Gold Premiums

[LawrenceChard]

12 hours ago, Roy said:

Gold has always been measured in Troy ounces, hasn't it?

The 'modern' ounce bullion coin reflects the weakness in modern education, 'rithmetric ain't wot it once were!

I maintain that the gold sovereign is 'a fractional' but will acknowledge your 59 years in the trade, Sir, and may reconsider my position 😉

😎

You might be able to convince me about sovereigns being "fractionals", if you can tell me what the fraction is!

😎

[MrStacker]

An economic collapse and reset will happen either this year or early next year. Everywhere you look there is an issue arising. Something will give way. 

I do believe gold will shoot up in the 3rd quarter of 2023. Buy now or regret it later. 
 

The dips that everyone are familiar with won’t correlate the same this year. That’s just my feeling. 

[LawrenceChard]

11 hours ago, ZRPMs said:

I've had this argument before. A sovereign is a whole coin. The modern version replaced the Guinea. The fraction of that coin is the Half sovereign, Quarter sovereign. As suggested by the respective names. Half of a sovereign, Quarter of a sovereign. Meaning no disrespect, but I've heard mostly American's refer to the sovereign as a fractional coin but this is incorrect. Similarly I've heard people refer to gold as the yellow rock. Gold is not a rock its metal. The ore it comes from is rock. 

Quite right. IMO.

What do Americans know?

They say things like Monday through (or thru) Friday, when what they actually mean is Monday to Friday. Logically, if you go through something, then you come out the other side of it. Doors, for example. When you go through a door, you come out the other side. Do Americans stop at the door?, or perhaps become part of it?

Yellow Rock sounds like the name of some one-horse town in the USA. Turns out it is the name of a spectacularly bad Western movie (film), which is so bad that Wikipedia does not list it on its "Yellow Rock" disambiguation page:

https://en.wikipedia.org/wiki/Yellow_Rock

"People refer to gold as the yellow rock"? I've heard some dumb stuff so far in my lifetime! Are people getting even stupider?

😎

[sovereignsteve]

I always thought the use of the word "fractional" with regards to gold coins was pointless and frankly silly. Gold has never been practically traded as a 1 oz coin or in any other format; as previously stated, 1oz coins are a relatively new invention.

[LawrenceChard]

12 minutes ago, sovereignsteve said:

I always thought the use of the word "fractional" with regards to gold coins was pointless and frankly silly. Gold has never been practically traded as a 1 oz coin or in any other format; as previously stated, 1oz coins are a relatively new invention.

I think using "fractional" for half, quarter, tenth, twentieth, twenty-fifth, and fiftieth ounce coins makes good sense. It is certainly much quicker and easier than saying or typing "half, quarter, tenth, twentieth, twenty-fifth, and fiftieth ounce coins" every time you want to refer to any of them!

Sure, one ounce bullion coins are relatively new, and fractionals even newer, from 1980, but that's all the more reason we needed a "new" word to describe them.

😎

[sovereignsteve]

10 minutes ago, LawrenceChard said:

I think using "fractional" for half, quarter, tenth, twentieth, twenty-fifth, and fiftieth ounce coins makes good sense. It is certainly much quicker and easier than saying or typing "half, quarter, tenth, twentieth, twenty-fifth, and fiftieth ounce coins" every time you want to refer to any of them!

Sure, one ounce bullion coins are relatively new, and fractionals even newer, from 1980, but that's all the more reason we needed a "new" word to describe them.

😎

Fractional sovereigns, fractional britannias etc fine, as the baseline coin is known, but simply fractional gold without an accepted definition of the "whole" is confusing.

[ShineyMagpie]

5 hours ago, sovereignsteve said:

accepted definition of the "whole" is confusing

Yes that makes sense, without a source of reference, what are you talking about. I suppose the exception may be if you don't mind, e.g. walking into a dealer an asking do you have any fractional silver? I don't know if this acceptable vernacular or not?

[Roy]

6 hours ago, LawrenceChard said:

You might be able to convince me about sovereigns being "fractionals", if you can tell me what the fraction is!

😎

0.2354 ozt of course!

'The sovereign became a popular circulating coin, and was used in international trade and overseas, being trusted as a coin containing a known quantity of gold.'

Sovereigns were traded by weight, rather than 'face' value?

[LawrenceChard]

14 minutes ago, Roy said:

0.2354 ozt of course!

'The sovereign became a popular circulating coin, and was used in international trade and overseas, being trusted as a coin containing a known quantity of gold.'

Sovereigns were traded by weight, rather than 'face' value?

