What would you do? Gold buying dilema

[Arisian]

With the approach of the Coronation sale from the Royal Mint I’m trying to decide on my buying strategy.

While I realise it’s going to be very difficult, if not impossible, to get a hold of one of the 2oz or 5oz Gold coins I’m wondering if I should try?

OR

Rather than spending £13-14000 on a 5oz Proof coin, would I be better advised to put that money into Bullion Brittanias which would buy about 8oz?

I’m looking at a 10 year investment period.

I’m very much interested in the wisdom of the crowd on this.

[Anteater]

The first question I would ask myself is "what am I investing for"? If it's growth then the conventional wisdom would be to avoid bullion. I have bullion not for investment growth, but for a hedge (insurance) against Bad Things[tm] happening and a greater degree of independence from The System[tm].

I have no expertise in numismatics and so no opinion on how the 5oz proof will do over time, however I subscribe to the idea that you should only invest in stuff you understand. So unless you feel that you understand the market and the risks and you have your own view on the investment that you are confident in, I'd avoid it. (Also bear in mind that having that much value in a single item will likely make it less liquid than it otherwise would be.)

Edited April 19, 2023 by Anteater

[Arisian]

Yes I’ve been buying Silver and Gold since 2011 so have acquired a little knowledge along the way. Most of my metal investments are held in BullionVault and I’ve been moving a small amount out of BullionVault into physical, mainly for the pleasure of actually owning beautiful things. 
so my reason for buying the 5oz would be primarily for the pleasure of buying a rare thing of beauty. But I just need to pinch myself first to make sure this isn’t a really bad idea and would I just be better off leaving it in BullionVault or buying physical bullion.

I don’t mind if it’s not the best investment return, for the exchange of enjoyment in ownership. Just so long as it’s unlikely to be a real dog.

[Chorlton]

Worth considering how and when you would sell whatever you may decide to invest in. Any sudden sale for various reasons could cost you a fair amount of loss in the price to sell quickly or mean you have to sell when prices are lower.

[CazLikesCoins]

In ten years whatever you buy will have probably tripled in value and a 10oz lump of gold will be hard to shift short of bullion dealers. Do you really want to be stuck with that when you could have diversified into smaller denominations making it easier for you to sell, split, and transport? Also consider storage. Is this an eggs in one basket approach or will you be using numerous secure storage locations? £14000 isn't a massive amount in terms of gold acquisition but its still substantial and needs looking after safety. If it were me, full sovereigns. Factor in secure storage, easily £100 + annually. It's a nice amount of money to play with but as I mentioned if it were me sovereigns all the way.*

*All of this waffle was brought to you by my opinion, which is often not worth listening to  

[Arisian]

1 hour ago, Chorlton said:

Worth considering how and when you would sell whatever you may decide to invest in. Any sudden sale for various reasons could cost you a fair amount of loss in the price to sell quickly or mean you have to sell when prices are lower.

Thank you for point, Yes I have thought of exit strategy and although I said 10 years the expectation is It’ll be the next generation that has the pleasure of selling it. I’m fortunate enough to have enough liquidity elsewhere in my portfolio that I don’t expect the need to sell - but never say never right! Essentially this money is profit taking from the BullionVault account. 
I put some extra money in 5 or 6 weeks back and just caught the rise quite nicely. Taking the profit out and putting it into physical seems like a sensible diversification to reduce the 3rd party BullionVault risk. But which physical is the question.

there is also a taxation issue with CGT, putting it into legal tender will help with that, especially with the CGT limit going to £3000 next year.

[Arisian]

7 minutes ago, CazLikesCoins said:

In ten years whatever you buy will have probably tripled in value and a 10oz lump of gold will be hard to shift short of bullion dealers. Do you really want to be stuck with that when you could have diversified into smaller denominations making it easier for you to sell, split, and transport? Also consider storage. Is this an eggs in one basket approach or will you be using numerous secure storage locations? £14000 isn't a massive amount in terms of gold acquisition but its still substantial and needs looking after safety. If it were me, full sovereigns. Factor in secure storage, easily £100 + annually. It's a nice amount of money to play with but as I mentioned if it were me sovereigns all the way.*

*All of this waffle was brought to you by my opinion, which is often not worth listening to  

Those are great points Caz, thank you. Offsite secure storage is already in action and I don’t keep anything at home. But your other point is really the crux of the matter. My heart says I want to own and enjoy a once in a lifetime piece, but my head reflects what you say and thinks bullion has a lot of exit advantages but is somewhat boring.

