would YOU make this hypothetical gold swap?
PreTurb
Posts: 1,193 ✭✭✭
Trade one kilo bar (32.15 oz) for equivalent value (28.47 oz) worth of 1/10 AGE's.
The math (using Tulving buy/sell numbers) at $1200/oz:
Sell kilo for -$10 under spot: 32.15 x $1190 = $38258.50
Each 1/10 AGE costs $120 + 12% = $134.10
Divide the second into the first and you would yield 284.66 coins (28.47 ounces).
The obvious advantage would be to have smaller pieces... but at the cost of 3.68 ounces! So, would YOU do it?
The math (using Tulving buy/sell numbers) at $1200/oz:
Sell kilo for -$10 under spot: 32.15 x $1190 = $38258.50
Each 1/10 AGE costs $120 + 12% = $134.10
Divide the second into the first and you would yield 284.66 coins (28.47 ounces).
The obvious advantage would be to have smaller pieces... but at the cost of 3.68 ounces! So, would YOU do it?
0
Comments
Then from the 6 total bars I have remaining try to trade here and there to accomplish the amount of 1/10 you want..........just a thought!
Personally, i'm not giving up 3.68 oz of gold on any trade!
MANY positive BST Transactions
That said ....... I would try to get them to trade the kilo for 300 1/10s.
They probably would not do it but it puts the ball back in their court ...
........ " how many will you trade for? "
Then , depending on the deal, buy up to the 300 count so you will have 6 full rolls.
I really feel that the future bodes well for 1/10 and 1/4 oz gold ....
.....and not so well for kilo bars.
Keep on stack'n
********************
Silver is the mortar that binds the bricks of loyalty.
I knew it would happen.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
I'd much rather keep the Kilo bar.
There must be other buyers out there who would be happy to get a kilo of gold for spot or a tad higher. Maybe you can start by trading down for 1 oz. coins and then go from there. The premiums on these 1/10 oz. coins may not always be this high. But the bottom line is will that premium for 1/10 oz coins continue to rise and rise or is 13% a resistance point? I would think that when gold gets stronger that kilo bar will be much more in demand than it is right now...and we're still a long ways from 2012 reporting.
roadrunner
<< <i>Personally ? NO !!!
I'd much rather keep the Kilo bar. >>
Same here. A gold Kilo bar has to be ubber cool. The tenth ounce AGE's aren't that big of a deal. After you've bought a few of them, they become uninteresting.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
6 say no trade;
4 say ok trade!
If you stack gold as purely an investment, then stick with the bar.....there will always be higher end dealers who will purchase it down the road. But if you stack gold as an insurance policy of sorts, with the possible intent of using your gold in a bartering type system in the future....SWAP IT NOW!
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Zero chance. No way. Not even. No. MJ >>
ditto
Would you swap a 100 oz bar for 3 kilo bars? It's about the same spread.
1.: There is a chance that the law may be repealed or significantly amended before it takes effect.
2.: If the law is not repealed or amended, and you sell the kilo after Jan. 1, 2012, only the profit above your cost is taxable, assuming you can prove your cost basis. If gold goes down, or you break even on the bar, you pay nothing in taxes.
Let's say gold is up $100 an ounce from when you bought it. Minus commissions at either end, you make about $3,000 profit. Figure what the taxes will be on $3000, and balance that against the guaranteed loss of 11-13% now if you swap just for 1099 purposes.
Keep the bar.
TD
I did the same with all my 5kg and 100 oz silver bars, but for 1 oz. gov't bullion. Did I lose a similar percentage? Yes. Do I regret the decision? Not a bit.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
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OTOH, the 1/10th ozers may not hold their premium forever as rr points out. The premium is easy to recoup when gold prices are healthy, but you can bet you will lose most of it if gold takes a dive. However, the same is true for the gold bar in terms of liquidity. If gold takes a dive, you can bet that the number of buyers at healthy prices for that bar will "evaporate", and the ultimate buyer will undoubtedly consider market conditions in his negotiating position. The advantage of smaller units is that you don't have to liquidate a whole position all at once and that is a big advantage if the market is volatile.
