Gold holding in euros - how will a euro crash affect it??

[clueless]

Hi all

This is my first post, and as my name says, I'm pretty clueless about it all!

I have some gold and silver I bought about 6 years ago through Auvesta. It's held in various vaults and value is in euros. I'm thinking about selling in the next year or so, and trying to work out how a euro crash will affect it (assuming there will be a crash at the end of the Brexit transition period)... should I be selling before this or after? 

[Norskgeld]

I would have thought a euro crash would increase your gold value.

Political unrest tends to send gold prices up.

It would be the currency that would tank not the gold itself.

Somebody please correct me if I am wrong.

[Oligarch]

Gold is a hedge against currency debasement. If the euro "crashes" doing so means it is losing value against other currencies, notably the dollar, and -- all else equal -- gold. 

[sixgun]

i don't know about this company.
In what form is the gold?
I see it says it is allocated. They talk about bars.
What size bars are these?
Do you know where your bars are held?
Why do you say your gold is in euros?
Your gold is not in euros - it is gold.

Personally i would demand delivery and get my hands on the physical gold. We are moving into treacherous waters now - better have your gold close to you. There will be no capital gains to pay - you have taken possession - then do with them as you will. If you sell to Auvesta then you will likely realise a profit and potentially liable for CGT. Better take possession. If they play hard to get if you demand possession then i question whether they have the bars in the first place.

If you were to liquidate your gold in euros and quite why you would want to do that if the euro had crashed, then the number of euros you got paid out would be significantly more than today. But why swap gold for fiat currency that is going down the plug hole? 

[clueless]

8 minutes ago, sixgun said:

i don't know about this company.
In what form is the gold?
I see it says it is allocated. They talk about bars.
What size bars are these?
Do you know where your bars are held?
Why do you say your gold is in euros?
Your gold is not in euros - it is gold.

Personally i would demand delivery and get my hands on the physical gold. We are moving into treacherous waters now - better have your gold close to you. There will be no capital gains to pay - you have taken possession - then do with them as you will. If you sell to Auvesta then you will likely realise a profit and potentially liable for CGT. Better take possession. If they play hard to get if you demand possession then i question whether they have the bars in the first place.

If you were to liquidate your gold in euros and quite why you would want to do that if the euro had crashed, then the number of euros you got paid out would be significantly more than today. But why swap gold for fiat currency that is going down the plug hole? 

It's physical gold of all different sizes (from 0.02g up to 100g totalling about 550g) - I have a full breakdown of where it all is - mostly in vaults in Zurich, but some in Frankfurt and London.

When I say it's in euros - it's a German company and I can click 'sell' at any time - valuation/payment is in euros, so I need to convert to GBP and yes, pay CGT. How would that change if I took possession?

I haven't really decided about cashing it in - just looking at my options. It's made a good return and I thought if it jumps again next year, I might take the money to invest in a BTL property or two.

All of the replies are much appreciated :-). 

[clueless]

Sorry @sixgun just re-read and see your point about CGT. I'll have to read through the forum about how you sell gold, as I wouldn't have the first idea if I took possession and wanted to sell privately.

[sixgun]

13 minutes ago, clueless said:

When I say it's in euros - it's a German company and I can click 'sell' at any time - valuation/payment is in euros, so I need to convert to GBP and yes, pay CGT. How would that change if I took possession?

If you take possession you will not have sold the bars - there is no profit realised so there is no CGT. 
If you take possession you can sell in GBP. You could sell to a dealer or privately. Privately; who knows how much you just sold, if you know what i mean.

[clueless]

37 minutes ago, sixgun said:

If you take possession you will not have sold the bars - there is no profit realised so there is no CGT. 
If you take possession you can sell in GBP. You could sell to a dealer or privately. Privately; who knows how much you just sold, if you know what i mean.

Sounds good!

[TheApe]

Its funny that people are buying Gold for the very same reason you are selling.

I swear, OP post is so uninformed it hurts my head.

[HerefordBullyun]

I am somewhat skeptical that you would get delivery of the physical, but it depends on how much gold you have bought. Im a firm believer of the opinion if you dont hold it - you dont own it!

Remember banks can stop fiat easily and stop you from withdrawing cash, dont believe me look at northern rock 2008, no reason someone who holds the keys your gold vault to do the same and you pay a premium for the storage Im assuming?

[Martlet]

If Euro crashes the value of the gold in Euro's would soar.  The value in £, all else being equal, wouldn't change.  Though a Euro crash would certainly have an impact on gold price.

Not sure its a good idea have holdings abroad in such a scenario, it maybe difficult or at least more expensive to liquidate and repatriate the cash (have a euro denominated account?).  If you expected a euro crash then it would be prudent to cash out or take delivery well in advance.  Note also a £ crash is more likely at Brexit transition, because the markets prefer UK to stay in and fears the country isnt ready. 

[Guest]

33 minutes ago, HerefordBullyun said:

Remember banks can stop fiat easily and stop you from withdrawing cash, dont believe me look at northern rock 2008, no reason someone who holds the keys your gold vault to do the same and you pay a premium for the storage Im assuming?

