bars or sovereigns . . . long term invest want to keep it simple 💰👑

[richGOLD]

hey folks new here,

I've spent a few weeks researching gold as i want to diversify some of my cash with banks looking fairly shaky nowadays.

My initial inclination was to buy gold bars but have read a lot about fakes, bars not being as liquid and I don't really like you have to keep them in a plastic wrapper. The general consensus is sovereigns have more advantages over bars.

However I don't really want to go down the rabbit of collecting and selecting different years, heads etc. as I procrastinate enough over other things.

I'm thinking I'll start with 10k and maybe keep that up annually. So far I've been looking on bullionbypost.eu as I'm in Portugal and also bitgild.com.

Any advice would be appreciated, and especially some suggestions on good sovereigns to hold for the long term. 

Ta,

Rich 

[MBTPSilver]

If you're just buying for investment purposes you'll want to be a close to spot price as possible (within reason). If you're buying from a reputable dealer like BBP you won't need to worry about fakes, so if bars are a lot cheaper then go for bars. I do prefer coins, but here in the UK we have CGT exemptions to benefit from, you'd have to see if there's something similar in Portugal.

[Bigmarc]

Isn't it the escudos

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

 

[Petra]

Obviously, where you live is a little different to us here in the UK, but go with what you can get at the best price. I have a few small (very) gold bars … they are nice, but I have mainly gold sovereigns and smaller. Each to their own, but go for what fits in with your position best… maybe a bit of both?🤔😮good luck whichever way you go.

[Ignorant]

Most people advise to buy the cheapest i.e. bars. However, keep in mind that reputable dealers generally pay below spot for bars in comparison to coins. Yes, bars are cheaper, but you’ll have to hold on to them relatively longer to see any return on investment. Plus selling bars to private individuals is much more tedious due to questionable provenance and risk of counterfeiting.

Edited December 1, 2023 by Ignorant

[SeverinDigsSovereigns]

Agree with @Ignorant bars can be counterfeit, not least the cast bars, whereas many experienced sovereign collector will spot a fake upon sight. It also depends on the size of bar, if it's too thick people could insert tungsten. Minted bars are safer in this regard, but they have higher premiums so why not just minted coins. 

[dicker]

Sovs for liquidity.  

[Spyder]

Knowing that you are in Europe and using Euros, why not see what deals @SVcollector on Sovereigns. It would be cheaper for you than buying from BBP. 

100% Keep away from bars. More headaches than they are worth.

[Booky586]

Check out the Portuguese taxes.

In the UK gold bars are liable for capital gains tax, whereas sovereigns aren't.

[Gruff]

It'll come down to your preference for bars or coins and only you can way up the risk of tax free or not in PT. 

As many have said above, we all like to try and get as close to spot as possible, but due to the UK government, the vast majority will aim for sovs or fractional brits (gold) as they are VAT and CGT free. This is because the coins are classed  as legal tender.
Due to this, the above have increased liquidity if you needed to sell some in a short time frame.

Edited December 3, 2023 by Gruff
Update

[richGOLD]

thanks folks

I can actually order to an address in UK. Been looking at these;

https://atkinsonsbullion.com/gold/gold-coins/1oz-gold-coins/pre-owned-post-2012-uk-britannia-1oz-gold-coin-mixed-dates

 

Premium is just over 2% on these and CGT / VAT free. Thoughts?

[17RSB]

Hi everyone

I am also new and had the same question but I took the plunge and went for sovs over bars purely because of how liquid they are especially on here. 

[JohnA1]

12 hours ago, richGOLD said:

Premium is just over 2% on these and CGT / VAT free. Thoughts?

2% premium on sovs is pretty good. Bars will have no advantage I can see - plus sovs are recognised all over the world.

[Silverlocks]

On 30/11/2023 at 18:21, richGOLD said:

hey folks new here,

I've spent a few weeks researching gold as i want to diversify some of my cash with banks looking fairly shaky nowadays.

My initial inclination was to buy gold bars but have read a lot about fakes, bars not being as liquid and I don't really like you have to keep them in a plastic wrapper. The general consensus is sovereigns have more advantages over bars.

