Cost of gold sovereigns

Discussion in 'Finance, Property, Law' started by old_bloke, Jan 16, 2009.

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  1. Trying to find out the cost of some gold sovs as an investment but can only find a few sites in the Uk that give prices.

    I am just after 2008 /2009 coins as a way so ofset gains tax for a few years.

    How much would say 20 coins cost cost less TAX?
     
  2. BiscuitsAB

    BiscuitsAB LE Moderator

    most of the time Sovs. are sold as bullion and therfore a lot of time they are sold at a percentage over spot price.
     
  3. i hear elizabeth duke does a good line in sovs
     
  4. No VAT or purchase tax on investment gold in the EU. They are worth what people are prepared to pay for them.
     
  5. BiscuitsAB

    BiscuitsAB LE Moderator

    Err the price on .995 and .999 is set on the LME most places that sell coins commercially sell that at a profit on the spot price. 10% over spot is not uncommon.
     
  6. Yep. That's correct. But, there is no VAT or duty payable on investment gold in the EU. The past few months have seen dealers increase their mark-ups considerably. Whereas twelve or eighteen months ago the typical premium on retail investment gold (fractional and one ounce coins) was 3 to 5 per cent, it can now be anything up to 15 per cent. If punters were not willing to pay this amount then dealers would be compelled to drop their premiums. Thus, the price reflects what people are willing to pay for them. And forever it will remain so. Though, interestingly, the mark-up on 100 oz bars is virtually nil over spot. It's possible to get 100oz bars for only a few dollars over spot.

    The fundamental questions are:

    1. Are the premiums that are now being charged fair?

    2. Is now a good time to get into gold?

    3. If you answer yes to these questions, and you decide to invest, then where would you store the gold? This is a real headache. British retail banks have been slowly doing away with the unprofitable safety deposit boxes. There is the option of having a safe in your property. Though, were raiders to enter one's house and put a gun to a child's or spouse's head, we can all agree that we'd be quick to open the safe. So where to store that gold? It would not be wise to have it lying about the house. There is an option at Zurich airport, where a private company offers secure storage for a reasonable price.

    I am loathe to discus the virtues and problems of investing in gold, or whether now is a good time to invest. It's a complex and emotive subject. Though, I would say that everybody should have some gold in their portfolio. Storage is key.
     
  7. By the way, old_bloke. One more thing.

    Firstly, the annual exempt amount for CGT is £9600 for the financial year 2008/09. As such, you would only be liable for CGT were you to make a profit of over £9600 on investments were you to sell your coins.

    Furthermore, it would not be necessary for you to limit your purchase to 2008/09 minted coins to avoid CGT. If you were to buy coins that are classed as sterling (sovereigns and Britannias) then whatever profits you'd accrue would be exempt from CGT. In effect, you could buy a collection of Victorian sovereigns, and sell them for a profit greater than £9600 and still not be liable for the dreaded CGT.

    As an aside, it's quite interesting how few people talk about investment silver bullion. But those who run the system would hate it for the masses to be aware of silver. If enough people were to hold silver, it could render the bankers' ponzi schemes redundant. Granted, when purchasing silver coins or bars one must pay 17.5 per cent VAT. So, one would need to see a rise of at least 17.5 per cent in the price of silver to break even when selling. Granted, the price of silver follows different fundamentals to that of gold. And granted, silver is more volatile than gold -- thus one should expect violent rises and falls in the silver market.

    However, silver is a precious metal; it is a tangible commodity; it is affordable; it, and not gold, has historically been used as money in daily transactions; and it is no where near its historic high of $54 in 1980. Though the historic high of 1980 was actually a bubble caused by the Hunt brothers, for which the US government made them pay dearly.

    It's possible that silver could be a very good investment in the long-term (20 - 50 years). I would expect to see a rise in the silver price coinciding with a future economic recovery, as silver is an industrial metal. As demand for consumer goods rises, so should the price of silver. This could mean that silver is currently overvalued, as we can expect consumer and industrial demand to fall further in the months ahead. However, this is not a given since silver could actually become a safe haven from inflation. The question is, are we due high inflation in the next few years? If so, then silver will likely perform well.