Yes and no. The issue with Northern Rock was a result of the subprime mortgage crisis in the US and the collapse of the housing bubble. Banks were offering 100-125% LTV mortgages without deposits which lead to the bubble bursting.

UK banks are now, by law, split into two separate entities. Their risky business is now completely separated to their core banking, and retail operations, i.e; firewalled, so that should a bank “collapse”, people who have mortgages and savings are protected. Under the FSCS scheme backed by the UK gov, should a bank collapse, you can only recover up to £85k of monies held per institution (see https://www.moneysavingexpert.com/savings/safe-savings/#tiplist-1). If you have more held in them, then you’ve lost the difference.

Banks only allow you to withdraw a max of £500 per day from cash machines. The reason they question huge sums being withdrawn is for potential fraud/money mule/money laundering.

At the end of day, it’s probably better the withdraw little and often and put it in a safe in your house, or under your mattress, than in a bank; especially with interest rates potentially going negative according to the Chief Economist at the BoE at some point to “help stimulate spending rather than investing”...

[HerefordBullyun]

2 minutes ago, C60 said:

Yes and no. The issue with Northern Rock was a result of the subprime mortgage crisis in the US and the collapse of the housing bubble. Banks were offering 100-125% LTV mortgages without deposits which lead to the bubble bursting.

UK banks are now, by law, split into two separate entities. Their risky business is now completely separated to their core banking, and retail operations, i.e; firewalled, so that should a bank “collapse”, people who have mortgages and savings are protected. Under the FSCS scheme backed by the UK gov, should a bank collapse, you can only recover up to £85k of monies held per institution (see https://www.moneysavingexpert.com/savings/safe-savings/#tiplist-1). If you have more held in them, then you’ve lost the difference.

Banks only allow you to withdraw a max of £500 per day from cash machines. The reason they question huge sums being withdrawn is for potential fraud/money mule/money laundering.

At the end of day, it’s probably better the withdraw little and often and put it in a safe in your house, or under your mattress, than in a bank; especially with interest rates potentially going negative according to the Chief Economist at the BoE at some point to “help stimulate spending rather than investing”...

Good reply but if the banks do go down the pan that 85k isnt going to be worth a lot less then than now.

[Guest]

1 minute ago, HerefordBullyun said:

Good reply but if the banks do go down the pan that 85k isnt going to be worth a lot less then than now.

True. Also, the inflation of products and the value of the pound sterling will affect that. I’m not sure if the CPI has increased this year or not, but after this outbreak, it’ll certainly go up and so the work of £1 will have to do the work of £2 instead... it is definitely unusual times in 2020

[silenceissilver]

3 hours ago, Martlet said:

If Euro crashes the value of the gold in Euro's would soar.  The value in £, all else being equal, wouldn't change.  Though a Euro crash would certainly have an impact on gold price.

Not sure its a good idea have holdings abroad in such a scenario, it maybe difficult or at least more expensive to liquidate and repatriate the cash (have a euro denominated account?).  If you expected a euro crash then it would be prudent to cash out or take delivery well in advance.  Note also a £ crash is more likely at Brexit transition, because the markets prefer UK to stay in and fears the country isnt ready. 

I agree with the first sentence but not the second one. If (I should write when) the Euro crashes it will of course send shock waves around the world, the reason being the rest of the world is not doing well either, having implemented fiat money themselves. The banking and monetary system is worst in the Euro zone and a banking and monetary crisis will (most likely) start there but it won't stop there. Countries in Europe without the Euro, e.g. the UK will be a bit better off not having the Euro but it will not be a gigantic difference either.

Selling before the Euro crash? That would be outright crazy, in my opinion - unless you need to for personal reasons.

Capital gains tax - in Germany you have one on gold if you held it for less than one year. Then, whatever coins or bars whatever you sell it for, there is no capital gains tax. But of course that's the case now. Germany is currently discussing a capital levy. Anyone who holds any assets in Merkel-Germany (unless you live there of course) has lost control of his life.

[HerefordBullyun]

3 minutes ago, silenceissilver said:

I agree with the first sentence but not the second one. If (I should write when) the Euro crashes it will of course send shock waves around the world, the reason being the rest of the world is not doing well either, having implemented fiat money themselves. The banking and monetary system is worst in the Euro zone and a banking and monetary crisis will (most likely) start there but it won't stop there. Countries in Europe without the Euro, e.g. the UK will be a bit better off not having the Euro but it will not be a gigantic difference either.

Selling before the Euro crash? That would be outright crazy, in my opinion - unless you need to for personal reasons.

Capital gains tax - in Germany you have one on gold if you held it for less than one year. Then, whatever coins or bars whatever you sell it for, there is no capital gains tax. But of course that's the case now. Germany is currently discussing a capital levy. Anyone who holds any assets in Merkel-Germany (unless you live there of course) has lost control of his life.

This man talks a lot of sense.👆