However I don't really want to go down the rabbit of collecting and selecting different years, heads etc. as I procrastinate enough over other things.

I'm thinking I'll start with 10k and maybe keep that up annually. So far I've been looking on bullionbypost.eu as I'm in Portugal and also bitgild.com.

Any advice would be appreciated, and especially some suggestions on good sovereigns to hold for the long term. 

Ta,

Rich 

Sovereigns offer a nice sweet spot of liquidity, low premiums and some nice tax exemptions, so they're a no brainer if you want to accumulate gold.  Having said that, it pays to have some idea of the numismatics of sovereigns if you're going to get into them.  The trio of Marsh, Allen and Spink are a good start to do some homework.

A safe start is Gillicks, Machins, and perhaps George V.  These are all readily available in good condition and low premiums, so you can buy/sell with about as low risk as is possible with sovs, or gold in general.  As they're very common, sovs generally go for lower premiums than gold bars of similar size, or in fact most gold coins of that size.  

Protip: Don't buy shields for the sake of buying shields. By and large, these days they're being sold at prices where the vendor has already extracted the value of them, so there's no particular investment advantage and it's easy to overpay.  They're not as uncommon as some would make out,¹ and there are a lot of chancers about flogging poor quality examples at rather inflated prices.  

If you're feeling more adventurous, you can go into pre-WWI sovs, but you do have to start paying more attention to the condition.  Allen's Grading British Coins is a quick guide to what sovereigns (and various other coins) should look like in various grades, so you can use it as a guide to estimate the grade of sovs.  Marsh's The Gold Sovereign has a list of all the variations mintages and can help you identify sovs, and Spink's Coins of England and the United Kingdom has some indicative prices in various grades, so if you find something unusual then you might be able to get some sense of a dealer price.  Chances are you wouldn't realise that much yourself, but you can sometimes identify items that might be worth more than just bullion value.

You can do sovs with limited knowledge if you know what to stick to, and then push the boat out a bit if you're feeling more confident later.

Edit: I notice you're in Portugal, so the admonishments about capital gains tax don't apply (but do your homework on the tax laws there).  For a start, you could also look up some of the other European dealers - suissegold.eu, auragentum.de, or aurinium.de, for example; you might get better prices than bullion by post.  There are also other coins such as 20 francs (French roosters or Angels, Swiss 20 franc Vrenellis) that also go at low premiums like sovereigns.

Sovs don't have quite the advantage over bars on the continent than they do here in the UK, so if you see bars going at a good price then it can still be worth buying them.  Fractional gold is much more liquid than 1oz bars or coins these days. Don't go buying anything bigger than 1oz, and consider getting some fractional gold of 5-10g into your portfolio if you go buying bars - but only at the right price.  Small bars can have quite high premiums, but if you see some come up at the right price there's no reason not to buy them.

£10k pa isn't unreasonable if you can afford it.  That would get you about 20 oz over 3 years or so.  Take stock then, and decide what mix of PMs and other investments you want going forward.

1 - Every sovereign minted in London between 1825 and 1871 is a shield, and about half of all Australian sovs minted between 1872-1887.  Shields are not uncommon, but as they were circulated coinage, examples in good condition are less common.  There are lot of poor quality shields on the market, and if you overpay for poorer quality items you might not get the money back out.

Edited December 6, 2023 by Silverlocks

[17RSB]

3 minutes ago, Silverlocks said:

Sovereigns offer a nice sweet spot of liquidity, low premiums and some nice tax exemptions, so they're a no brainer if you want to accumulate gold.  Having said that, it pays to have some idea of the numismatics of sovereigns if you're going to get into them.  The trio of Marsh, Allen and Spink are a good start to do some homework.

A safe start is Gillicks, Machins, and perhaps George V.  These are all readily available in good condition and low premiums, so you can buy/sell with about as low risk as is possible with sovs, or gold in general.  As they're very common, sovs generally go for lower premiums than gold bars of similar size, or in fact most gold coins of that size.  

