Hello Friends! Today we’re going to discuss the topic of Selling Gold. As a quick market review, in middle July 2013, the gold price is currently finding a bottom of the somewhat painful and protracted correction that struck from its 2011 high at ~ $1900. Over the past two years, gold hit its low (thus far) at around $1200 in June of this year. The saga continues as we form this bottoming process. Have we hit the low already, or is there more “low” to come? No one know for sure, but I can assure you that, regardless of the price bottom, we will be hitting new highs in the future. Take a look at this weekly gold chart:
Sell Gold High
You’ll notice the ups and downs, rises and falls that any market will demonstrate. When investing your hard-won cash, you need to do a little self-exploration in order to be successful. First off, you figure out whether you’re a “trader” or an “investor.” A trader is one who will complete frequent buys and sells of an item (one who does this many times a day is called a “day trader”). These individuals must be very “market savvy.” They must have a system and are, more than likely, highly proficient chart readers. To be a successful trader requires quite a lot of dedication and typically costs a fairly high tuition to the college of investment; in other words, they lose money while they’re learning to trade. Investors on the other hand will not trade as often, and sometimes don’t ever. It’s still takes some homework to be a good investor, and as always, I encourage you to do your own research as no one, no one will be as concerned about your welfare and your finances as you are. Whether you are a trader or an investor, there is one main rule to follow. Here it is:
Buy low; sell high
What’s that you say? Oh, you’ve heard that one? Well, you’ll be happy to know that this is one of the only rules that you need. Actually doing it, though, is not so easy. Looking at the chart again, traders will see many places where they could have sold high and bought low. Even more, if they were looking at a daily chart. For you investors out there, I want you to look at June of 2011 and then read this quote.
You buy when weekly prices looks like a fishing line. You sell 1/3 when weekly prices looks like a Rhino horn.
Cut this out and paste it on your computer. Let us call this the “Two commandments in Precious Metals.”
- Jim Sinclair
If you don’t know who Jim Sinclair is, you should run over to his site and check him out. He is one of the greatest proponents of gold around today. He’s a blue blood of the investment world, and he called the 1980 gold top, telling his followers to when to get out. He promises to do the same at the next top. He’s a good guy to have on your team. Make sure you come back here to finish the article!
Be you a trader or investor, it is wise not to fall in love with your investments. That’s a hard thing to do when dealing with gold, but what’s the point of buying gold, riding a tremendous bull market to its peak, and then giving away all your profits when the price turns bearish again. As sure as this bull market will continue and reach new highs, the bull market will end someday and you don’t want to have much of your gold left.
Getting back to the quote above: Do you see the rhino horn in the chart? Had you sold a third of your gold there, you could have bought it back at lower (maybe much lower prices). You would have had to contend with tax ramifications, of course. [Read about Gold and Taxes], and you probably wouldn’t have sold at the high, and you probably wouldn’t have bought back at the bottom. I was sure the low was in several times during this correction, only to watch price go lower, but the more gold that I purchased will be going higher than before.
To Sell Gold
Whether you’re selling gold coins, selling gold jewelry, or selling scrap gold, the rules are pretty consistent. Right now – in mid-July 2013 – the main rule is – WAIT!. Remember rule #1 above. Price is low now; low = buy. The Selling Gold Prices will be rising, and unless you need the money right now, wait.
Selling anything in a rampant market – and believe me, this gold market is going to get crazy – is a risk. The main risk is being out of the market because it seems like the largest moves up are the ones that occur after you sell. For that reason, you don’t want to sell your stash all at once. Even if you’re going to sell a third of your gold, sell it a portion at a time. Divide that third into parts and sell those parts at rising price levels – every $25, or $50, or $100 rise – it depends on the market conditions, of course.
If you have scrap gold that you’re intent on parting with – gold jewelry or gold items that you think have value, you definitely want to check out our two articles, The 24K Gold Price and Cash for Gold.
Where to Sell Gold
You’ll be happy to know that your LCS (Local Coin Shop) or just about any online dealer will purchase your gold from you. If are selling coins or bars, do not go to a gold for cash joint as they will give you only a small percentage of your gold’s worth. [If you are selling gold jewelry for cash, you probably won’t have an alternative. Do your research on these establishments though. There may be a big difference to how much one shop will pay you compared to another.] Check around to see what a dealer will pay for your gold. If dealing online, check into shipping costs, insurance, and any other policies they may have regarding the sale that might affect your bottom line profit. Also, make sure you clearly understand how the dealer wants the gold shipped. It’s very important to follow all instructions. One advantage the LCS has over an online dealer is that, depending on the amount of gold you want to sell, the LCS may pay you in CASH for your coins or bars. In this day of endless government information collection, many find solace in the anonymity of a cash transaction. Of course, you will still be obligated to report the sale on your tax return. Check out the Gold and Taxes article.
Did I miss anything regarding selling gold? If I did, please click on CONTACT above and let me know. Please share your comments and questions. We all learn more that way. J.