Gold Premiums

[dicker]

Don’t underestimate the CGT change on people’s behaviour. 

Many people will look for alternatives!

[LawrenceChard]

12 hours ago, 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!).

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!

😎

[Happypanda88]

11 hours ago, 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!

 

With regards to premiums on gold coins, I think it could also depend on where you are in the world. 

In the UK, sovereigns and Brits are popular and in high demand. So I suspect dealers can now play the market by jacking up premiums and still see punters queueing up for them. 

Elsewhere in the east, LPM sells 1oz Brits typically about 4% premium and current year Pandas around 3.5%. There are sometimes deals on Elephants. But Buffalos and Libertads are in the league of their own and difficult to justify buying them.

[dicker]

From what I have seen, Sovs are “King” at the moment.  Price point is about right, CGT favourable, and super liquid.  

What surprised me is the demand for pre 2000 Sovs.  

[ZRPMs]

1 minute ago, dicker said:

What surprised me is the demand for pre 2000 Sovs.  

My brother surprised me the other day. He said he bought some Gillick sovereigns instead of some veiled Victoria's. Only bullion coins but he said they may be more collectable now Her majesty has died, also not as worn. I wonder if this is the sentiment out there?  

[dicker]

Just now, ZRPMs said:

My brother surprised me the other day. He said he bought some Gillick sovereigns instead of some veiled Victoria's. Only bullion coins but he said they may be more collectable now Her majesty has died, also not as worn. I wonder if this is the sentiment out there?  

Possibly, yes. Plus they are more attractive than copper toned Sovs post 2000.

 

[ShineyMagpie]

11 minutes ago, dicker said:

copper toned Sovs post 2000.

Yes some people are not a fan of the "newer" colour tone

[Pete]

It would be interesting to know what fellow members set as their redline threshold in premium over spot for not buying (a) a sovereign and (b) a one ounce gold Britannia or similar.
My threshold is 5% for a coin that I would like to buy rather than just pick-up.
 

[CollectForFun]

2 hours ago, Happypanda88 said:

With regards to premiums on gold coins, I think it could also depend on where you are in the world. 

In the UK, sovereigns and Brits are popular and in high demand. So I suspect dealers can now play the market by jacking up premiums and still see punters queueing up for them. 

Elsewhere in the east, LPM sells 1oz Brits typically about 4% premium and current year Pandas around 3.5%. There are sometimes deals on Elephants. But Buffalos and Libertads are in the league of their own and difficult to justify buying them.

Good point. At German dealers, 1oz Brits start at 2.5-3.5% and sovs at 5-6% premium. Of course you can also find dealers who ask 10%. But in general it does not seem the UK coins would be suddenly less available or more expensive on German market, as an example.

[ZRPMs]

@Pete Not really given much thought until now. I normally shop about, find a good price and as long as other places / dealers aren't too far from that, I'll grab them. The bulk of my purchases are only bullion though.

Edited January 8, 2023 by ZRPMs

[James32]

23 minutes ago, Pete said:

It would be interesting to know what fellow members set as their redline threshold in premium over spot for not buying (a) a sovereign and (b) a one ounce gold Britannia or similar.
My threshold is 5% for a coin that I would like to buy rather than just pick-up.
 

Mine isn't a percentage over spot but more of an arbitrary number. £1550 on generic bullion 1oz coins to £1650 on higher premium pieces...needles to say I haven't bought a 1oz coin in weeks😆  for this to change in my tiny mind, I need spot to sustain itself at current level for a whole month.

As for sovereigns, I don't care if the artist was Mary Gillick or Walt Disney, anything over £385 feels heavy.

[Roy]

17 hours ago, Roy said:

I bought some of the QE2 2023 Brits 'cos they are an interesting coin. I didn't think about the price, but when I looked earlier to buy some more, I was surprised to see the premiums. 20% for little Brits!

 

4 hours ago, LawrenceChard said:

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?

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 ☹️

Edited January 8, 2023 by Roy

[LawrenceChard]

4 hours ago, 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 don't ever refer to those as "Britannias", they are "tenth ounce Britannias", and I would never recommend them to anyone for investment, because of the higher premiums.

