,000 right now and you can stash it in the oatmeal box. A 100oz bar of silver is about $7700 and you can paint it black and use it as a door stop. Or you can buy bling, but not designer stuff. You don't want to pay a premium for the name.
Many of you, myself included, use self-managed retirement funds and taxable monies to invest and speculate. With the PMs, there are two ways of playing them - bullion and mining stocks. There are bullion ETFs but keep them tax-deferred or exempt as gains get hit at 28%. For myself, I will only deal with Sprott ETFs for bullion because they must have possession of the bullion before they can sell you shares. This is unlike most of the bullion ETFs which do not have this rule and can take your money and then go looking for physical bullion with which to back it up. Right now, acquiring physical bullion is an international problem, particularly silver.
The other way of investing is with the mining stocks. The gold and silver miners. Kitco has the best listing.
https://www.kitco.com/mining/mining-equitiesOf note is that over 70% of silver comes as a by-product of other mining - lead, zinc and copper. This is why it's hard to increase production to meet skyrocketing industrial demand. Some of these penny stocks are serious nosebleed stuff. That said, you can make a killing if you do your homework. While I own a few individual stocks [I just can't help myself], I choose to use ETFs that specialize in gold, silver, both, large cap, small cap miners, etc. Right now I'm riding SILJ, SGDJ, SLVR, PSLV, AND CEF.
Bias? Sure, I prefer silver to gold, although I am riding both. Silver has always exhibited much greater leverage than gold. In the Hunt Bros. bull, gold rose 3x, silver rose 10x. Same thing in the 2002-2011 bull and it's happening again right now. Why is this? I believe it involves that Gold Silver Ratio being artificial due to bullion having a paper price and physical price. Originally, I thought it was bullion ETFs, but now it seems to trace back to the 70's. There is also the supply issue which in the face of increased demand is huge. You've got Central banks and sovereign states buying and industrial usage has gone nuts. Feh, all this puts a bottom under the price.
BTW, an ounce of silver is now worth more than a barrel of oil.
and so it goes,
peace,
rono
Comments
Thanks for the kind words. Most of what I know about investing, I learned on this board from all the contributors, many who aren't with us today, may they rest in peace. Have some great and safe holidays.
Peace,
Rono
Any thoughts on the Aberdeen ETF SIVR? The fund's only holding is 100% Physical Silver Bullion.
I posted them on Off Topic 'cause last year someone complained about me posting here.
Hope you have some wonderful and safe holidays.
Peace
Rono
From what I see it's fine. There's some crazy stuff going on right now, so WTF knows.
Peace
Rono
Wanted to get back to you with a bit more time. First of all, I do NOT like paper bullion. I invest in it because it allows me greater exposure than I might otherwise have and I'm riding this bull. It's been an artificial device for some 50 years and created a bifurcated market with paper price vs. physical (street) price. Many are saying that this parallel universe is coming to an end as I write. I know that Shanghai closed over $80 an ounce while the 'paper price' set by COMEX, et al. was $71. Normally, the players would arbitrage the living stuffing out this but at this point in time, there isn't the physical silver available to ship. That devolves to the whole demand/supply issue but we can talk about that later. The issue is that if paper price and street price converge, what happens to the paper bullion investment products? This is why you want to be careful playing this bull market with only paper bullion ETFs.
Again, far better for countless reasons, to invest in hand-on physical bullion. Second best way is with mining stocks. Historically, silver trails gold and the miners trail both. The miners have been lagging. Who benefits if they ramp up production to meet the skyrocketing demand?
Explore mining ETFs. Bunches.
Be damn careful with any bullion ETF.
and so it goes,
peace,
rono
I've owned gold, platinum, and silver eagles for many years. But now I am wary of a correction and look to the ETFs for quick trades.
Funny story - Working at Walmart, I visited the "coinstar" kiosk daily to see what people left in the return slot. The coinstar machines rejected silver coins and people left them in the return slot. Thus, I have several shoe boxes of silver coins too. Once, somebody left me a 5 peso Mexican gold coin in the return slot!
High debt and currency debasement is the story for precious metals (for US and global). Gold:silver ratio fell to 57.28 (11+ year low) indicating that silver may have outrun gold too fast. Price targets for both gold and silver are wild. Goldminers (ETFs GDX, GDXJ, etc) figuratively have license to print money as their all-in average production costs are $1,569/troy oz (2025) and $1,715/troy oz (2026 est) – no wonder they are beating AI & tech. And unlike in the past, goldminers aren’t rushing to add capacity, but are paying off debt, doing buybacks, paying dividends (GDX yields 0.49%, GDXJ 1.02%).
Open https://ybbpersonalfinance.proboards.com/thread/975/weekly-business-digest-december-2025
Open https://www.msn.com/en-us/money/markets/silver-topped-gold-in-2025-it-s-copper-s-turn/ar-AA1T5wd6
Subscription https://www.barrons.com/articles/silver-gold-copper-prices-fa6736e1
If I can find that old 1 ounce silver bullion coin rolling around in the junk drawer I'll attempt to garner enough from it for a good bottle of scotch.