Invest in Physical Gold - What a Rip-Off !!

[Pete]

I was checking stock of gold coins at HGM and experimented with their "Invest in Physical Gold" page.
You enter a figure in a box and it comes up with a response.
I tried many different numbers and was "shocked" !!!! to see that they are clearly looking to shift a large quantity of 1/10 oz Brits at silly bullion prices.
As an "investment" paying approximately 20% over spot must be a joke. 

What I expected to see was a selection of coins and bars priced around 3% over spot.
Boring Kruggerands mainly and some larger weight bars.
I felt compelled to share this with the forum because this practice is going to fleece "investors" who haven't done their research and homework and appalling behaviour from HGM in my opinion.
This behaviour turns me totally off giving them any business in the future.
What do others think from a company that was once in the top tier for serious forum buyers ?

[dicker]

Hi Pete

I have had some great coins from HGM.  Some which I was very surprised to receive, but that was a while ago.

The best coins that I purchased were the “handled proofs”. Really really nice condition given the description.  Plus one Canada Sov.....

Now, they seem to have a very odd pricing structure that doesn’t make sense - the same year coins priced differently on the same page at the same “grade”.

Stopped using them some time ago because of the amateur pricing model.  

Best

Dicker

 

 

[27carrots]

Quote

Boring Kruggerands mainly and some larger weight bars.

I like their site. I am new to this but you can auto-ignore everything that doesn't say it's under 5% over spot.

Also if you go there now they just have krugs and bars but during the day they put up really good deals like half sovs today for £151 I think I saw them for. But they just put up a couple at a time so they get snapped up really quickly.

my first coin was a 3% philharmoniker from there

If people want to overpay 20% on other stuff then let them pay it I say, lol.

 

[KDave]

That is quite shocking, most people spending that kind of money would be wiser I'd hope! If not then I would expect hgm to make an inquiry into the order and not be greedy so and so's. 

I saw a few low grade sovs on there yesterday really good value. Yet then the premiums on specific dates sovs (Bullion!!) are huge - it's still just bullion though, I don't get it. It's a strange business model.

Are people that bothered about the dates on bullion sovs? It's not as though hgm are selling EF grades or are they? 

[Martlet]

I dont see a problem, they charge more than you'd pay for something you dont really want, so dont buy them.  Most dealers have similar erratically priced items, for some its not even erratic, +10% is normal pricing.  I note HGM doesn't do volume price discount, so showing their 1 unit price, its just simplistic software. 

[CollectForFun]

19 minutes ago, Martlet said:

I dont see a problem, they charge more than you'd pay for something you dont really want, so dont buy them.  Most dealers have similar erratically priced items, for some its not even erratic, +10% is normal pricing.  I note HGM doesn't do volume price discount, so showing their 1 unit price, its just simplistic software. 

I don't think you noticed the real point. If I understand correctly, HGM are supposed to recommend to a prospective investor a composition of their investment package based on the amount entered. Arguably this tool is meant for people not very familiar with gold and just relying on the dealer to make the right allocation of one's investment for them. And what they do is they tell you to buy 1/10 coins at high premium, even for investments exceeding £400,000 (they seem to run out of 1/10s at 2700 pcs).  That's really very unprofessional, be it an intention, or just poor programming of the system...

[Pete]

26 minutes ago, Martlet said:

I dont see a problem, they charge more than you'd pay for something you dont really want, so dont buy them.  Most dealers have similar erratically priced items, for some its not even erratic, +10% is normal pricing.  I note HGM doesn't do volume price discount, so showing their 1 unit price, its just simplistic software. 

Are you sure you didn't see a problem ?
Yes, if you see a coin listed and want to buy it after checking the price, comparing with other sellers etc then that's your decision.
My point is they are selling an "investment" bundle so you would instinctively expect a price that is in line with the size of your investment and not picking some coins they clearly have an abundance of and regularly sell with a 20% premium. The example shown is purchasing 100 grands worth of bullion so even 3% premium would seem high to a buyer and I am certain there are many bullion dealers ready to take such an order for even less than this and as it is investment gold it really doesn't matter what you buy as long as it is fine gold.

[SilverJacks]

So, the issue isn't really the price of a 1/10 Brit, but the misleading of people into bulk buying them at 20%, as supposedly some kind of reasonable investment?

 

I bought a 1/10 Krug at 10% the other day (I can't afford bigger and better value coins), asked them to combine postage with a 5g sealed Fortuna that was listed at 10%, they put the price up to 25% before replying to me. When i didn't buy, the price went down to 20%, which i still didn't buy. When i asked them why the price went up, they just said "supply and demand"... Their pricing is all over the shop. 

[27carrots]

7 hours ago, CollectForFun said:

I don't think you noticed the real point. If I understand correctly, HGM are supposed to recommend to a prospective investor a composition of their investment package based on the amount entered. Arguably this tool is meant for people not very familiar with gold and just relying on the dealer to make the right allocation of one's investment for them. And what they do is they tell you to buy 1/10 coins at high premium, even for investments exceeding £400,000 (they seem to run out of 1/10s at 2700 pcs).  That's really very unprofessional, be it an intention, or just poor programming of the system...