Edited April 20, 2023 by Arisian

[flyingveepixie]

9 minutes ago, CazLikesCoins said:

If it were me, full sovereigns.

Me too!   There are obviously a fair amount of wealthy folk out there who could consider buying a £14000 lump of gold if, or when, the time to resell comes along, but if you were to buy 35 sovereigns instead at approx £400 each, they would be a lot easier to shift in the future.   It's a personal thing of course, but I'd go with Caz's advice....🤔

Edited April 20, 2023 by flyingveepixie

[Arisian]

2 minutes ago, flyingveepixie said:

Me too!   There are obviously a fair amount of wealthy folk out there who could consider buying a £14000 lump of gold if, or when, the time to resell comes along, but if you were to buy 35 sovereigns instead at approx £400 each, they would be a lot easier to shift in the future.   I'd go with Caz's advice....🤔

Yep I can see the sense in that. 😬

[MBTPSilver]

I would never consider a Proof coin an investment really. If you will really enjoy the coin then it's nice as a purchase/collectable, but with a premium of around 60% + it's not an investment coin. Gold could certainly rise by that much in 10 years, at which point you could even sell to a dealer and make some money. Selling privately though there won't be much of a market for a 5oz gold proof coin.

You could do a mix if you wanted, go for a 2oz proof coin for the pleasure of owning it, and then the rest into Sovs/Brits which will be easier to sell and more likely to realise some good growth. It's a very personal choice though, and I'd certainly be all in on bullion.

[SeverinDigsSovereigns]

I think it's better to buy 5x 1oz proof than 1x 5oz proof of the same design simply because of liquidity reasons. If you want "investment" not "collection" then the standard bullion Brits and sovereigns are the way to go.

[Orpster]

If you want to be able to hold and appreciate it, avoid proof as handling it will immediately devalue it.

I am not a fan of modern proofs, especially from the Royal Mint who's premiums have gone up as fast as their quality control has gone down.  For your money you can get a nice full tube of memorial sovereigns or some first year KCII Britannia's, then you can handle them while pretending to be a pirate (which, cough, I have heard some people, cough, may do)

  

[CazLikesCoins]

3 hours ago, Arisian said:

Those are great points Caz, thank you. Offsite secure storage is already in action and I don’t keep anything at home. But your other point is really the crux of the matter. My heart says I want to own and enjoy a once in a lifetime piece, but my head reflects what you say and thinks bullion has a lot of exit advantages but is somewhat boring.

Have you ever been truly bowled over by a dream item of anything? After the novelty wears off they usually become a burden and quickly sold on and replaced by more mundane but practical things. We’re hard wired to want the best but most of the time it’s stressful when we get it. Live like a pauper. Happy days.  

[Stuntman]

I'd echo the general consensus that it makes better investment sense to buy the bullion coins, or perhaps a 1 oz gold proof coronation coin and the rest in bullion.  Maybe consider one or two quintuple sovereigns if you want something big, gold and impressive.  There's probably more of a market for these, either in Brilliant Uncirculated or in Proof.

NIce dilemma to have!

 

[Silverlocks]

13 hours ago, Arisian said:

With the approach of the Coronation sale from the Royal Mint I’m trying to decide on my buying strategy.

While I realise it’s going to be very difficult, if not impossible, to get a hold of one of the 2oz or 5oz Gold coins I’m wondering if I should try?

OR

Rather than spending £13-14000 on a 5oz Proof coin, would I be better advised to put that money into Bullion Brittanias which would buy about 8oz?

I’m looking at a 10 year investment period.

I’m very much interested in the wisdom of the crowd on this.

I've seen folks have real trouble shifting big gold proofs here on TSF on more than one occasion.  Not many folks have a spare £15,000 to throw about on a single coin, so they're prone to liquidity problems.  Most proof coins, even from the RM, don't hold their value and make a poor investment.  You will quite probably take a bath of £5,000 or more on one of the 5oz proofs if you try to re-sell it.  IMO these are bad mojo.

You would be far better off buying Brits or Sovs - and don't for the love of god buy them from the Royal Mint web site either.  Shop around the major bullion dealers for the best price -  as a starting point, for Brits try HGM, Chards, Tavex, Bairds or Atkinsons, and for Sovs try Bairds, HGM or Blundell's.  You could also try the secondary market - here on TSF or various FB groups, but avoid Ebay as the prices will be too high.

If you're going to get into sovereigns, you should do your homework.  At a minimum, get a copy of the Marsh book The Gold Sovereign.  Other useful books include Spink's Coins of England and the United Kingom, and Allen's Grading British Coins.

