Wow, reading all these comments make me feels like it's a bad idea to invest in silver.

Its a great idea to diversify your investment, but it is the worst idea to overpay on metals.

It's the exit game plan that I'm worried about. Although I'm expecting to hold it for long.

... been there, done that. No one wants my 250oz of silver unless I sell them at spot. And due to drop in spot I incurred more than 40% loss in paper value.

So happened someone wish to trade his gold for silver when GSR was above 60 thus I quickly did the swap. And now my gold is only 8% underwater which is not too bad

I usually buy small pieces like 1oz-10oz. What do u mean by underwater? Do u still buy any physical gold/silver now? Or totally keep ur hands away from metals...

Do u guys really believe/think that the fiat currency will crash one day?

Underwater = my metals are now worth below my purchase price. In other words it means I'm in red.

I still buy physical gold at every $100 drop in spot. For silver I buy only numismatics and ongoing series... more as a hobby than investment.

I do believe USD will lose its world reserve status soon.

This post has been edited by yrh0413: Nov 5 2013, 10:30 AM

Haha. That means my metals are currently underwater too. Btw, I just started PM investment recently in aug. I'm ok to hold it for long period as I'm using it to hedge inflation or in case, currency crash do really happen one day.

Hi all sifus,
I add in more comparison to see how much spread if i buy it over local seller (e.g. BSM) Vs from manufacturer (Scottsdale):

4th Nov 21:18

Kitco 21.8 USD/oz
Silver spot as on BSM 70.7 RM/oz
Currency rate as on BSM 3.243 RM/USD
Maybank currency 3.137 TT (RM/USD)

10oz
Scottsdale USD 242.25 RM 759.82 (Maybank TT)
Spot price USD 218 RM 683.757
% over spread (Scottsdale Vs Spot) 111%

BSM (RM/10oz), with delivery 812.53
% over spread (BSM Vs Spot) 119%
% over manufacturer (BSM Vs Scottsdale) 107%

It looks different now.....

Note: Not consider the courier price from Scottsdale to KL (which is quite significant)...

Summary:
Looks like Scottsdale has a 11% over spot;
BSM has a 7% over Scottsdale (not consider delivery cost if buy direct from Scottsdale);
BSM has 19% over spot
So, holding physical silver at this moment in Malaysia is relatively expensive.... would this cost be more favorable in future? I think this is the key to evaluate is it worth continue invest in physical silver.....

This post has been edited by XtraLeoGecko: Nov 5 2013, 12:10 PM

Dear all,
I am very happy and gratitude to all who has constructively shared facts and experience in this subject ... and hope all continue to do so and discussed professionally and remove all the negative "chi "....

If the price of silver goes up, it'll cover the premium right? Maybe the question that one should ask is will it goes up to the price that can cover the premiums + profit? It's like some expert says, PM investment is more to "buy, hold, and pray" kind of investment. Ur money isn't working for u.

But I will continue to buy small amount of silver monthly. How much is 1-2 oz worth? Probably around rm160. I will spend it on shopping or a decent meal anyway. And the rest of my money will divert to other form of investment.

This post has been edited by hey_there: Nov 5 2013, 12:34 PM

XtraLeoGecko your calculations are flawed. Scottsdale Silver does not do international shipping.

Current spot price at 12:42pm is $21.64...

10oz Scottsdale bar is going for $245.52. Premium over spot is $29.12 which is 11.86%.
Same bar at BSM is going for RM805.78. Premium over spot is $39.61 which is 15.47%.

If you order only 1 Scottsdale from any International dealers, you will never get a good price as there will always be a minimum order quantity and the shipping gonna kill you.
For your case getting from BSM is the cheapest option although you are paying a high premium for the bars.

Premiums will go down if there are more dealers in the market, and large local demands for silver. Else you will always be slapped with this huge premium.

As per my calculations above, upon purchase you already "lose" 15.47%. If silver spot rise above 15.47% you breakeven.
My friends in Singapore shared with me... when silver surged during 2011 dealers offered % below spot as buyback, when silver dips they offer spot as buyback.
So if silver rise 15% you might still be at a loss if you were to sell your silver by then... and no guarantee that the dealers will buyback from you.

If you are OK with the premiums then no harm to stack on. But for RM1000 on silver you might want to have a second look on the premiums for 5g gold.

Yea, 5g gold is also in my wish list. Hehe. But as for now, I will only allocate <200/month for PM investment. Maybe I'll stop buying silver for 2 months and buy the 5g gold instead. I'm ok with the premiums as I expect to keep it for long for 10-20 years. My only concern is who to sell to? But think positively, u won't know what ppl's perception on silver after 10-20 years. The gold silver ratio is 1:60 now and if it is 1:20 (don't ask me why 20, just simply pick a number ) ppl might hoard silver like gold too. If it really happens, it'll be easier to sell silver then.

I have similar thought. ... would trade paper gold but hold physical silver. .... as silver has more upside than gold in my investment horizon of 5-20 years. ... merely a diversification tool to hedge against inflation n paper money. ....

For silver I only keep numismatics because they have interesting designs and their value is based on market demand and at times has no connection with spot prices.

Recently bought a coin for $160 and it was traded on eBay for over $300...

I keep gold as long term investment but that also I selectively keep semi-numismatics like gold panda. Premiums are slightly higher than normal gold bullion.

At least I know 10 years later if gold rise and falls to $1300 my 10-yr old gold panda will worth more than just spot

I might want to stop paper gold and go for physical gold instead. The spreads are too wide for me. I will buy more to lower down my average cost and sell all either at break even price or small profit. Gonna buy 5g or 10g gold...

Is it easier to sell for physical gold with better margin comparing to paper gold?

CIMB is having a selling/buying diff of ~4.3%. What are the reliable channel to sell for physical gold?

In Singapore one can sell gold at spot to any pawnshops, sell at spot to dealers, and sell premium + spot to other stackers. Gold is better than silver when it comes to liquidity.

Does pawnshop in Malaysia takes gold at spot?

If CIMB spread is around 4% then it is similar to holding physical gold.

Physical gold is easier to sell. Can sell at pawnshop, poh kong etc. I took my gold chain and shop for better selling price from shops to shops.

What I'm worried about paper is that banks might increase their spread when price is up. It's up to them to put any price they want.

What's the buyback rate for pawnshops in Malaysia? spot or below spot?

Seriously, I don't remember. The last time I sold my gold chain was about 10 years ago. I remembered I walk a few shops and sold at the highest offer.

1 thing for sure, jewel4cash offer the lowest price. Even small pawnshops at masjid India can offer better price.