Similar with fractional gold bullion coins of any type, such as Krugerrands. If I refer to a "Krugerrand", I mean a one ounce gold one, otherwise I would say "silver Krugerrand", or "Kruger half", etc.

We do deal in secondary market fractionals when available at competitive premiums, occasionally we have been able to offer half Krugers, or other half ounce gold coins for premiums similar to or lower than one ounce ones, in which case, they are worth buying as an investment.

If someone wants a fractional as a collectable, then I would never try to stop them.

😎

[Roy]

Isn't a sovereign a fractional?

Do you ever/have you ever referred to 'the half sovereign'? 🤔

 

[Bratnia]

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

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%".

I believe Chard's buy at close to 0.5% premium (Britannia one ounce gold coins) so could claim a 'spread' of less than 5% ☺️

[LawrenceChard]

23 hours ago, Roy said:

Isn't a sovereign a fractional?

Do you ever/have you ever referred to 'the half sovereign'? 🤔

No, I would not consider "a sovereign" to be "a fractional". Since 1817, a gold sovereign has always been a gold coin with a legal tender value of £1.

I do refer to half sovereigns and quarter sovereigns as fractional sovereigns, and also to double sovereigns and quintuple sovereigns as multiples.

If you mean "fractionals" because a sovereign contains approximately a quarter troy ounce of gold, then no, because modern gold sovereigns have existed since 1817, whereas modern "one ounce" bullion coins only came into being quite recently, in 1967.

Your second question is rather ambiguous. I would indeed say "the half sovereign" if I was referring to a specific half sovereign, but use the indefinite article if I was referring to a half sovereign in general.

😎

[Roy]

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 😉

😎

 

[ZRPMs]

20 minutes ago, Roy said:

I maintain that the gold sovereign is 'a fractional'

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. 

[ShineyMagpie]

On 08/01/2023 at 22:20, Roy said:

Do you ever/have you ever referred to 'the half sovereign'?

Yes, when I'm talking about a half sovereign. I'm guessing I have misunderstood your question here?

I do understand how/why some people could refer to a sovereign as fractional. If you were talking a 1oz coin, by comparison then sovereign is "fractional" but I do also think a sovereign is a full coin, and therefore can't be fractional. 

[James32]

2 minutes ago, ShineyMagpie said:

Yes, when I'm talking about a half sovereign. I'm guessing I have misunderstood your question here?

I do understand how/why some people could refer to a sovereign as fractional. If you were talking a 1oz coin, by comparison then sovereign is "fractional" but I do also think a sovereign is a full coin, and therefore can't be fractional. 

 

[ShineyMagpie]

@James32 made sense in my head 🤣

[Anteater]

Mostly from watching Youtube videos I think there are two (similar but different) common uses of the word "fractional" for gold (so far as stackers are concerned, at least):

a. anything smaller than 1ozt; and

b. simple fractions of 1ozt (so excluding sovereigns, ECU, etc).

 

Edited January 9, 2023 by Anteater

[ShineyMagpie]

3 minutes ago, Anteater said:

"fractional" for gold (so far as stackers are concerned, at least):

a. anything smaller than 1ozt; and

b. simple fractions of 1ozt

This is what my simple head was trying to say, but @Anteater has put it far more eloquently 

[flyingveepixie]

8 hours ago, ShineyMagpie said:

Yes, when I'm talking about a half sovereign. I'm guessing I have misunderstood your question here?

I do understand how/why some people could refer to a sovereign as fractional. If you were talking a 1oz coin, by comparison then sovereign is "fractional" but I do also think a sovereign is a full coin, and therefore can't be fractional. 

I agree with you. My own definition would be that a sovereign is a full coin which is measured in a fraction of a troy ounce, ie a quarter.  But definitely a full coin with it's own fractions as noted above.

[ShineyMagpie]

1 hour ago, flyingveepixie said:

I agree with you

I'm glad that my babbling made sense to someone 😅