There are those out there that will tell you that there are several gold investment options that are great because you don’t actually have you hold the physical gold, and I would caution you against listening further to these voices. Simply put, there are several gold investment options that don’t require you to take physical delivery of gold coins, rare gold coins or numismatic gold coins, but if you do not have physical possession of the physical yellow metal, you are missing one of the most important aspects of owning gold. Kevin O’Leary, who is also known as “Mr. Wonderful” on TV”s Shark Tank, owns physical gold, he sees it as a type of financial insurance, in fact, he kind of jokes around about cuddling up wit it at night in this interview. Also in this interview, he bemoans the idea of owning gold mining stocks. He comically talks about asking the gold miners why their profit charts don’t look anything like the charted price of gold, and suggests you will get all kinds of stories about unforeseen costs and setbacks. Smart shark, this guy.
While O’Leary does own gold ETF’s he coyly or mistakenly sees as real gold, he uses this option to quickly buy or sell to keep his gold exposure at a certain percentage. If you have as much money or as many streaming incomes as O’Leary does, then coming up with a financial strategy to hold a fixed amount of exposure to the gold market may make sense. Otherwise, saving up to buy gold bars online, or purchase a few rare gold coins or numismatic gold coins from time to time, hopefully when the price of gold coins dip, will probably be more the norm. Ultimately, owning gold bars and gold coins, whether they be of the rare gold coins or numismatic gold coins variety, or the newly minted gold coins variety, is a form of financial insurance, and what good is insurance if it is not available to you when you need it? This is one reason ITM Trading suggests holding physical gold where you can access it when you need it. Gerald Celente Of Trends Research Owns Gold Recently, I listened to an interview given by Gerald Celente. Gerald is well known for his economic interviews, as well as his newsletter on Trends Research. You may have heard him tell the story about how he lost a lot of money buying gold, it goes something like this… Gerald decided to buy gold contract futures, and Gerald was buying a sizable amount of gold. He placed an order with his brokerage to buy a certain amount of gold, at today’s prices, for delivery in the future. When you see the price of gold reported on the news or in the paper, this is exactly how they report the price: the wholesale price of a single gold contract (usually 1000 ozs) of gold for future delivery.
Gerald Celente likes to buy gold bullion on a wholesale contract for future delivery.
Gerald Celente’s Gold Purchase
So, Gerald decided how much gold he was going to buy on a future contract, and he placed his order. The next step was to fund the account that he was going to use to pay for this purchase, which he did, and he gave access to this account to the brokerage firm that he was placing his gold order through. Now, Gerald understood that at some point, the money would be withdrawn from his account, and that some time later he would be told that his contract was fulfilled. At this point, Gerald would have to call in his contract to be filled with physical gold, because most of these gold futures contracts are never delivered on, that is the holders’ of the contracts never take physical delivery of the gold, they just sell the paper contract back, hopefully at a profit. (This is one way that the price of gold is manipulated downwards; the mines can sell more contracts than they have gold, and this skews the supply / demand curve, but this is a subject for another article/blog.) Ultimately, Gerald was trying to buy the most gold he could in the least expensive manner possible, and Gerald knows what he is doing, or at least he thought he did…
Gerald Gets A Call One day, instead of hearing that his gold contract has been paid for, Mr. Celente gets a call asking for more money. “How can this be?” he wants to know. Gerald knows that he put more than enough into his trading account to pay for the gold contracts, and the price of gold hadn’t increased dramatically, so why are they asking for more money? This is what Gerald was told, in a nutshell. His brokerage company placed the order for his gold futures contract with MF Global, and they transferred the money to a segregated account (This means it was only Gerald’s money in the account) and gave MF Global access to the account to pay for the gold contract. Gerald did not know that his brokerage firm placed orders through John Corzine’s company MF Global, nor did he know that MF Global was broke and insolvent. Nor did Gerald suspect that Corzine would order segregated accounts to be raided for funds to pay the company’s outstanding debts, after all, that would be criminal, wouldn’t it? What Happened to Gerald’s Gold Purchase? Unlike you and I, Gerald’s voice is loud and well known in the investing and commerce world, and he had plenty of outlets to tell his story, and he did. Gerald’s gold trade was put on hold, any profits that he could have realized through his gold purchase evaporated when Mr. Corzine used Mr. Celente’s money to pay his debts. Also, by being rather vocal about his loss / theft, Gerald was able to retrieve.
Gerald said that he had been paid back 70% of what was taken from his account. Because Gerald never said how much was in the account, or how much gold he intended to purchase, we don’t know what a 30% loss equals, but my guess is at least $30,000, and probably much more. My other guess is he was probably paid back more and before others who had their accounts raided because Gerald was telling anyone and everyone he could about what MF Global and John Corzine had done to him.
Gold: If You Don’t Hold It, You Don’t Own It
What did Gerald learn from his unknown dealings with MF Global? Throughout the interview, Gerald repeated “If you don’t hold it, you don’t own it!” This is one reason why ITM Trading always suggests holding gold coins, rare gold coins, and numismatic gold coins privately where you can always get your hands on them. The same is true if you buy gold bars online, keep them where you can get your hands on them! Gerald Could Have Bought Physical Gold Through A Company Like ITM Trading Gerald could have purchased gold bullion or gold coins or rare gold coins or even graded numismatic gold coins through a company like ITM Trading, but he didn’t. He chose to go the cheap way and avoid any possible mark-ups or commissions. What he found out was that his money was more valuable to MF Global than his business was, so they took his money without conducting his trade! While stories like that of MF Global and Gerald Celente don’t happen everyday, they seem to be happening much more frequently. Had Mr. Celente called up ITM Trading to order gold bullion, we would have gladly taken his business and fulfilled his order. In fact, while Mr. Celente would have paid a bit more per ounce to do business this way, he would have received all of his gold, and much sooner. Had Mr. Celente done research into ITM Trading, he would have found that ITM Trading has never not fulfilled an order for gold bullion, rare gold coins, numismatic gold coins, silver, or any product, ever. He would have also found that ITM Trading has very reasonable market rates and costs for converting dollars into different types of precious metal products, and that ITM Trading also has an A+ rating with the Better Business Bureau. Lastly Mr. Celente would have found that Craig Griffin, Founder and President of ITM Trading, conducts business in ways far superior to John Corzine and MF Global!