According to the coin dealers I have done business with, Federal Law requires dealers to ask for ID and write down on a special form the name and address of all individuals buying precious metals with cash.
As current head of the federal government, Obama wants to know.
So what’s the number of that “special form?” I want to look it up to see what it looks like and what the reporting requirements are. Note, however, that this is completely irrelevant to the OP, as he’s Canadian.
A feller on the radio the other day was saying that you’re better off buying gold funds than buying physical gold. If/when the bubble breaks, you could lose a lot more trying to unload your physical gold possessions at a dealer rather than having a broker move the money out of the gold funds. I don’t have any gold so it’s all the same to me but it makes sense; the dealer is going to pay you under the value to begin with, plus probably undercut more if the market is tanking plus the time it takes to actually get your coins to find a guy to make an appointment to buy them could cost hundreds if the market is rapidly sinking.
Unless you’re planning on going all Mad Max and bartering gold bars for sheep and moonshine once civilization collapses, what are the downsides of gold funds?
All I can tell you is that if one refuses to show a proper ID, the dealer will not sell you the gold.
I’m not a coin dealer; how can you expect me to know the number of some government form?
Call a coin dealer and ask. Providing they are licensed and are doing business according to the law, they might tell you about the form you are wondering about.
I always use a credit card because I get cash back which makes the gold even cheaper, but I was in line one day behind a guy who wanted to pay in cash and heard him and the dealer going back and forth about producing ID. The guy finally pulled out his drivers license and bought the gold.
perhaps samclem can comment on this issue of id?
To be clear, this is for CASH purchases only. I’m never asked for ID when I buy with a credit card. But the government can track CC purchases easily.
I’m in California, but I was told this is a Federal issue so it shouldn’t vary state to state.
It may vary depending on how a particular coin dealer feels about enforcing the law.
I’ve been doing Google searches to identify what reporting requirement there is when purchasing gold for cash. The sites I’ve found said that the US government does not require that one report gold purchases for cash, except when you’re buying more than $10,000 worth. The IRS instructions for Form 8300 do say:
“A business must file Form 8300 to report cash paid to it if the cash payment is:
Over $10,000,
Received as:
One lump sum of over $10,000,
Two or more related payments that total in excess of $10,000, or
Payments received as part of a single transaction (or two or more related transactions) that cause the total cash received within a 12-month period to total more than $10,000.”
So perhaps the dealers from whom you’re buying gold are tracking your purchases in case they exceed $10,000 in a year. But that’s not because they’re interested in your gold purchases but because they want to know if you’re laundering money.
BTW, that Form 8300 is related to the Currency Transaction Report required as a result of the Bank Secrecy Act of 1970, the Money Laundering Control Act of 1986 and Title III of the USA Patriot Act of 2001. Note that Nixon, Reagan and GWB were president when each of these laws was passed, so it’s more than a little disingenuous to say that “Obama wants to know exactly who is buying gold and where they live.”
There is no Federal law requiring you to show an ID when you purchas gold.
The $10,000 US cash reporting act would be the only thing in play there.
Whenever this comes up on “Money Talk” Bob Brinker points out every reason NOT to own coins (unless you’re a collector) and bullion…which has been well pointed out by previous posters.
He suggests the ETF that’s labelled GLD.
Boom! You’re indexed to the price of gold and you don’t have to pay someone to store it.
You don’t shop I presume.
He’s correct. Altho in some cases, they are required to log cash sales of $3000 or more. But there’s no gov’t form.
Just FYI dudes- do NOT, ever, try to get around the $10000 reporting limit. Don’t split up deposits or purchases, etc. No one really cares about a CTR or 8300. But when you try to get around a CTR, they file a SAR, and that’s bad news.
The act of splitting cash transactions to get around the reporting requirement is a crime in of itself. Don’t be stupid.
A few additional notes:
(a) try to find the dealer who has the lowest spread between what he will sell the bullion for and what he will buy it back for. (If a particular dealer is not in the business of buying bullion back, it’d seem to be a strong indication that he’s a tout and/or that his sale price/load over spot is excessive). I went searching awhile ago and without totally recalling my thought/research process, I ID’d this site (I’m not affiliated, don’t receive commission) as a fairly transparent, low-spread option. The thing to keep in mind is that even a non-scammy dealer has to make a profit (commodities brokers, like bookies, generally are agnostic as to the underlying price and make their money by being (vast oversimplification) roughly balanced between one “team” and the other (buyers or sellers here), with their steady profit coming off the spread/vig).
