Advice for newbie trying to acquire gold in the current crisis

[Oligarch]

Hi All,

I’m new to the forum, and interested in purchasing gold coins for the first time given my bullish view on the gold price. 

I’m finding it a bit overwhelming given the current bullion shortage and delivery disruptions in the UK (I am based in London). While I’ve read through a number of posts on this forum and articles elsewhere online, I would appreciate some feedback on the questions below.

Based on what I was reading, I am thinking of focusing on gold sovereigns for the CGT exemption and for ease of liquidating my holdings in piecemeal fashion in the future.

 

1) When it comes to resale, will there be any benefit from having a 2020 newly minted gold sovereign vs. older coins, such as those that Chards labels “secondary market”, “minty” or “C” grade? In the end, will a bullion dealer pay me the same for all of these, or will there be different offers for different coins? 

 

2) If I don’t have a Sigma testing device, is it safe to buy coins that are not newly minted 2020 sovereigns from the bullion dealers on http://goldprice.eu5.net/ ?

 

3) Are there any good alternatives to a Sigma device readily available? As far as I can tell, Sigma devices are hard to come by these days. I’m looking to invest over time, so am happy to pay for a device or some up front premium on the coins themselves if either would eliminate the risk of fakes.

 

4) If I'm looking to buy coins for investment purposes only, does it matter whether I store them in a tube or in individual capsules? Happy to pay more for storage media if it helps resale value, but also don't want to bother with cumbersome packaging if there is no practical financial benefit. 

 

Thank you in advance for suggestions on how to acquire genuine gold coins in the current environment.

 

[HelpingHands]

19 minutes ago, Oligarch said:

 

 such as those that Chards labels “secondary market”, “minty” or “C” grade? In the end, will a bullion dealer pay me the same for all of these

Not in experience

.  @ChardsCoinandBullionDealer wanted them in practically mint condition before paying their best rate.   So QE2 sovs had the best chance.

Private collectors often prefer the older coins though.

[RoughDog]

If you are purchasing gold for the long term then I wouldn't worry too much about gold price fluctuations. 

Buying from a reputable dealer would be far cheaper than purchasing one of those expensive precious metal verifiers.

Sticking to CGT except gold is a good strategy in my opinion.  

Price wise.  Half sovereign, Full sovereign, one ounce Britannia offer the lowest premiums.

Unless you purchase a pre-owned one ounce Krugerrand but that is NOT CGT exempt.

 

[Airhead]

I would have thought that if you purchase primarily from reputable dealers the expense of a Sigma device would not necessarily be worth the financial outlay. Dealers should check the veracity of the bullion they sold you as a matter of routine. If you are thinking of purchasing from ebay and other irregular channels, then perhaps a Sigma would be useful although being in London any coin you thought suspect could be assayed on the counter of most bullion dealers.  

[Stuntman]

The answer to question 1 depends a little on your exit strategy.  If you intend to sell as scrap gold, say to a bullion dealer in Birmingham's Jewellery Quarter or Hatton Garden - I would say just buy the cheapest sovereigns you can find regardless of condition.

I agree that if you buy from reputable dealers, a Sigma device or similar is not worth the expense.  A reputable deailer will always allow you to return the item if it is not genuine.

For question 4 - if you are just buying for weight (as in stacking) - no special storage is required.  But you might fall down the slippery slope of actually liking the shiny metal objects you acquire, which might influence any future purchases and storage solutions 🙂

Enjoy your journey, I'm loving mine!

[richatthecroft]

5 hours ago, Oligarch said:

Hi All,

I’m new to the forum, and interested in purchasing gold coins for the first time given my bullish view on the gold price. 

I’m finding it a bit overwhelming given the current bullion shortage and delivery disruptions in the UK (I am based in London). While I’ve read through a number of posts on this forum and articles elsewhere online, I would appreciate some feedback on the questions below.

Based on what I was reading, I am thinking of focusing on gold sovereigns for the CGT exemption and for ease of liquidating my holdings in piecemeal fashion in the future.

 

1) When it comes to resale, will there be any benefit from having a 2020 newly minted gold sovereign vs. older coins, such as those that Chards labels “secondary market”, “minty” or “C” grade? In the end, will a bullion dealer pay me the same for all of these, or will there be different offers for different coins? 

 

2) If I don’t have a Sigma testing device, is it safe to buy coins that are not newly minted 2020 sovereigns from the bullion dealers on http://goldprice.eu5.net/ ?

 

3) Are there any good alternatives to a Sigma device readily available? As far as I can tell, Sigma devices are hard to come by these days. I’m looking to invest GBP10,000 or more over time, so am happy to pay for a device or some up front premium on the coins themselves if either would eliminate the risk of fakes.

 

4) If I'm looking to buy coins for investment purposes only, does it matter whether I store them in a tube or in individual capsules? Happy to pay more for storage media if it helps resale value, but also don't want to bother with cumbersome packaging if there is no practical financial benefit. 

 

Thank you in advance for suggestions on how to acquire genuine gold coins in the current environment.

 

 

At these prices- here's my tips 😂

Get one of these:

https://www.hilti.co.uk/c/CLS_POWER_TOOLS_7124/CLS_DIAMOND_CORING_MACHINE_SUB_7124/CLS_DIAMOND_CORING_MACHINE_7124/r3411829?itemCode=2095235

 

And a better plan after the heist than this lot😁

 

[silenceissilver]

I have a Sigma Pro myself but if you want to buy gold for 10.000 at once, I would consider it a waste of money to buy even the non pro version or any of these alternatives (but since you asked I still provide the link):

https://www.gold-analytix.de/en-uk

If you buy from a reputable dealer the chances of getting a fake are very, very low. Not zero maybe as mistakes can happen but if you want to exclude this possibility I would do a specific gravitiy test and a neodym magnet test. I have made the experience with such tests that a cheap scale will do the job at the beginning but eventually it will be useless as it would need to be recalibrated (after one year maybe) which you can't do with a cheap scale. At the beginning it will be accurate enough to properly test your gold though. It's a pain in the backside though, with coins because they are round, particular with small coins like the sovereigns - but it's worth saving the money for a simga. Just be very careful as they will get small scratches very easily. Cotton gloves are a must, of course.

