Are we going to see smaller gold coins rise in popularity?

[JohnA1]

In the long run, I think no, we are not going to see smaller gold coins rise in popularity.

Gold keeps the same purchasing power in the long run, so what worked in ancient times will still work tomorrow. A sovereign will be buying what a sovereign used to buy.

Silver was used for smaller amounts, it makes sense to keep using it.

As fiat sinks lower, gold and silver will emerge yet again as the monetary metals they've always been.

[Petra]

Don’t mistake popularity for the fact that people will buy smaller gold as it is all they can afford. Basis being, something is better than nothing 😮

[Foster88]

2 hours ago, Petra said:

Don’t mistake popularity for the fact that people will buy smaller gold as it is all they can afford. Basis being, something is better than nothing 😮

That’s what I mean’t.

[Paul]

I don't think people will be buying smaller, the " average Joe " will be buying the sweet spot coins, 1/4oz / sovereign but just buy them less often now due to cost

[Scootermuppet]

When I started stacking, it was with Silver because that’s all I had the budget for. When I’ve earned more, I’ve bought gold - when I’ve earned less, I’ve bought silver again… and when it goes quiet as it has lately - I sell some to keep afloat 🤷🏻‍♂️

The size of coins / bars has only mattered (indirectly) when I’m buying - I’ve got X amount  - what will that get me?

I’d suspect there’s a fair few in a similar position 🤔

Edited November 9, 2023 by Scootermuppet
Extra info added

[Paul]

5 minutes ago, Scootermuppet said:

 🤷🏻‍♂️

I’d suspect there’s a fair few in a similar position 🤔

Everyone's stacking journey is different. 

Mine, I just love knowing I've converted some fiat £ debt tokens to the yellow metal each month, dont stress the maths. 

I've more gold this month, than I did last month.

I'm therefore richer/fatter as my gold grammes total goes up, than I was last month 

( or gold kg's in @James32 case )

If I get morbidly obese in gold,I'll worry about it when it happens. First world problems 

[artalien]

On 07/11/2023 at 20:30, JohnA1 said:

Gold keeps the same purchasing power in the long run

That seems to be a fact but it is also a fact that empires rise and fall. I'd expect a correlation between that rise and fall and the wealth of individual citizens within those empires.

The UK is still in the process of decline, I think, and therefore I expect the popularity of small gold to rise as the wealth of the individual decreases.

Here's hoping I'm wrong and the Universal Basic Income issued by the AI will be enough to buy some BIG shiny 🙃

Edited November 10, 2023 by artalien

[JohnA1]

1 hour ago, artalien said:

.

Here's hoping I'm wrong and the Universal Basic Income issued by the AI will be enough to buy some BIG shiny 🙃

...under the assumption programmable 'money' tokens will be easily convertible to real money. Hmmm...

If you're not fully up with your boosters etc I doubt that the UBI will keep flowing freely

[artalien]

5 minutes ago, JohnA1 said:

..under the assumption programmable 'money' tokens will be easily convertible to real money

Rabbit hole that is the future. Do you think programmable money will be the death of PMs?

I suppose we are considering the rise of small gold in relation to big gold. Just wanted to state that assumption in the context of the thread.

[JohnA1]

42 minutes ago, artalien said:

Rabbit hole that is the future. Do you think programmable money will be the death of PMs?

I suppose we are considering the rise of small gold in relation to big gold. Just wanted to state that assumption in the context of the thread.

I don't see PMs dying ever. Especially gold that is indestructible, like Captain Scarlet. They've been around long before us and they're not going anywhere.

Human nature hasn't changed through history. Short-term thinking and greed are part of who we are, so people fall in the same traps over and over again. PMs are a time-honoured way to bypass such traps.

Gold has traditionaly been storage of wealth, silver used for everyday trading (with copper as change).

The only new entrant here is blockchain technology that (sort of) eliminates the 3rd trusted party, so gold on blockchain could potentially be used even for tiny amounts, bypassing the monetary usage of silver and copper.

It would still have to be convertible to physical on demand, otherwise the whole fiat sham would have grounds to rise again.

So no, I don't see tiny gold coins/bars rising in popularity in the long run, modern tech can do that much better.