Edited April 20, 2023 by Silverlocks

[Stuntman]

Regarding things of beauty and if you don't have any already - 10 oz silver coins or 1 kg silver coins are fantastic things in-hand and are much more accessible in terms of purchase price.  Not the best investment by any means, but that's not really the point of them.

Edited April 20, 2023 by Stuntman
spelling

[Anteater]

4 hours ago, Arisian said:

there is also a taxation issue with CGT, putting it into legal tender will help with that, especially with the CGT limit going to £3000 next year.

There's another risk there - there's no guarantee that they won't remove the CGT exemption for UK tender precious metal coins in the future. If they do then it might be easier to have more and smaller coins which can be sold over time using multiple years' CGT allowances.

[Arisian]

Great advice from everyone - thank you.

I don't hear anyone say buy it :-) 

Often I do hear pundits say "buy the best coin you can" - but I guess that tends to be in the numismatic areana. 

Ok I'll stick to the 1oz Coronation if I can get one and consider my choices from there. I'll report back.

Again thank you to eveyone who spent time to comment.

[Wileyfox]

I like this question - having funds already in gold in BV is a good position to be in.

What would I do?

I would spend ~£10k on a tube of best value sovs and then spend the rest on something special. I prefer my gold old and with some history, I also prefer to be able to touch and feel it.
I don't know this market well but if I had £3-4k to spend on a proof I would go one King's coronation back in time and opt for a 1937 George VI proof sovereign.

I think you can have the best of both worlds, liquid bullion and also the pleasure of owning a rare thing of beauty.

[SidS]

As a numismatist, I wouldn't say buy the best coin you can, buy the coin you like - so long as the price is right and fair.

Sometimes there's more rewards to be had from buying a beautifully toned EF coin than a PF70. On technical grounds the PF70 is superior, but it might not have the soul of the EF.

As for your purchasing conundrum, I'd echo the sentiments of all those who have posted before me. A bigger price tag doesn't mean a better coin, it just makes the potential future buyers a smaller pool to sell to.

[CazLikesCoins]

7 hours ago, flyingveepixie said:

Me too!   There are obviously a fair amount of wealthy folk out there who could consider buying a £14000 lump of gold if, or when, the time to resell comes along, but if you were to buy 35 sovereigns instead at approx £400 each, they would be a lot easier to shift in the future.   It's a personal thing of course, but I'd go with Caz's advice....🤔

My advice is probably as risky as getting a blast in the face from @HerefordBullyun's double balloon knots 🤣 but sovs seem safe. 

[Stuntman]

Thinking about it further - if I had that sort of money to invest and wanted to have something to commemorate the Coronation, I'd probably try for one of the 5 coin proof sovereign sets and put the rest into new bullion sovereigns and/or 1 oz Britannias.

[Pete]

I would stay clear of commemorative proof coins that sell at high premiums.
I have direct personal experience with beautiful ( some very low mintage ) FDC condition gold Britannia and Sovereign boxes sets.
When I wanted to sell these sets I found it very difficult to find buyers willing to pay more than bullion prices.
I also spoke to main dealers that had exactly the same sets advertised with premiums often approaching 100% but they would not even buy at spot price at the time.
You can get attached to a set of coins believing they will retain value because you paid a high price or it is a very limited coin or set.
Unfortunately when you are selling you may not find others sharing your views so will be extremely disappointed.
Just my viewpoint but you did ask the question inviting comments.
 

[Stuntman]

I think that the 2023 Coronation sovereign set will probably do quite a bit better than a sovereign set which was just a 'normal' obverse and reverse.  Certainly in the longer term. I expect the same to be true of the 2017 and both 2022 sets, for example.

I do agree with @Pete's point in general though.  And I don't own any of these sets!

[CazLikesCoins]

15 minutes ago, Pete said:

I would stay clear of commemorative proof coins that sell at high premiums.
I have direct personal experience with beautiful ( some very low mintage ) FDC condition gold Britannia and Sovereign boxes sets.
When I wanted to sell these sets I found it very difficult to find buyers willing to pay more than bullion prices.
I also spoke to main dealers that had exactly the same sets advertised with premiums often approaching 100% but they would not even buy at spot price at the time.
You can get attached to a set of coins believing they will retain value because you paid a high price or it is a very limited coin or set.
Unfortunately when you are selling you may not find others sharing your views so will be extremely disappointed.
Just my viewpoint but you did ask the question inviting comments.
 

Well said. Royal mint have got quite a racket going. Give a sov a spit and polish and stick it in a box. 500% mark up. 😅 Doesn't stop me liking them tho