I am a 19 year old college student and a US resident. I recently got a job and am making $15/hr (which may increase) ~15 hrs per week. I live with my parents and have no expenses. I want to save/invest money for 2-4 years before I move out. I have always wanted to invest in precious metals (gold/silver) as a hedge against inflation. I have two semi-related questions:
- Would you recommend that I invest in physical gold/silver vs an ETF? The way I see it is that when buying myself from a dealer I pay 5+% over spot price, and would also be selling below spot price, while with an ETF the purchasing cost is much less (IAU/iShares gold trust with $15.67 billion in capital has an expense ratio of .25%). Given this information, why would anyone buy physical gold/silver?
Regarding taxes, the research I did has told me that in the U.S gold/silver has a unique collectibles tax rate of 28% no matter what, while my short term (<1 year) capital gains rate based on the chart below would be 10% or maybe 12% depending on the hours I worked.
So, if I were to invest in gold/silver, would it make sense for me to sell the holdings before a year, and then rebuy them so that I could take advantage of the lower short term rate compared to the collectibles tax rate? Is that allowed?