If you put in other large amounts like 1 million or 10 million you will see they just give you up to 100% of one item and up to 100% of another item until you run out of money in a seemingly random order. They only include what they have in stock (up to £4662415.79) and at the moment it seems the only good value item is the "boring krug". If they were putting things in there not in stock, people would complain. And if krugs were at the top of the list people would complain about being saddled with CGT items.

[Martlet]

7 hours ago, Pete said:

Are you sure you didn't see a problem ?
Yes, if you see a coin listed and want to buy it after checking the price, comparing with other sellers etc then that's your decision.
My point is they are selling an "investment" bundle so you would instinctively expect a price that is in line with the size of your investment and not picking some coins they clearly have an abundance of and regularly sell with a 20% premium. The example shown is purchasing 100 grands worth of bullion so even 3% premium would seem high to a buyer and I am certain there are many bullion dealers ready to take such an order for even less than this and as it is investment gold it really doesn't matter what you buy as long as it is fine gold.

OK, I dont see a problem that means I wouldn't buy from them.  This morning they will sell me n x 1/10th Brit and 1 x 1862 sov, for any value.  I see a crude program, probably knocked up by a gold naive coder, not a serious investment tool. 

Is it intended to fleece passing investors or poorly made?  I reckon the latter, if they wanted to fleece punters they wouldn't be offering Krugs at +2.7%.  And if they want to shift their 1/10th stock they'd put them on offer.  Maybe feedback to them its a poorly designed tool and they'll change it. Their site has long been a mess for pricing, suspect not a focus for the owners.

[CollectForFun]

36 minutes ago, 27carrots said:

If you put in other large amounts like 1 million or 10 million you will see they just give you up to 100% of one item and up to 100% of another item until you run out of money in a seemingly random order. They only include what they have in stock (up to £4662415.79) and at the moment it seems the only good value item is the "boring krug". If they were putting things in there not in stock, people would complain. And if krugs were at the top of the list people would complain about being saddled with CGT items.

Hehe, this is actually a good way to get an overview of what they have in stock 🙂

So, to their defence, they don't seem to have 1 oz brits in stock at present, so understandably they can't offer them. But they do have 1/4 brits, although just 22ct.

Good point about prioritizing CGT exempt items, although it's questionable what would be more advantageous eventually - to save CGT, or premium. Will depend on the increase in value, I guess.

They also have a lot of sovereigns in stock but for some reason they don't treat them as CGT free in that package.

[KevjustKev]

On 19/03/2021 at 07:54, CollectForFun said:

Hehe, this is actually a good way to get an overview of what they have in stock 🙂

So, to their defence, they don't seem to have 1 oz brits in stock at present, so understandably they can't offer them. But they do have 1/4 brits, although just 22ct.

Good point about prioritizing CGT exempt items, although it's questionable what would be more advantageous eventually - to save CGT, or premium. Will depend on the increase in value, I guess.

They also have a lot of sovereigns in stock but for some reason they don't treat them as CGT free in that package.

Quite sure that pre 2013 Brit's have 1 oz of pure gold, but just bigger coins

[CollectForFun]

38 minutes ago, tallthinkev said:

Quite sure that pre 2013 Brit's have 1 oz of pure gold, but just bigger coins

That's not quite right - they contain 1 oz of gold, but it is not pure gold, as it is not 999.9. But I do not see how this is relevant to my post?

Anyway, checked their site again today and they apparently took almost all their coins off stock - weekend price uncertainty risk management, I guess.

[TringSilver]

17 minutes ago, CollectForFun said:

That's not quite right - they contain 1 oz of gold, but it is not pure gold, as it is not 999.9. But I do not see how this is relevant to my post?

Anyway, checked their site again today and they apparently took almost all their coins off stock - weekend price uncertainty risk management, I guess.

It's 34gms of 22ct or .917 pure which equals 31gms or one Oz of .999 gold.

[SilverJacks]

25 minutes ago, CollectForFun said:

That's not quite right - they contain 1 oz of gold, but it is not pure gold, as it is not 999.9. But I do not see how this is relevant to my post?

Anyway, checked their site again today and they apparently took almost all their coins off stock - weekend price uncertainty risk management, I guess.

Sometimes dealers remove stock and relist it later, to give the illusion that demand is high and all is turning over quickly. 

I'm pretty sure HGM do this, without being able to prove it as a fact of course.

[sovereignsteve]

For whatever reason, HGM have changed their business model in the last year (or two?). I would say they've lost the plot myself, but I would, wouldn't I?😁

Whether it's a change of management or simply someone there who has bought a Spink catalogue etc and fancies themselves as a bit of a numismatist, who knows?

I haven't spoken to them in ages so have no idea.

[StackemHigh]

I haven't used HGM for a couple of years at least! possibly longer. Not as good a company as they used to be.