Swapping gold bar for generic coins
Yorkshireman
Posts: 4,583 ✭✭✭✭✭
An acquaintance of mine contacted me for advice. He wants to trade a very large gold bar for bullion gold coins.
That makes sense to me. Does it to you? To whom should he talk for the fairest deal?
Yorkshireman,Obsessed collector of round, metallic pieces of history.Hunting for Latin American colonial portraits plus cool US & British coins.
0
Comments
I would say that it depends on the terms. A large gold bar is not always easy to sell.
If he has a PM refinery in his area it wouldn't hurt to check with them.
Good chance they could trade for coins or smaller bars.
Well, bullion coins would certainly be more widely accepted, more easily authenticated, and liquid.
How many ounces are we talking about? Generic no-name bar, odd size? Self made from scrap?
If it's something relatively common like a Pamp Suisse bar, I'd sell it to one of the big dealers like APMEX. They'll authenticate it, and they'd also be able to sell him whatever form of bullion he'd like. If it's something uncommon, he's going to need to call around and be prepared to pay assay fees.
This.
Did that bar come from a shipwreck ?
It would be easier to barter with gold coin than chipping away a portion of a bar.
BST transactions: dbldie55, jayPem, 78saen, UltraHighRelief, nibanny, liefgold, FallGuy, lkeigwin, mbogoman, Sandman70gt, keets, joeykoins, ianrussell (@GC), EagleEye, ThePennyLady, GRANDAM, Ilikecolor, Gluggo, okiedude, Voyageur, LJenkins11, fastfreddie, ms70, pursuitofliberty, ZoidMeister,Coin Finder, GotTheBug, edwardjulio, Coinnmore, Nickpatton, Namvet69,...
It depends. How large is this gold bar? Is it marked by a major refinery such as Johnson Matthey or Engelhard? It may be easier to just sell it and use the money to go shopping for gold coins.
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
all I know is that each time a trade is made there is a cost, so it doesn't make sense to me to make multiple trades to get to cash until you need it because your cost is always higher in the end.
He has a 100 oz bar. I do not understand why he would want something so big and illiquid.
He'll probably need to sell it to a refinery. I can't imagine anyone else wanting it with all the counterfeit bars around.
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
Wow... That is a large gold bar... difficult to sell. I would recommend Apmex... They can handle such transactions and also could provide either gold coins or cash. Cheers, RickO
RE: To whom should he talk for the fairest deal?
Warren Mills, principal of Rare Coins of New Hampshire.
Premiums will be higher for the bullion coins (assuming AGE, Buffalos, or the like) vs. the gold bar but the god bar is difficult to sell and may actually have a gap to spot. So I suppose it depends on the objective.
Latin American Collection
Why?
It seems to me that a larger outfit like AMPEX would be better
Well, the objective was to own as much gold as possible. However, I don’t think he figured liquidity when purchasing this monster.
RE: Why?
You asked a question. I gave you my answer. All the other people responding debate spreads, liquidity, etc. You take it forward from here.
BST ?
Just seeking more justification than “because I said so”.
If you can’t explain why you would use Warren then the answer really is not helpful.
No disrespect but for all I know, you are Warren.
sell that bar, hold the money till Gold drops and then buy AGE's.
Is there a place less than a couple of hours away where it can be sold or traded for gold coins such as AGE's or Buffalo's? Registered mail only covers losses up to $25K which is a lot less than this bar is worth assuming it's even real. Also, the major coin shows frequently have major precious metals companies attend so that may be a good place to sell it or trade it for coins.
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
100oz is an enormous bar of gold. I imagine it is quite a thrill to set it upon the breakfast table, admiring its splendor over a cup of kopi luwak.
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
He should expect anyone buying a 100 oz. gold bar will want to drill it to confirm it is actual gold and not lead filled and acid test the purity.
I'd rather admire five rolls of AGE's.
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
Agree, and then who is going to want the bar with a hole in it. (fair chance it would be a deeper hole to get to the core)
If it was offered to me I would call the refinery and get a buy price and then mark it up to cover my time.
The bar will end up at a refinery at some point.
If you want the best deal you eliminate the middle man.
No shipping risks or cost and you get paid on the spot.
Some would say it was a mistake to buy a large bar that is harder to trade rather than smaller ones that equal the same weight. If you can afford to buy a 100 oz. bar I guess you can afford to pay a middle man when you sell it.
Silvertowne
Latin American Collection
That may be a smart solution.
Didn’t know they were still around.
IMO, sell the bar outright to a refinery which will certainly involve assay. Then use the proceeds to purchase the coins. A lot less complicated.
Why would he trade and have to pay the vig? I would think the bar as well as coins will rise & fall with the price of gold.
Why would he trade and have to pay the vig?
is this a serious question?
I'm with the refinery and then do coin purchases separate but... While one of the big boys I'm sure could handle a trade deal, I'd haggle with the premiums as much as possible. Figure a what, 10-15 grand swing to wiggle around here for some kind of swap.