Protip: Don't buy shields for the sake of buying shields. By and large, these days they're being sold at prices where the vendor has already extracted the value of them, so there's no particular investment advantage and it's easy to overpay.  They're not as uncommon as some would make out,¹ and there are a lot of chancers about flogging poor quality examples at rather inflated prices.  

If you're feeling more adventurous, you can go into pre-WWI sovs, but you do have to start paying more attention to the condition.  Allen's Grading British Coins is a quick guide to what sovereigns (and various other coins) should look like in various grades, so you can use it as a guide to estimate the grade of sovs.  Marsh's The Gold Sovereign has a list of all the variations mintages and can help you identify sovs, and Spink's Coins of England and the United Kingdom has some indicative prices in various grades, so if you find something unusual then you might be able to get some sense of a dealer price.  Chances are you wouldn't realise that much yourself, but you can sometimes identify items that might be worth more than just bullion value.

You can do sovs with limited knowledge if you know what to stick to, and then push the boat out a bit if you're feeling more confident later.

 

1 - Every sovereign minted in London between 1825 and 1871 is a shield, and about half of all Australian sovs minted between 1872-1887.  Shields are not uncommon, but as they were circulated coinage, examples in good condition are less common.  There are lot of poor quality shields on the market, and if you overpay for poorer quality items you might not get the money back out.

Thanks for the tip mate - and what about the modern sovs? I have been looking at accumulating best value sovs from dealers and they have just sent me 2000 dated sovs

[Silverlocks]

2 minutes ago, 17RSB said:

Thanks for the tip mate - and what about the modern sovs? I have been looking at accumulating best value sovs from dealers and they have just sent me 2000 dated sovs

Modern sovs tend to be a bit love or hate due to the colour (no silver in the alloy), but there are still plenty of folks who will buy them, so I don't think they have a problem with liquidity.

Normally, with best value sovs you would expect a mix - it won't always be modern ones.  However, generally they've already had someone go over them looking for more valuable items so you're probably not going to turn up an uncirculated 1841 out of your best value lot.

Edited December 6, 2023 by Silverlocks

[17RSB]

33 minutes ago, Silverlocks said:

Modern sovs tend to be a bit love or hate due to the colour (no silver in the alloy), but there are still plenty of folks who will buy them, so I don't think they have a problem with liquidity.

Normally, with best value sovs you would expect a mix - it won't always be modern ones.  However, generally they've already had someone go over them looking for more valuable items so you're probably not going to turn up an uncirculated 1841 out of your best value lot.

Ah that makes sense. One final question what year did they stop using silver in the alloy?

[Silverlocks]

1 minute ago, 17RSB said:

Ah that makes sense. One final question what year did they stop using silver in the alloy?

About 1980 or thereabouts.  You can see the change in colour of Machin sovs as they use less and less silver.

19th century sovs used silver in the alloy as the refining tech of the day wasn't terribly good and gold normally comes out of the ground with some impurities including silver.  Typically, Victorian sovs were about 0.3% to 0.4% silver; you don't need a lot of silver in the alloy to lift the colour quite substantially.  Chards web site has an article on this.  They carried on with some silver in the alloy until they stopped minting sovs in 1932.

Interestingly, you can see some European coinage from about the turn of the century with a noticeable coppery tinge (I've got some roosters and vrenellis like this), so mints have been producing gold cons with very low silver content for a while.

When they started making Gillick sovs in the 1950s, they kept with an alloy containing some silver (although, from the colour, I think a little less than the pre-war sovs).  Then during the 1970s, you can see the colour of Machin sovs changing as they use less and less silver in the alloy.  By the latter part of the 1980s they were making coins with little or no silver at all.  

The laws only mandate the gold content and don't require silver in the alloy, so currently the Mint uses a gold/copper alloy with the rose gold colour.  If you do the maths, the amount of silver needed would come to about 1.5p per coin.  As this would significantly improve the desirability (and therefore selling price) of the coins, it's not clear why they don't make coins with an alloy containing silver, and the Mint have never provided a satisfactory explanation.

