Supply Situation Getting Back Towards Normal

[LawrenceChard]

For the past month, my gut feelings have been that the supply and delivery situation for popular UK gold and silver products has been easing, and edging towards normality.

For most of the last 15 to 18 months, there has been big demand for investment bullion products worldwide.

In the UK, this has naturally been particularly strong for British CGT exempt coins, such as gold sovereigns, gold Britannias, and silver Britannias, with demand also overflowing into gold and silver bars.

Any secondary market coins we bought in this period have sold out within hours or days. Naturally, many investors prefer these because of lower premiums, which has increased demand for new, fresh from the mint, products.

In the past month, we have received significant deliveries of 2021 gold sovereigns, gold Britannias, and silver Britannias.

We now have spare physical stock of 2021 silver Britannias, having received more than a tonne in the last few weeks, with more in the pipellne.

2021 gold sovereigns we have had spare physical stock for about 2 out of the past 4 weeks, with more due in soon.

2021 gold Britannias. Again, we have had a number of large deliveries, but not quite enough to fill all existing orders. This should also change by mid August.

This was just one of our recent silver Britannia deliveries (the monster boxes, not Mandi).

TSF stackers might be interested to know that there is often, but not always, slowdown in hot weather and holidays.

In combination with more readily available stock, this may mean slightly lower premiums on some of these coins over the next month.

 

[TringSilver]

Thanks for the update Lawrence.

With increased supply do you think we may see a noticeable lowering of the 50% premiums (not checked Chards but in general) on silver 1oz coins ? 

In your experience of course, I assume there was a similar situation in 2008/9. 

I ask as I've just seen a "Special Offer" from a Midlands based dealer with Philharmonic tubes at £10/coin over spot which doesn't feel special to me!

Edited August 4, 2021 by TringSilver
Clarity

[watchesandwhisky]

Appreciate the update👍 

[Gordy]

3 hours ago, LawrenceChard said:

For the past month, my gut feelings have been that the supply and delivery situation for popular UK gold and silver products has been easing, and edging towards normality.

For most of the last 15 to 18 months, there has been big demand for investment bullion products worldwide.

In the UK, this has naturally been particularly strong for British CGT exempt coins, such as gold sovereigns, gold Britannias, and silver Britannias, with demand also overflowing into gold and silver bars.

Any secondary market coins we bought in this period have sold out within hours or days. Naturally, many investors prefer these because of lower premiums, which has increased demand for new, fresh from the mint, products.

In the past month, we have received significant deliveries of 2021 gold sovereigns, gold Britannias, and silver Britannias.

We now have spare physical stock of 2021 silver Britannias, having received more than a tonne in the last few weeks, with more in the pipellne.

2021 gold sovereigns we have had spare physical stock for about 2 out of the past 4 weeks, with more due in soon.

2021 gold Britannias. Again, we have had a number of large deliveries, but not quite enough to fill all existing orders. This should also change by mid August.

This was just one of our recent silver Britannia deliveries (the monster boxes, not Mandi).

TSF stackers might be interested to know that there is often, but not always, slowdown in hot weather and holidays.

In combination with more readily available stock, this may mean slightly lower premiums on some of these coins over the next month.

 

very pretty sight to behold....

[LawrenceChard]

3 hours ago, TringSilver said:

Thanks for the update Lawrence.

With increased supply do you think we may see a noticeable lowering of the 50% premiums (not checked Chards but in general) on silver 1oz coins ? 

In your experience of course, I assume there was a similar situation in 2008/9. 

I ask as I've just seen a "Special Offer" from a Midlands based dealer with Philharmonic tubes at £10/coin over spot which doesn't feel special to me!

I think premiums will ease slightly, but whether you think it is noticeable is another question.

 

If you read any of my advice about investing in precious metals, I generally favour and recommend gold. the simple reason for this is that investment gold is exempt from VAT.

It is quite easy to buy gold coins at 2% to 5% premium in modest quantities.

Silver is different. It is taxable at 20% VAT, and this fact makes it a far less attractive investment in my opinion. the same applies to platinum and palladium.

Because of silver's low price relative to gold, it costs a higher proportion to process and manufacture. As an example, let's assume a mint can make a one ounce gold coin for a production cost of £5, that's about 0.38%. Also assume it costs it only £1 to make a one ounce silver coin; currently that's about 5.5%. Now for a further calculation for silver:

Base    100    Index
Add 10%    110    Mint Selling Price
Add 10%    121    Dealer Selling Price
Add VAT    1.2    
Retail    145.2    
 

With spot silver currently about £18.27:

At those figures, the mint would be making about £1 per coin in big volume sales, and the dealer about £2 per coin in small quantities; that's a modest profit for small deals. For volume sales, price breaks usually apply, which might bring the final price closer to 140 or a 40% premium. Even if the mint and dealer were to work on ultra slim margins, the final price could hardly come down as low as 135, for a 35% premium.

You might also notice that we @ChardsCoinandBullionDealer tend to use and show % premiums for gold, but monetary values for silver, partly because it relates more closely to the cost pricing, and partly because the VAT distorts any % calculation.