 

Gold holds its value over the centuries, so what an ounce used to buy, it will still buy a century later. Inflation is an artificial construct caused by corrupt governments, it is not natural. PMs are not going 'up', toilet paper and (demand for) debt are going downhill.

I don't think we're likely to be dealing with 1/20th ounce coins or grains of gold in the future, that is not gold's function, although it is extremely malleable and can do it if needed (eg: goldback notes)

 

I haven't got anything smaller than a sovereign, finding the increased premiums a big deterrent. If I come across half sovs with 1% premium I might get a handful, but that's it.

[artalien]

10 minutes ago, JohnA1 said:

Captain Scarlet

Legend!

 

11 minutes ago, JohnA1 said:

It would still have to be convertible to physical on demand, otherwise the whole fiat sham would have grounds to rise again.

Wouldn't we need small physical for that?

12 minutes ago, JohnA1 said:

1% premium

Count me in please, preferably they will be for sale in a seasonal dip.

Thanks for answering my question.

[goldsilverdash]

On 05/11/2023 at 14:59, HonestMoneyGoldSilver said:

All true and silver has a long history of disappointing stackers/investors. Historically though we should expect both gold and silver to beat inflation. Silver has hugely underperformed in the last decade relative to both gold and inflation. At some point mean reversion will return those real-term losses to both gold and silver, with silver having more to gain

In our high inflation economy the average UK household can afford to buy roughly a sovereign/month without affecting their finances. A lot of people will buy silver not out of choice but because it's their only remaining viable option. If all you can afford is 1/10th of gold then if you sell it's an equally big deal. But everybody can afford an ounce or two of silver. Silver has been used as a real currency in living memory (e.g. US Constitutional), while you'd have to be over 100 years old to remember folks using gold

You're right of course that some people will never buy silver, a lot of folks on TSF don't like it, but if gold booms like people expect even 1/10th will be out of reach for many. Sorry I've kind of de-railed. Fractional gold is great if you can buy it at low premiums and no doubt fractional will become more and more popular as gold price increases

The problems with silver are the high premiums (even higher than those on fractional gold) and in some cases the VAT.

[SidS]

I'm humming the Captain Scarlet theme tune now. 😁

[JohnA1]

1 hour ago, artalien said:

Wouldn't we need small physical for that?

 

Not small physical, just physical at an agreed unit. It could be one ounce, it could be 100gr, whatever is reasonably small to prove convertibility and reasonably large to deter frivolous exchanges to physical (that add transaction costs spread across all involved in the chain).

The idea of PMs on a blockchain is that once deposited and converted to tokens they would stay there for as long as possible. Obsessive changing back and forth would only lead to excessive premiums (storage, transport, admin etc) that would negate the blockchain efficiencies

[bluemoon]

I though the whole point of gold is that it's worth the same today as in times gone by? So in theory, a Britannia is just as "expensive" as it was 20 years ago. This talk of fractional Sovereigns just makes me think to simply use silver.

[artalien]

1 hour ago, SidS said:

I'm humming the Captain Scarlet theme tune now.

I just couldn't resist a link

 

Looking good after all these years, just like our favourite shiny.

[Coverte]

We are in an exceptional period of time, once again, not dissimilar to 2007/8:

2 quick  examples

The luxury watch market has crashed massively since QE ended

The used (very newish) used Porsche is likewise now in freefall - no longer selling; sellers just don't fully know it yet ....... 

IMHO therefore, it's therefore very hard to draw any long term definitive conclusions as to long term fractional pricing;

so I'll stick to my sovs and 1oz as far as I can - but I'm older and so not a good measure of overall market.

[HonestMoneyGoldSilver]

4 hours ago, artalien said:

Rabbit hole that is the future. Do you think programmable money will be the death of PMs?

I suppose we are considering the rise of small gold in relation to big gold. Just wanted to state that assumption in the context of the thread.