[JohnA1]

1 hour ago, Silverlocks said:

.. it's not clear why they don't make coins with an alloy containing silver, and the Mint have never provided a satisfactory explanation.

...maybe because they know silver is far more valuable than they (currently) pretend it is?🧐

Food for thought...

[Silverlocks]

34 minutes ago, JohnA1 said:

...maybe because they know silver is far more valuable than they (currently) pretend it is?🧐

Food for thought...

The amount needed is about 20 milligrams per coin.  They can buy it for about 1.5p/coin now.  Even if silver went up by a factor of 10 it would be 15p/coin and the mint could easily recover that by bumping the price of the coin by less than £1.

If you want to go tinfoil hat, a far more likely explanation is that they want to push folks off sovereigns and onto higher margin product lines like Brits or their .917 and fine gold collectibles.

Edited December 6, 2023 by Silverlocks

[CANV]

I prefer the ‘older colour’ but the new ones are perfectly acceptable and a lot shinier , I if that’s  your bag.    
if you manage to acquire a ‘pile’ of sovs over time they all look great together 

[Silverlocks]

Just now, CANV said:

I prefer the ‘older colour’ but the new ones are perfectly acceptable and a lot shinier , I if that’s  your bag.    
if you manage to acquire a ‘pile’ of sovs over time they all look great together 

What can I say?

[James32]

4 hours ago, 17RSB said:

Hi everyone

I am also new and had the same question but I took the plunge and went for sovs over bars purely because of how liquid they are especially on here. 

Smart choice until you build a foundation. Do treat yourself to a must have every once in a while to keep things interesting. 

[Bigmarc]

2 hours ago, Silverlocks said:

it's not clear why they don't make coins with an alloy containing silver, and the Mint have never provided a satisfactory explanation

Probably find that they changed their production method to increase volume and a change of alloy was needed to produce satisfactory results (less scratching, oxyidization, ect). 

They wouldn't want to give a answer saying they changed what was tradition to get a extra 5 sovs an hour. 

Complete stab in the dark 

[Silverlocks]

20 minutes ago, Bigmarc said:

Probably find that they changed their production method to increase volume and a change of alloy was needed to produce satisfactory results (less scratching, oxyidization, ect). 

They wouldn't want to give a answer saying they changed what was tradition to get a extra 5 sovs an hour. 

Complete stab in the dark 

I suspect the flat surface is to do with the die making.  I have read somewhere that the dies are chrome plated now, although they still produce some with satin finishes, which suggests they can make dies with the texture used on the historical sovs. 

I'm not convinced of the argument about production volumes, as the 2000-2015 figures (see below) suggest that the mintages are something like 1% of what they were (about 30m) at the peak of production just before WWI.  In terms of die cutting costs, the die numbering of the 19th century suggests that a small handful of dies made with 1860s technology would be enough for the entire production run of today (let alone what's possible with current tech), so I'm unconvinced of there being significant benefit to chrome plating the dies either.

Unless they've got some hard constraints on the sale price, the cost of manufacture is dominated by the cost of the gold, and I don't see a lot of benefit to penny pinching elsewhere.

 

	Sovereign	Proof Sovereign	Half Sovereign
2000	129,069	12,159	146,822	7,458
2001	49,462	15,000	94,763	4,596
2002 *	75,264	20,500	61,347	10,000
2003	43,230	16,220	47,818	4,868
2004	30,688	12,685	34,924	4,446
2005 +	45,542	15,458	30,299	5,011
2006	33,012	11,485	Mintage Unknown	4,173
2007	27,628	11,418	75,000	2,442
2008	58,894	10,872	75,000	2,465
2009 x	60,292	9,770	50,000	5,412
2010	243,158	8,828	250,000	5,370
2011	253,773	8,209	50,000	5,287
2012 #	432,925	8,158	250,000	2,303
2013	261,581	10,158	1,051 + 124 Brilliant Uncirculated (BU)	1,863
2014	261,216	7,500	9,900 BU	4,075
2015	113,177	9,800	5,000 BU	4,600

 

Edited December 6, 2023 by Silverlocks