Gold Britannias Vs Sovereigns ( $100K worth )

IstilllikeZARcoins

I know a guy and he's looking to buy a fair quantity of gold/silver bullion ( approx $100K ).

He said that he would prefer golden 1oz britannias over sovereigns as obviously he will have less coins.

I have a few questions from him:

1) Are 1oz gold Britannias easily tradeable ? I don't expect them to be as liquid as sovereigns but is there a good market for them ?

2) What ratio gold/silver should this $100K portfolio contain ?

3) Are there any dealers that PCGS users can recommend ( preferably UK dealers as the guy is based in the UK ) who might have such stock easily available.

Many thanks,

ZAR

theboz11

If he is looking for liquidity, why not put it into an Gold ETF, Exchange Traded Fund.

Storage fees and ultimate goals are a consideration that makes the questions difficult for a ONE TIME purchase, so to speak.

Hussulo

Hi Marcel,

I haven't bought from them but I've heard they are reputable, have you tried:

http://www.taxfreegold.co.uk/

Stork

If he's looking for a bullion investment then he should buy whatever he can get closest to spot (krugerands or one ounce bars are even closer).

The sovereign would have more recognition than the Britannias... and like you say the Britannias would be less liquid. His worry about the #of coins I would not let bother me. Although he would have more of them, the sovereigns are smaller...it's all about the gold content.

I have purchased from the linked site (taxfreegold/chards)...an overseas transaction for me and I had a good experience. Their ebay operation was a problem as they would post photos of proof coins as (fully disclosed) stock photos to show design better, and their shipping was pretty high. I don't think they use ebay any more and I'm sure their UK shipping would be a much better deal. In any case, I have used them, I have recommended them before and I've never heard anything disparaging (other than the ebay issues).

As for a gold/silver ratio...up to him. If he's worried about storage the silver will take up more bulk. I haven't read the Gold/Silver thread on the liteside since page 323 or so (and its up over 370 pages now ) but there have been many discussions about the ratios in the past. It is something for your bud to do his homework on and decide for himself. Though if he wants to pay me for a recommendation I'll be happy to make one (up ).


Cathy

Gold thread linkage

Cruzi

Gold bullion coins are best bought in 1 oz sizes, allows enough liquidity without becoming to bulky.

Bars are a cheaper option but they are harder to liquidate than coins, bars must be assayed before a buyer will pay.

24 carat coins are also prefered option for bullion.


His best bet is to contact someone like the Perth Mint, he can buy gold at exactly spot, government certified holding, with government guarantee.

If he then decides he wants coins, they charge around 2% to turn his holding into coins.

But I question buying that amount straight away now, the boat has already sailed, he could be buying at the peak. Buying smaller amounts over time lessens any price shocks and equalises price.
The time to be buying gold was from late 80's till 2005, gold is in sell part of cycle.

Buy low, sell high does not mean buy high, hoping it will go higher.

trozau

Personally, I would not hold paper gold (I would rather have physical delivery). I believe gold is tax free in the UK for investments but you get charged capital gains tax when you liquidate. The reason for Britannia and sovereign preference is probably because they are exempt from this capital gains tax. On silver, I think UK charges VAT when you buy them but no other charges when you sell. Most PM folks believe that there will be a better return from silver than gold. Personally, I like gold better than silver and I do not like silver's bulk. Check out Chard's (Tax Free Gold) as he is a local source. Britannias have too much premium (IMO) for investment gold. Go with the sovereign. If you want some silver, go with 10, 20 or 50 oz bars. Hope this helps.

Cruzi

In Australia, gold that is less than 24 carat gets a GST applied at time of sale and capital gains on sale, 24 carat coins are tax free both at purchase and at sale.

I can understand how some people like a physical holding but look at the reality, you cannot store it in your home, you have to store it in a secure facility like a Safety Deposit Box or similar, so a paper holding leaves you with the same result, you own gold, just not in your home.

I totally agree with you about silvers bulk, 20 oz of silver = 1 oz of gold in value , more than 30x times the space is needed to store it. Silver pricing is closely linked to gold pricing, with many gold watchers using it as a portent to gold pricing, even though there are different pricing pressures.

trozau

<< <i>I can understand how some people like a physical holding but look at the reality, you cannot store it in your home, you have to store it in a secure facility like a Safety Deposit Box or similar, so a paper holding leaves you with the same result, you own gold, just not in your home. >>


The US quit honoring paper gold in 1971 when the world started demanding physical delivery. Who's to say that a company/mint issuing paper gold won't default on it or declare bankruptcy leaving the client with a worthless paper.

Cruzi

Thats why the Perth Mint has the government guarantee, if they won't honour it, the government has too.

The Perth Mint is also bound by law to actually have the gold it issues depository reciepts for, unlike the old way of only holding a percentage favoured by other countries.

The Perth Mint holds depositry reciepts for many countries as well as corporations and individuals, the security provided not just by the Mint and the West Australian Government is also reinforced by the security of Australia as a country.

The fly by nighters who sell the same holding to many people still do exist, but the Perth Mint is not one.

trozau

I think the Perth Mint offerings are pretty solid and if I lived in Australia, I may consider having some of my gold holdings in paper. I have actually recommended it to friends who preferred paper gold. I could just not go for it because Australia is so far from where I live.

Cruzi

Good point, I should also point out, most of my gold is physical as well, but I only buy a few ounces a year, if looking to spend a great heap at once a depository service is a viable option to be considered.

trozau

<< <i>The time to be buying gold was from late 80's till 2005, gold is in sell part of cycle.

Buy low, sell high does not mean buy high, hoping it will go higher. >>


I look at gold as a hedge rather than an investment. For those who do think of it as an investment, I believe the gold bull has still a ways to go. So long as governments keep printing more and more money, gold will just keep on going higher and higher preserving the holder's buying power.

Cruzi

I'll try to answer this without getting into a political discussion, gold has always been a hedge for me thats why (edit to add) multiple small amounts over a long time is what is recommended for such purposes. Others may have different aims.

If the US economy turns around and becomes the powerhouse it was during the 90's, there will be a big reduction in upward pressure on gold price and it is possible we will return to the undershooting of gold value again.
If current economic management continues, the bulls have a good arguement.

IstilllikeZARcoins

Thanks for your replies everyone - appreciated.

sonde79

i can't believe he is spending that much all at once with gold prices where they are. i wish him the best of luck... it might work out if he holds it long enough.

trozau

<< <i>i can't believe he is spending that much all at once with gold prices where they are. i wish him the best of luck... it might work out if he holds it long enough. >>


Could be fleeing from the paper markets to prevent further erosion of asset value.

SYRACUSIAN

<< <i>

<< <i>i can't believe he is spending that much all at once with gold prices where they are. i wish him the best of luck... it might work out if he holds it long enough. >>


Could be fleeing from the paper markets to prevent further erosion of asset value. >>






That would be a double mistake IMHO. I wonder why all these who think that gold has reached its peak don't sell their holdings and take the profit.