No, for most of their "life", they circulated at their nominal value of £1, and I suspect this was also the case in many other countries, although different buy / sell spreads on foreign exhange may have modified this, and there is often arbitrage to consider. In some countries, there were also black markets where sovereigns or other gold coins would have traded at a premium.

"being trusted as a coin containing a known quantity of gold" does not mean they were traded by weight for their bullion value, although it does not mean they were not either.

😎

[Roy]

Good point.

When we paid our debt to the US, weren't sovereigns melted down and sent as weight?

Not trying to argue here, just being clear 😊

[Petra]

28 minutes ago, Roy said:

Good point.

When we paid our debt to the US, weren't sovereigns melted down and sent as weight?

Not trying to argue here, just being clear 😊

Not all sovereigns, which is why despite mintage figures some dates are more valuable than others.

[Roy]

I may have got it the wrong way round!

The coins (Sovereigns) were sent to the US and then melted down.

The Daily Telegraph (Sydney, NSW : Fri 17 Dec 1915)

 

Now then, did we send them 20,000,000 sovereigns equal to £20,000,000 or

200 tons (US) = 5,833,333 ozt x 0.916 = 5,343,333, which at a pegged $20/oz would be $106,866,660?

Historical exchange rates anyone? 🤔

Edited January 10, 2023 by Roy

[CANV]

5 bucks a pound at the start.  probably nearer 3.25 for most of the war?  

[CANV]

the sovereign is the king/queen/er add whatever is needed these days, of gold coins.  its a pound.  (well it was).   all other coins are fractional or multiples..  I blame the Boks with their fancy dan Krugerand 

[LawrenceChard]

2 hours ago, Roy said:

Good point.

When we paid our debt to the US, weren't sovereigns melted down and sent as weight?

Not trying to argue here, just being clear 😊

Possibly, depending on when that was, although a settlement between governments might easily be on terms or valuations different from nominal value.

😎

[Petra]

1 hour ago, Roy said:

I may have got it the wrong way round!

The coins (Sovereigns) were sent to the US and then melted down.

The Daily Telegraph (Sydney, NSW : Fri 17 Dec 1915)

 

Now then, did we send them 20,000,000 sovereigns equal to £20,000,000 or

200 tons (US) = 5,833,333 ozt x 0.916 = 5,343,333, which at a pegged $20/oz would be $106,866,660?

Historical exchange rates anyone? 🤔

At the start of ww1 gold sovereigns were withdrawn and £1 and 10 shilling notes were issued. The government urged everyone to hand in/swap their sovereigns and half sovereigns. The last sovereigns in London being produced in 1917. Despite the numbers mentioned that were sent to the USA, prior to the outbreak of ww1 there was around 100,000,000 sovereigns in circulation. Plenty left over🤔

[Petra]

Another interesting point was that due to the rush to produce notes in England they ended up having ‘treasury notes’ which stayed in use for some time after the war. These were quickly made, initially out of stamp paper and a lot smaller than what was used before. Notes previously started at £5, meaning few people actually ever saw or used them. The new £1 and 10 shilling were tiny in comparison and difficult to use.

At this time Scotland with its own notes initially had problems as their notes were legal currency but not legal tender, so they could be refused and people ask for gold instead to pay debts

[LawrenceChard]

On 07/01/2023 at 23:17, Roy said:

I thought I'd start a new thread so people didn't think I was talking about them specifically!

Aren't premiums high at the moment?

Dealers selling Sovereigns @ nearly 10% and Britannias @ 20%? (in my head!).

 

On 08/01/2023 at 11:35, LawrenceChard said:

We have seen a few years of sustained demand for gold and silver bullion, which seems to have been wordwide. It is commone knowledge that Mints and producers have struggled to keep up production to meet demand, exacerbated by Covid and the transport problems it caused.

Production costs will also have increased due to energy price increases, for which we can mainly blame Russia for invading Ukraine and waging an energy price war on the rest of the world.

Most mints increased their premiums, including the RM on new sovereigns, which also affects older ones which were already in short supply compared with the high demand.

Even so, you can still buy brand new minty gold sovereigns for less than 8% premium, and less than 7% in quantity:

Quantity	Premium %	Price Per Item	Total	Est UK Delivery
1	7.85	US$473.75	US$473.75	£6.00
5	7.65	US$472.87	US$2,364.35	£7.00
10	7.6	US$472.65	US$4,726.53	£8.00
25	7.55	US$472.43	US$11,810.87	£12.00
50	7.5	US$472.21	US$23,610.25	£19.00
100	7.25	US$471.12	US$47,111.68	£31.00
250	7.1	US$470.45	US$117,612.91	£90.60
500	6.95	US$469.80	US$234,899.33	£155.60
1000+	6.9	US$469.57	US$469,568.90	£284.60

I don't know which dealers are asking 10%, but presumably they won't be selling many at 10+% premium, or at least not to TSF members, who mainly know better.