I have never bought Chard's secondary grade Sovereigns or sold any Sovereigns so others will give you better advice on that matter. But obviously stick to bullion as you clearly don't want to bother with numistmatic coins. I'm not into numismatics a lot, myself.

I have bought gold coins from about half of the dealers in this link, I got no fake from any of them, even though I wasn't always sure straight away, but all tests turned out with a negative result for a fake. From what I read here, this reflects the experience of other forum members.

Edit:I have overlooked you might want to buy more, eventually. Depending on how much more over what period, a Sigma might actually not be a bad idea. If you want to buy every month for many years to come, I would definitely buy it. But if you are not sure, wait a bit and see if you are still interested in 6 or 12 months.

[Oligarch]

Thanks guys, this is all very helpful.

It sounds like the dealers are checking even the used coins they sell out, such that there is no incremental benefit from buying only newly minted coins. And sounds like I should hold off on the Sigma for now. 

Someone mentioned being able to return suspect coins to a dealer. How does that work in practice? i.e., when they send the coins, do they specifically state the year of production or have some sort of photo inventory? I'm just thinking ahead to when I may have several dozen coins and find out at a later date that the coin is suspect how easy it is to go back and work something out with the dealer. Trying to understand how dealers establish which specific coins they sold in the absence of serial numbers etc.

Thanks again for all your help!

 

 

[ChardsCoinandBullionDealer]

18 hours ago, Oligarch said:

1) When it comes to resale, will there be any benefit from having a 2020 newly minted gold sovereign vs. older coins, such as those that Chards labels “secondary market”, “minty” or “C” grade? In the end, will a bullion dealer pay me the same for all of these, or will there be different offers for different coins? 

Hello. We'd buy-back a new sovereign for exactly the same price as a secondary market coin, whereas for Grade C we'd offer less. 

We are quite strict with what we class as "secondary market". Anything that's been polished, has gauges or edge knocks, or has been in jewellery we'd class as Grade C or even scrap. 

Amy

[sovereignsteve]

2 hours ago, Oligarch said:

Thanks guys, this is all very helpful.

It sounds like the dealers are checking even the used coins they sell out, such that there is no incremental benefit from buying only newly minted coins. And sounds like I should hold off on the Sigma for now. 

Someone mentioned being able to return suspect coins to a dealer. How does that work in practice? i.e., when they send the coins, do they specifically state the year of production or have some sort of photo inventory? I'm just thinking ahead to when I may have several dozen coins and find out at a later date that the coin is suspect how easy it is to go back and work something out with the dealer. Trying to understand how dealers establish which specific coins they sold in the absence of serial numbers etc.

Thanks again for all your help!

 

 

If you stick to buying sovereigns from any reputable bullion dealer, you need have no worries about being sold a worthless coin. Most if not all will check the purity of the gold so you can be sure you will be getting about 22 ct even if the gold isn't actually a genuine sovereign but faked. A few fakes do slip through at busy bullion dealers, many of whom will have no numismatic knowledge, but the vast majority of fakes are about 22 ct so no real loss if you do get one. Any that aren't are so obviously fakes that even a bullion dealer should spot them. I have never had a problem returning fakes coins for refund or replacement.

[Oligarch]

Thanks again, this is all super helpful. Another question is that I'm seeing some sets of special/commemorative coins being offered at a premium of <5% on the gold content. While I know most commemorative coins are often a rip off, is it fair to assume that I would be able to sell a commemorative coin for close (within 5%) to the gold content therein?

I have in mind coins that are NOT sovereigns, etc. but rather nonstandard coins that are nonetheless being marketed by reputable dealers as low premium options for acquiring gold. 

My thinking is that the low premium makes them better value than sovereigns for investment purposes, and that I'm getting any numismatic value for free, which essentially gives a call option on the collectors' value if they ever become in demand as collectibles. 

[ilovesilverireallydo]

On 15/05/2020 at 14:11, Oligarch said:

My thinking is that the low premium makes them better value than sovereigns for investment purposes, and that I'm getting any numismatic value for free, which essentially gives a call option on the collectors' value if they ever become in demand as collectibles. 

If they are being offered at 5% its most likely there is no numismatic value. There is nothing free in this business  

[Prophecy]

6 hours ago, ilovesilverireallydo said:

If they are being offered at 5% its most likely there is no numismatic value. There is nothing free in this business  

And mostly not CGT free. Some of them are poorly crafted from a creative POV so dealers might want to shift them fast and will most likely buy back under spot significantly. Usually happens with silver with so many gimmicks going around that go out of fashion. Gold not so much but calibrate your taste to the market.

[drakesterling]

Simply buying sovereigns (but not from the Royal Mint) is the way to go. You can get them for a percent or two over melt and dealers buy them back for a percent or two below melt, sometimes even at melt.

[Foster88]

Sovereigns are my favourite to buy. My advise would be to research, research and do more research.

I only started buying sovereigns when the gold price was around £955 an oz. it’s has risen considerably since then.

There is also the Britannia gold coins ranging from 1/10th oz up to a full 1oz. These are 24ct and sovereigns are 22ct.

Nobody knows where the gold price is going but you should buy what you like and like what you buy. 

Always do your research and this forum is a great place to buy and I’d advise investing in the premium membership and you’ll find some good deals on the UK sale area.