Bottom line, any transaction is going to reflect the current market, but more importantly - the more transactions, the more transaction costs. If you don't need the money now, it may be better to wait until you do, regardless of what the market happens to be doing.
You can always start buying 1/10th ozers (or other denominations) if you think that they are better for your purposes. I don't believe that the 1099 reporting requirement will ultimately have much impact, for various reasons. I have a mix of all denominations, simply because of how I think my cash needs will be - sporadic and in varying amounts. The premiums on coins always reflect quantity, and you can manage your costs somewhat by buying larger quantities of coins. I think having a kilo bar is a dumb idea in the first place unless it represents no more than about 5%-10% of your net worth or so. Any more than that and it becomes an albatross around your neck (a desireable one, nevertheless).
I knew it would happen.
32.15 oz bar is a big'un to me. Then again it's not even 2 rolls of 1 oz AGE's.
Loosing oz's is not my idea of stacking.
<< <i>No, not a chance, mainly because the 1/10 ounce coins would not be liquid at that cost (i.e. you would not be able to resell them at that price). >>
Incorrect.....people pay 12% over melt on 1/10ths all day long!
Not necessarily under those exact terms and not all 1/10 ozers.
Your Personality and view of how things are unfolding should help you with a decision.
From a pure value perspective, keeping the bar makes sense.
If you see things getting to a possible barter situation as per John Williams at ShadowStats, the
tenth ounces might come in handy. Also, under a ever increasing government encroachment,
the fractionals will help in flying under the radar.
Being that I read much about what is unfolding, and not much of it is good news,I tend to see the glass as half empty.
I would wince really hard and take the deal.
<< <i>Glad I found this old thread, as I'm considering buying one or more of these in 2013 . . .
1Kg Engelhard Gold Bar >>
Unless I missed it, this thread was discussing trading a kilo bar for a much smaller qty of 1/10th ouncers. What wasn't discussed was buying kilo bars in place of other alternatives.
If it were me, I would not buy a kilo bar as long as 1 oz sovereign gold coins were readily available (AGE's, Maples, Krugs, 100 Coronas, 50 peso, etc.). The premiums that these
gold coins bring vs. a bar are for the most part recouped upon resale. A $56,000 gold bar isn't the most liquid form of gold out there. The name Englehard + a serial number
are far from fool proof. But if you have to have the biggest one in your neighborhood, this will get you to the top.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
that's 5 thousand bucks
<< <i>ease of liquidity should be a major factor in determining which one to hold (AGEs for sure). I would compare buy/sell prices for both items at tulving or apmex for an idea of what premiums in your case would be considered "fair." >>
Agreed, liquidity is the biggest factor. For gold I try not to go above 1 oz increments.
Unless you really need/want 1/10th oz AGEs, I'd trade it into 1 oz AGEs/maples/bars instead. The premium isn't much higher than 5oz/10oz/1 kilo bars and they're WAY more liquid.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
OP, should have made his choice a long time ago according to date on original post
<< <i>Tuesday August 03, 2010 3:39 PM
OP, should have made his choice a long time ago according to date on original post
Thread was resurrected Saturday by a new member who was looking into buying a 1 Kg bar and concluded the 2 yr old posts recommended such action.
Hence the additional comments.
<< <i>Glad I found this old thread, as I'm considering buying one or more of these in 2013 . . .
1Kg Engelhard Gold Bar >>
Sorry....my bad. I erroneously concluded that you were considering buying a 1 kg gold bar. I'll refrain from commenting next time around.
at 1600 oz gold, the best your going to get on a kilo bar is : 32.15 x 1600=51440.00 (and your limited where you can sell it)
you can get 180.00 per 1/1oth oz all day long from several different sources 285 x 180.00 51300.00 (make sure you get AGE 1 /10ths as any other would be significantly diff in price)
No brainer
yes the premiums may change a bit for the 1/10th's, but Ill bet they stay just as high percentage wise as they are now Vs the bar.
A friend of mine who went with me to Baltimore , (doesn't care about collector gold) bought over a 100 1/10ths at 180-185 each. This area sucks for sales in gold bullion, eveyrbody is too cheap, but I bet I could place 50-75 1/1oth oz age in a day or two at 180 each.