    It wouldn't be a bad idea to buy even just one or two silver coins per month for the rest of one's life. After all, one can get a one ounce silver Philharmonic coin for little over 13 quid including VAT.

    Finally, investing in gold and silver (particularly physical bullion) is unlikely to make you rich. Experienced investors typically invest in bullion to preserve wealth in inflationary periods, and not for profit. And, at the end of financial crises', he who holds the gold holds the power.

    CAVEAT: The above words in no way should be constituted as financial advice. They are the opinions of an individual on the internet (who may not know what he is talking about), and should not be used as a basis for future investments. DO YOUR OWN DUE DILIGENCE.
     
  8. If you've never held anything with fundamental value and no immediate use - like a gold or silver coin - it's an interesting experiment to give it a try. Personally I turn into a character in a Bond film - "All my life I've been fascinated by its colour.....".

    If you feel like that a few coins has the advantage that even if the price goes nowhere you get pleasure from having them. When handling them fingerless gloves can be worn, and the only illumination a single candle stub :D
     
  9. I strongly recommend www.taxfreegold.co.uk, I have used them for years, call them and they will give you a quote.

    Gold is in a real flux at the moment as a great many people avoid gold funds and insist on physical gold, leading to the recent Global shortage in Kruggerands and Sovereigns. This is a serious trend as many people with money are stockpiling gold coins and bars for use on the greatly expanding ‘black economy’, or in case HMG nationalises gold - as did the Ynaks in 1931.....

    Keeping it safe is a home safe, as reported on the Today Programme the fastest growing ‘must have’ home improvement -
    http://www.onlinesafes.com/ floor safes are the one... a couple at least.
     
  10. Armchair - thanks they are one of the sites I have been looking at.

    Contrarian - thanks , I was after 2008/9 as I thought they would cost les than any historic coins.

    I have quite a bit of American silver coin and old Rhodesia coin,numbered cap badges and 1 of the 500 copies of the silver cap badges.


    Bullion bars are a bit hardes to sell bits of if I need to :D
     
  11. It's always good for have some shiney, shiney gold to fondle by candle light :D

    Sovereigns are the best for avoiding the CGT but also think about getting 100 Coronas coins - they have .98 oz of gold in them and tend to be £60 to £80 cheaper than a 1oz gold coin.

    www.goldline.co.uk
    www.weightoncoin.co.uk

    Also look at the Numistical (or how ever the coin collectors spell it) value of the coin as a sov may be worth more than bullion value.

    Research, research, reasearch!
     
  12. First off, the price of gold is fixed by the LBMA, and not the LME. LBMA does gold and silver, LPPM does the PGM. LME does stuff like steel and copper.

    Second off, if you can buy a bar it would present better value for money than coins - there is a greater manufacturing cost in coins.

    Good delivery. If you do go for coins, don't do the fancy stuff. Go for bog standard and regular - easier to turn into cash when you want it. If you go for bars, same applies and get all the paperwork.

    It has been known for people to turn 'gold' away because they don't believe it's real. Did you read this? No linky http://news.bbc.co.uk/2/hi/africa/7294665.stm
     
  13. BiscuitsAB

    BiscuitsAB LE Moderator

    REf LBMA your absolutley bloody right I've been thinking copper for so long I cant get LME out of my head.

    edited: thanks for the bbc news link, made me smile it reminded me of "making money" by Terry Pratchet.
     
  14. T'other thing to consider is the spread. If gold is at £612.669 per troy ounce then you will buy at a price higher than that and you will sell at a price that is lower. The difference is called the spread.

    When you buy at about £680 per ounce, your sale price has to be at £748 before you have made 10 percent, gross. I think i'm right but it's nearly midnight and i'm sponsered by cockburns. Take out of that any fees, charges etc and you've made feck all.

    Gold is at an all time high and you may have missed the boat. Platinum is cheap at the minute. Silver is very good as there is more of it about, it's been on a charge since October, it's trading at about £8.28 and the high was £10.36.

    May I recommend a few chickens and an allotment?
     
  15. 'Making Money' is such a cool book. All bow to the god called Terry.