Here is a sample quantity break pricing table for the most popular UK silver bullion coin, new 2021 silver one ounce Britannia:

Quantity	Premium	Price Per Item (Exc. VAT)	Price Per Item (Inc. VAT)	Total (Inc. VAT)	Est UK Delivery
1	£4.85	£23.15	£27.78	£27.78	£3.50
5	£4.40	£22.70	£27.24	£136.20	£6.00
10	£4.10	£22.40	£26.88	£268.80	£6.00
25	£3.80	£22.10	£26.52	£663.00	£6.00
50	£3.75	£22.05	£26.46	£1,323.00	£11.00
100	£3.50	£21.80	£26.16	£2,616.00	£27.60
250	£3.30	£21.60	£25.92	£6,480.00	£30.60
500	£3.10	£21.40	£25.68	£12,840.00	£49.20
1000+	£3.05	£21.35	£25.62	£25,620.00	£99.40

 

... and a UK dealer comparison:

Price Comparison Against Other UK Bullion Dealers - Updated at 04-Aug-2021 04:46

Qty	Chards (Excl Delivery)	Chards (Inc Delivery)	B*	G*	AB	BB	RM	UKB	GER
5	£27.38	£28.58	£30.60	£29.64	£30.96	£31.53	£31.34	£30.84	£30.12
10	£27.02	£27.62	£29.88	£29.52	£29.16	£31.08	£30.57	£30.12	£28.80
25	£26.66	£26.90	£29.64	£29.16	£28.80	£30.65	£30.06	£29.90	£28.08
50	£26.60	£26.82	£29.40	£29.04	£28.32	£30.22	£29.63	£29.81	£27.96
100	£26.30	£26.58	£29.04	£28.92	£28.08	£29.83	£29.32	£28.81	£27.60
250	£26.06	£26.18	£28.92	£28.80	£27.84	£29.59	£29.32	£28.68	£27.48
500	£25.82	£25.92	£28.80	£28.80	£27.60	£29.23	£29.32	£28.60	£27.24
1000	£25.76	£25.86	£28.56	£28.68	£27.00	£28.93	£29.32	£28.60	£27.24

 

Yes, things were similar in the Credit/Banking/Sub-Prime crisis.

Regarding silver Philharmonikers, these do not normally sell in voulme in the UK because they are not CGT exempt. This means most UK dealers would want a higher profit margin to make it worthwhile to stock them. If collectors just want one single coin, then an extra pound would not deter most buyers, but a volume investor would want a much lower cost price to offset the possible CGT. Also they are not likely to be as easy to liquidate.

As it so happens, I think we have a relatively small batch of them due to arrive in about a week, so it will be interesting to see how their price compares.

Lastly, it is also possible to legally avoid the VAT if you buy for "bonded" storage, in Zurich for example. Sure, it only really works for reasonable volume, and there are storage charges, but 20% VAT pays for about 30 years fully insured storage.

 

[Uksilverstackers]

Deleted

 

 

Edited August 5, 2021 by Uksilverstackers

[LawrenceChard]

15 hours ago, Uksilverstackers said:

Deleted

 

 

I could see from the notification e-mail you were thinking of saying "Chards Platinum (Taxable) QB example,  shows Premium as % which works well as an indicator 👍, but should maybe include (Ex VAT) on the Premium % headi..."

There was not enough room for it to fit, and the next column helps to clarify it:

Quantity	Premium %	Price Per Item (Exc. VAT)	Price Per Item (Inc. VAT)	Total (Inc. VAT)	Est UK Delivery
1	11.5	£818.02	£981.62	£981.62	£6.00
2	11.25	£816.19	£979.43	£1,958.86	£7.00
5	10.75	£812.52	£975.02	£4,875.10	£9.00
10+	9.5	£803.35	£964.02	£9,640.20	£12.00

 

Also more logical to show premium ex-VAT for non-UK buyers.

 

[LawrenceChard]

On 04/08/2021 at 15:34, LawrenceChard said:

For the past month, my gut feelings have been that the supply and delivery situation for popular UK gold and silver products has been easing, and edging towards normality.

For most of the last 15 to 18 months, there has been big demand for investment bullion products worldwide.

In the UK, this has naturally been particularly strong for British CGT exempt coins, such as gold sovereigns, gold Britannias, and silver Britannias, with demand also overflowing into gold and silver bars.

Any secondary market coins we bought in this period have sold out within hours or days. Naturally, many investors prefer these because of lower premiums, which has increased demand for new, fresh from the mint, products.

In the past month, we have received significant deliveries of 2021 gold sovereigns, gold Britannias, and silver Britannias.

We now have spare physical stock of 2021 silver Britannias, having received more than a tonne in the last few weeks, with more in the pipellne.

2021 gold sovereigns we have had spare physical stock for about 2 out of the past 4 weeks, with more due in soon.

2021 gold Britannias. Again, we have had a number of large deliveries, but not quite enough to fill all existing orders. This should also change by mid August.

This was just one of our recent silver Britannia deliveries (the monster boxes, not Mandi).

TSF stackers might be interested to know that there is often, but not always, slowdown in hot weather and holidays.

In combination with more readily available stock, this may mean slightly lower premiums on some of these coins over the next month.

 

Update:

As of today, we had received more of our awaited deliveries of 2021 gold sovereigns, 2021 gold Britannias, and 2021 silver Britannias.

This was enough to enable us to clear all outstanding orders for all three of these products (for probably the first time in 18 months if we include 2020 coins).

This marks a definite step towards normality.

We have seen a few big sales of the 2021 gold Britannias since weekend, so instead of having a few weeks of anticipated stock, we may well sell out in the next few hours, but... this still represents a big step.

Whether the situation continues to get closer to normal, and whether there are more delays in the next few weeks and months, is still too early to call, but we will be monitoring the situation on our usual daily basis.

 

 

[begineersluck]

i would of bought stock from you but sadly you dont allow credit card purchase which i use inproves my credit score so ended up buying 75 brits from Atkinsons ... but will check out chards today ,

[ChrisSilver]

4 hours ago, begineersluck said:

i would of bought stock from you but sadly you dont allow credit card purchase which i use inproves my credit score so ended up buying 75 brits from Atkinsons ... but will check out chards today ,

https://www.chards.co.uk/blog/why-we-are-saying-no-to-bullion-by-credit-card/107

[Rll1288]

So even after Brexit then the EU directive is still in place 🙂