Are Silver And Gold Liquid Investments?

Gold and Silver prices have been on a tear lately, and are now slowly becoming popular with the general investing public. Since the great recession began in 2007, the price of gold has risen from $650 per ounce to well over $1200. Silver is another story, and although its investment gains haven’t been as dramatic as gold, investing in silver is gaining widespread acceptance.

Are gold and silver liquid investments? Imagine the following scenario: alone in your cubicle one day, you notice that the national credit markets are starting to crumble, and the gold price chart shows gold has just topped $1,500 per ounce. Because a crazy uncle has left you a suitcase of Krugerrands in his will, you’ve been tracking the price of gold for years, and right now seems like a great time to exit the market. In addition, you’ve decided to liquidate your silver wedding flatware, which has never been used and sits quietly in your attic next to your uncle’s suitcase.

So, you drag your uncle’s heavy suitcase down the attic stairs, recount all your the flatware and the coins, and check the financial news so you can verify your fat profits. The gold looks terrific: figuring that each coin is one troy ounce, your 250 gold coins are now worth $375,000. The current silver price looks pretty good, but you remember that flatware isn’t pure, so you set that aside for now.

After doing a few mental high fives, you set the case over by the door and call your bank to ask about their gold market info. This is a quick and immediate disappointment; banks won’t buy precious metals at all. Now, forced to think more creatively, you conduct a bit of online research and learn that you can sell the coins at any one of hundreds of dealers online...but it’s not immediate, like walking into a bank and walking out with money.

While your local dealer will likely offer the fastest transaction time, the worst part is that the commission could be brutal. Almost every small, local retailer takes at least 6-7% in commissions and fees. When you look at the numbers, you realize that this is tough pill to swallow; for your gold, this will add up to between twenty-two and twenty-six thousand dollars. Because gold is now at an all time high, you realize that these weeks might cost a fortune, especially if the dealer doesn’t give you a decent price, forcing you to go through the whole mail-in process again. Lower commission, but more waiting time.

Virtually every minute of every day gold and silver coins and bullion are being sold on Ebay for retail prices. This seems like an ideal way to divest of your bullion. However, fees on Ebay can also be excessive, running as much as 5% to 8%. Nonetheless, the ready pool of buyers available around the clock, either in the form of an online dealer, or a retail buyer on Ebay, does provide ample evidence that gold and silver are liquid investments.