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Survival Guide to Precious Metals

By Drew Rathgeber

Survival Guide to Precious Metals

INDEPENDENT. OBJECTIVE. RELIABLE.

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For nearly a decade I’ve personally been working as a Series 3 licensed commodities broker. However,

I started my career working in the physical cash spot market selling precious metals coins & bullion

products to the general public with one of the Nation’s largest bullion dealers. It’s this experience I’ve

drawn from to come up with this ‘Survival Guide to Precious Metals’ to help protect you from the many

pit-falls new investors make and try to teach some of the complexities in precious metals. If you are a

skeptic or have questions please feel free to contact me directly at +1 (312) 706-7657, Drew Rathgeber.

DON’T BE DUPED!

1. Know and understand the regulatory landscape. The physical cash bullion spot market is mostly

unregulated; therefore many precious metals schemes and marketing tactics may be used. The

Futures Industry is regulated by several Regulatory Agencies, such as the National Futures

Association, The Commodity Futures Trading Commission and the various Exchanges on which

futures products are traded. These Regulatory Agencies help ensure integrity of the markets.

2. Speak to a Series 3 licensed professional that’s registered with the National Futures Association (NFA) when it comes to investing in precious metal futures products. Know the difference between the physical cash market and the Futures market.

Some of the advantages I feel the Futures markets have are listed below:

• Physical Storage Audits

- The bars are audited by the CME Group and published.

• Regulated Exchanges

- Exchanges have CFTC oversight; everyone plays by the same rules.

• Almost 24hr Markets

- Mon-Fri Open 6:00pm – 5:15pm (Closed 45 min. each day)

• Tax Implication

- Short Term vs. Long Term Capital Gains -1099B

Survival Guide to Precious Metals

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• Regulated Market Price

- Highest volume and liquidity in the world, true price discovery.

• Spreads

- Typically much smaller offering significant savings.

• Trading Commissions

- Significant savings offered, when compared to the physical cash market and 100% transparent

in Futures.

SPEAK TO A REGISTERED AND LICENSED BROKER.

3. Get to know your broker and ask them about their background. I suggest you choose an

experienced broker who has been registered for more than 5+ years. You can easily look up a

brokers’ registration status using this link: https://www.nfa.futures.org/basicnet/. Remember the National Futures Association (NFA) is a self-regulatory body designed for consumer protection. You can also use Smart Check on the CFTC.gov website here: http://smartcheck.

cftc.gov/check/.

4. Use caution if purchasing rare numismatic, or any specialty coins. Quite often these products

carry the highest premiums and spreads putting you at a disadvantage. These premiums and

spreads are hidden costs. I do not recommend rare numismatic specialty coins for general

investment purposes. If you do purchase these products consider yourself a collector. These

products are the profits centers for most bullion dealers; an unlicensed and inexperienced

sales rep may persuade you into these products for their own personal benefit not yours.

Survival Guide to Precious Metals

INDEPENDENT. OBJECTIVE. RELIABLE.

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KNOW THE RISKS!

5. I suggest not using any type of loan or financing when purchasing bullion or coins. If leverage

is what you seek, then I highly recommend using the Futures markets. Realize leverage comes

with a higher degree of risk; however, Futures may offer significant cost savings versus using

loans or financing in the physical cash market.

REMOVE YOUR EMOTIONS AND CUT YOUR LOSSES.

6. If it sounds too good to be true, then it probably is. Use caution receiving investment advice

from unlicensed and unregistered individuals.

7. Use caution if trading other instruments like, Exchange Traded Funds (ETF’s) or Mining Shares,

quite often these products don’t follow Futures bullion prices. Furthermore these are paper

based instruments, for instance the GLD & SLV Exchange Traded Funds (ETF’s) may not be

exactly what you think they are. Make sure you read the prospectus.

8. Be wary of any unregulated precious metal dealer offering you storage or bank depository

storage. These storage facilities often come with high carrying costs, often based on the value

of the asset, financing charges, service fees, and high spreads that may eventually create equity

losses. Know your cost to carry; this cost will probably shock you. Another example of why

Futures are advantageous versus physical spot cash transactions.

9. When purchasing or selling in the physical cash sport market, which is not traded via centralized

exchange, you are bound by their fee structure and, market prices. This may carry a higher

degree of risk for the retail trader.

10. The information landscape has changed dramatically with the internet; anyone can pop-up

with a website or blog offering investment advice. Often these individuals may be unlicensed

and inexperienced. Be especially careful of anyone mentioning a track record or anyone saying

“I called the top in 1980” or “The bottom is in; prices are going higher” these tactics may be

designed to manipulate you to buy their service.

Survival Guide to Precious Metals

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DO NOT GET EMOTIONALLY INVOLVED!

11. Remove your emotions, think logically, and do-not run into a transaction out of fear! Analyze

your psychological make-up. Precious metals investors (Gold Bugs) can be some of the most

emotional investors, and quite often these emotions may end up creating losses.

12. Another tell-tale sign I look for is that someone who is unregistered or unlicensed will not

disclose the correct ‘RISK DISCLOSURES’ at the bottom of their website or marketing material.

See examples at the bottom of this page.

This is just a brief overview of some things to be on the lookout for. I know Futures can seem intimidating

at first, so I’ve written many eBooks on this subject matter.

Beginners Guide to Gold Futures

http://www.danielstrading.com/offer/futures-basics-essentials-the-beginners-

guide-to-trading-gold-futures/?brokid=222

Beginners Guide to Silver Futures

http://www.danielstrading.com/offer/futures-basics-essentials-the-beginners-

guide-to-trading-silver-futures/?brokid=222

Beginners Guide to Trading Gold & Silver Options

http://www.danielstrading.com/offer/options-basics-essentials-the-beginners-

guide-to-trading-gold-silver-options/?brokid=222

Gold Exposed: Spot vs. Gold Futures

http://www.danielstrading.com/offer/gold-exposed-spot-gold-versus-gold-

futures/?brokid=222

Survival Guide to Precious Metals

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Lastly you can visit the CFTC Fraud Advisories regarding precious metals webpage.

Hope this helps and if you have any questions regarding precious metals please feel free to contact me

directly at 1-312-706-7657 or email me drathgeber@danielstrading.com. I’m here to help.

Drew Rathgeber

Senior Broker and Market Strategist

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Survival Guide to Precious Metals

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DISCLAIMER

THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.

THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.

YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE “RISK DISCLOSURE” WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.