Programmable money will boost gold harder than a Saturn V rocket. The first to adopt programmable CBDCs will be China. The CCP might not have a heart of gold but they've got their hearts set on gold. The fringe elements of society in response will create a large market (the black market/darknet) that is totally detached from the central authorities. That might be gold (and silver) on a different blockchain using privacy tech or it might be what we already have - cryptos, cash (if still a thing), PMs, barter. For barter it will never be gold. A barter economy in modern context means the failure of fiat which Saturn V's the gold price. Silver in future could be as expensive or more expensive than gold is today. IMO it will be similar to Texas:- digital cash -> silver -> gold. The gold is the monetary insurance only attainable in large value blocks. Silver is the intermediary between goods/services and gold. The digital cash does the practical stuff

If gold booms it won't matter what size you hold. It will be too expensive for the ordinary person and the premiums would be tiny relative to the intrinsic value of the metal. For buying now I agree with @Paul - the best kind of gold is the kind you can afford. If you find 1/10th at the same premium as 1 ounce, then buy the 1/10th, but you won't find it. The end goal is the same - own 1oz of gold. Smaller is easier to sell but gold for me personally is not an item you sell or collect, it's insurance against your other investments and fiat holdings

[artalien]

11 minutes ago, HonestMoneyGoldSilver said:

The fringe elements of society in response will create a large market (the black market/darknet) that is totally detached from the central authorities. That might be gold (and silver) on a different blockchain using privacy tech or it might be what we already have - cryptos, cash (if still a thing), PMs, barter. For barter it will never be gold.

I think this is a distinct possible if cash is removed. Buy your illegals with silver.

[goldsilverdash]

5 hours ago, JohnA1 said:

The only new entrant here is blockchain technology that (sort of) eliminates the 3rd trusted party, so gold on blockchain could potentially be used even for tiny amounts, bypassing the monetary usage of silver and copper.

"Gold on a blockchain" doesn't even sort of eliminate a trusted third party (unlike real cryptocurrencies). You would have to put massive trust in the entity holding all that gold creating big counter-party risk.

 

[HonestMoneyGoldSilver]

33 minutes ago, goldsilverdash said:

"Gold on a blockchain" doesn't even sort of eliminate a trusted third party (unlike real cryptocurrencies). You would have to put massive trust in the entity holding all that gold creating big counter-party risk.

Yes we should trust 3AC, Celsius, Voyager, Terra Luna, FTX, Tether, Binance ........

There is 100% counterparty risk when using existing cryptos. There is no FDIC or equivalent. That's different from regular cash in the bank or a gold-backed sovereign currency that would also be insured. In the case of Texas, a 1-1 equivalency of physical gold and silver would be held in a local (state) vault. The metals would be there but even if they weren't, the value would still be backed by the state. It amazes me that anyone trusts crypto custodians in light of the actions of FTX, Tether, 3AC, Binance, Celsius, etc, etc. Sorry another derail I'll shut up now 🤗

[goldsilverdash]

6 minutes ago, HonestMoneyGoldSilver said:

Yes we should trust 3AC, Celsius, Voyager, Terra Luna, FTX, Tether, Binance ........

There is 100% counterparty risk when using existing cryptos. There is no FDIC or equivalent. That's different from regular cash in the bank or a gold-backed sovereign currency that would also be insured. In the case of Texas, a 1-1 equivalency of physical gold and silver would be held in a local (state) vault. The metals would be there but even if they weren't, the value would still be backed by the state. It amazes me that anyone trusts crypto custodians in light of the actions of FTX, Tether, 3AC, Binance, Celsius, etc, etc. Sorry another derail I'll shut up now 🤗

Indeed, it is incredible that people trust centralised crypto exchanges. But you don't have to, you can (and should!) hold your crypto funds in your own wallet for which you control the private keys.

Edited November 10, 2023 by goldsilverdash

[Bigmarc]

What's the smallest gold coin you can buy with an alloy in it? Half sov? 

Do you think they would make a quarter sov?

[JohnA1]

54 minutes ago, goldsilverdash said:

"Gold on a blockchain" doesn't even sort of eliminate a trusted third party (unlike real cryptocurrencies). You would have to put massive trust in the entity holding all that gold creating big counter-party risk.

 

Correct - hence the statement "(sort of) eliminates the 3rd trusted party"

But you would get the distributed ledger, along with the valued asset backing.

A modern equivalent of the GBP before WWI, when you could walk into a commercial bank and exchange the paper with 1 gold sov. Now you'd do it electronically with much smaller increments available. The parasites have had their way during the past century and now you need 400-odd paper GBPs to exchange for 1 gold sov

Edited November 10, 2023 by JohnA1

[Paul]