IME and others can correct me, it is difficult to get the spread down much below the low single digit percentages (that is, if you bought a K-rand and sold it back the next second to the same dealer, and gold hadn’t moved in that second, you’d lose, I dunno, 6%+/-). That’s a fairly hefty transaction cost vis a vis ETFs, common stock, etc. (where you could buy $10k worth on Ameritrade for a tiny fraction of a percent load, i.e., $9 or whatever they charge per trade).
(b) Be aware that not all forms of gold move in tandem with the spot price of gold. Bullion price increases/decreases/premiums/discounts (well, there aren’t really discounts for a pure commodity) do not map corresponding increase/decrease/premiums/discounts in collectible gold coins, ETFs, mining stocks, gold certificates. At different and somewhat unpredictable times, for instance, mining stocks may move up much more rapidly, or less rapidly, than spot bullion, and/or you will hear people telling you that numismatic gold coins are a great “bargain” now because they’re only 10% above bullion price per ounce and have been 1000% above at other (perhaps also anomalous) times in the past. No one (AFAICT) can predictably predict the ratios between various forms of gold “ownership,” let alone the underlying direction of the metal. The gold market, shall we say, also stirs strong emotions and hence not-rationally-based pricing from time to time.
© You can buy those fractional bullion coins (those who believe we may need gold as an alternate form of money in the End Times, and let’s not debate that here, point out that small gold coins, or even common silver/gold “junk” coins, will be more practical means of exchange than trying to get change on a $2k Maple Leaf). Be aware though that premiums on the fractional bullion will be considerably higher (and spreads may be too) than on the big coins/bars. I.e., a 1/10 oz. Eagle will run you well over 10% the price of the one ounce, IME.
(Bolding mine)
Could this have something to do with the similar requirement of banks to report cash movements of up 10 000 $ (or whatever the border is) … because in the US apparently large sums of cash point towards drugs or other kinds of illegal crime? Because the price of precious metal is high, buying a lot means a lot of cash.
Oops.
Actually, you’d want a fund which invests in mines where gold is made, because that will stay after the bubble.
If you want a fund because you are already anticipating a bubble bursting, then you are still wasting your money expecting a hit, only instead of loosing most of your money, you loose only part of it.
A good investment however is one where you don’t expect to loose in the near future at all.
As Martin Hyde explainsin detail in the other thread, a fund is managed, so you have to pay the manager (plus some other costs). If the revenue is lower than that fee, you loose long-term.
And bartering only works if the civilization is not totally collapse. People will accept Gold if they believe that everybody believes it’s valuable. If civilization is gone, people will accept things with an inherent value like an apple or a cigarette, not something that depends on having a value assigned to it.
In addition, outside civilization gold is great for tampering with (Terry Pratchett’s funny, easy to understand and fact-based Discworld novel “Making money” describes an ex-con man who spent his time counterfeiting gold dollar coins by clipping, shaving and other things - removing and replacing part of the gold with something else.)
If you barter a bar of gold with a bearded fellow, how do you know that the gold is pure, and not diluted? Do you pull out a test kit every time? (Do you have the necessary experience with one?) Do you go to a Jewelers for assaying? (Do Jewelers still exist in Mad Max world, or won’t they be robbed first?) If you want to barter for one apple, a gold coin is too much; a whole barrel of apples might be too much for you to eat before they rot.
Remember, fellow Dopers- it’s *Buy Low, Sell High. *
true, but that isn’t what makes the (investment) world go round! 
A few years ago, shops that buy gold began having to report that to the tax folks… so that they can catch the sale, just like with stocks.
Can you be more specific. We spend over one million dollars(US) per week buying gold from the public. We don’t have to report anything to any “tax folks.”
There is a Federal reporting requirement on sales of 25 ounces of gold(Krugerrands/Canadian Maple Leafs), but it excludes American gold eagles.