RM Gold Britannia premiums have only increased very slightly. I don't know where you have seen them at 20%. Did you have a bad dream?

They can be bought for between 4.3 and 5.0%:

Quantity	Premium %	Price Per Item	Total	Est UK Delivery
1	5	US$1,959.36	US$1,959.36	£7.00
5	4.8	US$1,955.62	US$9,778.10	£11.00
10	4.7	US$1,953.76	US$19,537.58	£16.00
20	4.6	US$1,951.88	US$39,037.67	£27.00
50	4.5	US$1,950.02	US$97,501.06	£64.00
100	4.4	US$1,948.16	US$194,815.89	£133.60
200+	4.3	US$1,946.28	US$389,256.91	£240.60

The above taken from a well-known Blackpool dealer's website.

It would have been better if the single price was 4.95%, then I could have said "for under 5%".

@ChardsCoinandBullionDealer  might even react to this!

😎

I noticed that our single piece premium on 2023 Gold Britannias did get changed on Monday, to 4.95%, although @ChardsCoinandBullionDealer kept it secret from me!

Today, the team did a more thorough review, and made a few more reductions:

Quantity	Premium %	Price Per Item	Total	Est UK Delivery
1	4.75	£1,624.17	£1,624.17	£7.00
5	4.6	£1,621.84	£8,109.20	£11.00
10	4.5	£1,620.29	£16,202.90	£16.00
20	4.4	£1,618.74	£32,374.80	£27.00
50	4.3	£1,617.19	£80,859.50	£64.00
100	4.25	£1,616.42	£161,642.00	£133.60
200+	4.25	£1,616.42	£323,284.00	£241.60

This time, they let me know!

😎

[LawrenceChard]

On 07/01/2023 at 23:17, Roy said:

I thought I'd start a new thread so people didn't think I was talking about them specifically!

Aren't premiums high at the moment?

Dealers selling Sovereigns @ nearly 10% and Britannias @ 20%? (in my head!).

On 08/01/2023 at 11:35, LawrenceChard said:

We have seen a few years of sustained demand for gold and silver bullion, which seems to have been wordwide. It is commone knowledge that Mints and producers have struggled to keep up production to meet demand, exacerbated by Covid and the transport problems it caused.

Production costs will also have increased due to energy price increases, for which we can mainly blame Russia for invading Ukraine and waging an energy price war on the rest of the world.

Most mints increased their premiums, including the RM on new sovereigns, which also affects older ones which were already in short supply compared with the high demand.

Even so, you can still buy brand new minty gold sovereigns for less than 8% premium, and less than 7% in quantity:

 

I don't know which dealers are asking 10%, but presumably they won't be selling many at 10+% premium, or at least not to TSF members, who mainly know better.

RM Gold Britannia premiums have only increased very slightly. I don't know where you have seen them at 20%. Did you have a bad dream?

They can be bought for between 4.3 and 5.0%:

 

On 08/01/2023 at 16:30, Roy said:

https://www.chards.co.uk/2023-gold-britannia-bullion-one-tenth-coin/17168

https://www.royalmint.com/invest/bullion/bullion-coins/gold-coins/britannia-2023-110-oz-gold-bullion-coin/

I'm too poor for ouncers ☹️

I happened to look at your original post again today, and a thought belatedly occurred to me:

If I had realised that when you said "Britannias", you meant tenth ounce ones, I should have asked you whether the "sovereigns" you were talking about were halves or quarters!*

* And hasn't somebody started making eighth sovereigns?

😎

[sovereignsteve]

On 10/01/2023 at 19:27, Roy said:

The coins (Sovereigns) were sent to the US and then melted down.

Should have sent them fakes

[Bogart]

On 07/01/2023 at 23:45, Roy said:

There have always been high premium bullion coins, but usually with reason.

e.g.

Libertads

Pandas

Somalia Elephants

Buffalos

but you buy these because you like them, not because it makes sense!

 

Exactly I am a sucker for anything with 4 legs, especially Pandas. Got my 2023 at 6% over which I thought was not bad.

[Roy]

3 hours ago, sovereignsteve said:

Should have sent them fakes

Plot twist!

😄

We did, and it wasn't discovered until August, 1971!