At these gold levels, I am sure that many refineries are receiving generic bullion coins (Krugerrands, 100 Coronas, various Pesos, 20 Francs, Soveraigns, etc.) to be melted. Tell your friend to contact one of the large refineries and see if they would be willing to do this:
Guy sends the 100 oz. bar to the refinery, which melts it down and determines exactly how much gold there is after the refining. Instead of sending him a check, they hold the refined gold on account by weight (to avoid market risk). Once that is done and the refiner know what they have and cannot lose anything, when they get a deposit of generic bullion coins that they are going to melt anyways, they take his gold and send him the equivalent in bullion gold coins (there will probably be a small cash settlement check because the coins will never come out even with the gold in the bar).
Obviously the guy has to pay the original assay and refining fees, plus the cost of shipping the bar to the refiner and the cost of the refiner shipping him the gold coins, but he might be able to get a better spread than doing it through a dealer, who does have to worry about market risk and etc.
I am sure that many refiners will not want to be bothered, but it would not hurt to ask.
TD
Was this once a "good delivery" gold bar, stamped by a well-recognized major maker? They have high tech, non destructive metal testers today to prevent having to drill into them....such as ultrasonic/phasor testing which can scan through a thick bar from end to end and detect voids, and changes in metal sound speed. And even if you drill into one spot....that doesn't guarantee anything about another "spot" in the bar.
@Yorkshireman
Kitco buys 100 oz good delivery bars and will do shipping insurance coverage, depending on the situation. Have him call and ask a few other places, too, but I had good results selling to them by mail recently, and will do again..
https://online.kitco.com/sell/1025/100-oz-Gold-Good-Delivery-List-Bar-9999-1025
edited to say, after he sells the big bar, if he wants a bunch of nice gold coins with the proceeds, check the BST for some great deals from many reliable people.
My US Mint Commemorative Medal Set
Industrial sized gold bar. No idea how to sell but some good ideas here. Large jewelry manufacturing companies came to mind but likely they have their sources and would not want to deal with a "nobody".
bob
Are there reporting requirements on this sort of trade? I should know the answer, but I don't do a lot with bullion.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Have your acquaintance register at PCGS and ask the question himself/herself. This is an awfully large sum of money to most folks and attempting to get information when you aren't completely certain of the pool you are swimming in and then relaying it to someone who made a large purchase with an inadequate liquidation plan is only asking for trouble.
In honor of the memory of Cpl. Michael E. Thompson
Just send it to me. I'll take a band saw and cut it up into approximately 1 ounce bars, weigh them, stamp them with the exact weight in grams on my triple beam scale, and send them back. My fee will be the shavings I collect!
Darryl,
Of course
I read this earlier, and have watched and read through the comments.
First, it absolutely makes sense. Liquidity is everything, and the pool for 100oz bars is a lot smaller than the pool for 1/4 to 1 oz Bullion Coins, pre-33 US Gold and many examples of Foreign denominated gold.
As has been mentioned, is it a good for delivery bar, or does it have some form of provenance? If it is either, the ability to move it without as much difficulty could be much easier.
I thought @CaptHenway had an excellent idea, and one I would consider trying (sort of) if I was tasked with the issue. I would definitely go to a national size refiner or metals house, and I would stipulate what kinds of situations I was looking for in trade. I wouldn't want to take the obscure stuff that comes in to them, because ... well ,,, then I'm back in the same boat. That's part of the reason it's there. Obscure and probably illiquid, except to a refiner or specialist.
I'd probably want a mix of stuff, but I'd want high demand, easy turn-over, even if I gave up some of the overall ounces in premium for the liquidity. $190,000. of any one thing is a chunk (at least to many of us), and I'd want to be able to move 10% at will, at almost any moment, without too much hassle.
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
You’d lose a lot in the conversion. A bar that size would probably get 95% of melt, while the coins you buy will probably be at 105% of melt.
Do you have a specific contact person at APMEX whom you suggest we deal?
Swapping that "generic" gold bar for anything is a capital gains taxable event assuming the owner made money on the bar. If not, then have at it. But as mentioned earlier, you'll probably lose several percent minimum in such a swap moving into gold coins that tend to carry premiums.
Don't forget that with that weight, the buyer will likely be required file a tax report to the feds so the government can tax the 💩 out of him (unless or until he proves his tax basis).
Indian Head $10 Gold Date Set Album
EDIT: 1031 EXCHANGES CANNOT BE DONE ON PRECIOUS METALS OR COINS SINCE 1/1/2018. REAL ESTATE ONLY!
I'm not so certain about the taxes. As long as it's a swap, precious metal for precious metal, not gold for a house etc, the you could do a 1031 exchange. Tax deferred until the silver gets sold.
bob
Depends on the state, in part. A trade in kind might also avoid cap gains taxes. Consult an accountant or tax attorney.
I'm still trying to figure out who Warren Mills is and why he is the guy to bring $200,000 in gold to.
As the Person who asked the question, so am I!
Maybe Warren posted that himself. When I questioned that possibility PQ disappeared.
PM sent
I don't think he'd be that coy if it was actually himself.