would YOU make this hypothetical gold swap?

PreTurb

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?

gsa1fan

I could not loose that much personally.

cjmezz

I would start by downsizing the Kilo to (2) 10oz bars, (2) 5oz bars, and (2) 1oz bars = 32 total oz......-.15oz

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!

SilverBaron

Ok ......... I would.

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

jmski52

An 11% spread between 1 kilo vs. 1/10th ozers seems to be at market, especially when you consider that you would otherwise have to undergo (2) separate transactions in which the total spread might be greater. Fair trade, imo.

ProofCents

I bet in 20 years you'd come out ahead with the 1/10's

zrlevin

I would probably trade the kilo for 300 1/10s.

mrearlygold

No !

BBQnBLUES

Personally ? NO !!!

I'd much rather keep the Kilo bar.

roadrunner

And give up 13% in gold? I don't think so. But I understand where you're coming from.

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

PerryHall

<< <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.

PreTurb

so far:

6 say no trade;
4 say ok trade!

gecko109

Nothing beats the "coolness" factor of owning a kilo gold bar. Nothing beats the "divisibility" and peace of mind of having 285 tenth oz gold eagles though. I would do the deal for that steep cost of losing 13% of your gold. You make up for that loss by switching to a unit that is 1000% more saleable to the masses. I might be able to count on 1 hand all the individuals that I know who could afford to buy a kilo of gold in 1 crack.....but there isnt a single person in this forum who couldnt afford a 1/10th oz eagle.

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!

Justacommeman

Zero chance. No way. Not even. No. MJ

OPA

<< <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.

CaptHenway

If your main concern is the 1099 reporting law that kicks in Jan. i, 2012, consider this:
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

1jester

I guess if you're in a location where you can be guaranteed to have a ready purchaser of the kilo bar, keep it. But for peace of mind, I wouldn't mind losing a couple ounces just to get marketability down the line. I have to echo what a few others have stated: it might be wise to ditch the big brick now.

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.

mkman123

Yes I would do it. I want something that I can sell quickly and also if I needed the money, I could sell a few 1/10ths to get what I needed instead of having to sell a whole kilo. If I needed a few thousand, I could sell some 1/10ths to get the money and still keep some gold. If I only have a kilo bar, I can't cut it in half. I need to sell the whole bar just to get the few thousand I need.

Steve27

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).

jmski52

The kilo will have to be liquidated in one transaction at some point. Most of your financial needs will probably not require the equivalent of 32.15 oz. of gold. It's merely a timing issue.

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).

gsa1fan

If you can afford a kilo gold bar. Surely you should be able to stack several oz's of 1/10 oz coins on top of that.

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.

gecko109

<< <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!

tydye

For the future it would probably make sense to have smaller denomination gold such as 1/10oz. But if I owned a kilo bar there is no way I would let go of it unless I was standing in a bread line

TWQG

I would favor smaller sizes over the Kilo.
Not necessarily under those exact terms and not all 1/10 ozers.

sbeverly

I don't think that this is a one size fits all.

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.

cash4gold

KEEP THE KILO!

roadrunner

<< <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.

derryb

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."

streeter

heck no.

that's 5 thousand bucks

percyb

I'd try to swap evenly otherwise I wouldn't do it at all.

Pokermandude

<< <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.

derryb

Quarter oz. AGEs are ideal for most stackers. Tulving will probably do a swap, do the math on their buy and sell prices

2ltdjorn

wish i had these problems

jmski52

Anyone here willing to buy a 1 kilo bar without getting it assayed?

derryb

as gold goes up and risk with these bars increases it will become harder to find a buyer. Time is not on the OP's side.

gsa1fan

Tuesday August 03, 2010 3:39 PM

OP, should have made his choice a long time ago according to date on original post

roadrunner

<< <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.

gsa1fan

I missed that RR

roadrunner

<< <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.

jdimmick

I disagree :

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.

KUCH

If you need extra liquidity I would go for the deal. Any possible way to trade for 1/2 oz to minimize premium might be a thought.