Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Penn_1969
    • By Penn_1969 12th Oct 16, 12:41 PM
    • 7Posts
    • 7Thanks
    Penn_1969
    Investing in gold
    • #1
    • 12th Oct 16, 12:41 PM
    Investing in gold 12th Oct 16 at 12:41 PM
    When you buy gold from these online companies, are you paying for the complete weight of that bar or coin, or the pure gold content?

    In case that is confusing, I have some gold quadruple sovereigns which each weigh 39.94 g. However, the pure gold content is something like 36.8 g. I'm just a little confused to whether or not you would not pay for the extra none gold content in the coin and just pay for the real pure gold.
Page 1
    • Malthusian
    • By Malthusian 12th Oct 16, 12:51 PM
    • 1,196 Posts
    • 1,583 Thanks
    Malthusian
    • #2
    • 12th Oct 16, 12:51 PM
    • #2
    • 12th Oct 16, 12:51 PM
    Why would they give you 3.14g of copper / silver / other valuable metal for free?
    • ColdIron
    • By ColdIron 12th Oct 16, 12:59 PM
    • 2,582 Posts
    • 2,846 Thanks
    ColdIron
    • #3
    • 12th Oct 16, 12:59 PM
    • #3
    • 12th Oct 16, 12:59 PM
    For practical purposes you are just paying for the gold content. Sovs are 22k or 22/24 = 91.6% gold so your figures are consistent with that

    If you bought a 1oz krugerrand it would contain 1 troy ounce of gold or 31.104 grams but weigh 33.93 grams because it is also a 22k coin

    I'm just a little confused to whether or not you would not pay for the extra none gold content in the coin
    Well obviously you will be paying something for the copper, tin etc that it contains but not at £1,000 per ounce, pennies or a quid or two

    Edit:
    Let me put it another way, if you strip out factors such as desirability, availability etc a 1 troy oz 22K krugerrand with 31.104 grams of gold in it that weighed 33.93 grams would cost the same as a 1 troy oz 24K Canadian maple with 31.104 grams of gold in it that weighed 31.104 grams
    Last edited by ColdIron; 12-10-2016 at 1:06 PM.
    • Penn_1969
    • By Penn_1969 12th Oct 16, 1:58 PM
    • 7 Posts
    • 7 Thanks
    Penn_1969
    • #4
    • 12th Oct 16, 1:58 PM
    • #4
    • 12th Oct 16, 1:58 PM
    Okay, so these companies are going to actually use the figure of 36.6 grams instead of 39 g when calculating how much to pay me. Basically because they are going to be buying the gold content off me and not the extra metal?
    • bowlhead99
    • By bowlhead99 12th Oct 16, 2:13 PM
    • 5,149 Posts
    • 9,084 Thanks
    bowlhead99
    • #5
    • 12th Oct 16, 2:13 PM
    • #5
    • 12th Oct 16, 2:13 PM
    Okay, so these companies are going to actually use the figure of 36.6 grams instead of 39 g when calculating how much to pay me. Basically because they are going to be buying the gold content off me and not the extra metal?
    Originally posted by Penn_1969
    Yes.

    I mean, you could say they are paying for the whole chunk of metal at a slightly lower price per gram than the price per gram of buying pure gold. But basically they (and whoever buys it from them next) are only really looking to get their hands on the Troy ounce of gold within it, which is the valuable stuff that has global price auctions daily, not the relatively worthless alloy that's mixed in and makes the whole thing weigh more than a Troy ounce.

    In other words don't just weigh a 22 carat coin and think you can cash it in for its weight times the spot gold price as if it was over 0.999% pure, when it's actually only 0.917% pure or whatever.

    In reality, different gold coins have different levels of desirability, for reasons of tax treatment/collectibility / volumes in circulation etc. So a gold dealer will have a different discount or premium to the current spot gold price when dealing in a one ounce Britannia vs a Krugerrand vs quarter Maple or Sovereign or half Panda or whatever
    • Penn_1969
    • By Penn_1969 12th Oct 16, 2:46 PM
    • 7 Posts
    • 7 Thanks
    Penn_1969
    • #6
    • 12th Oct 16, 2:46 PM
    • #6
    • 12th Oct 16, 2:46 PM
    thanks for the information, that was actually very helpful indeed.

    I paid just over £4300 for them. I wished I hadn't now, I've now realised that making money from gold isn't quite as easy as it may sound. I got an offer of just over £4600. I think I may just take that, at least I get my money back and a little bit. I think I'll be waiting for a very long time before I get an offer that far exceeds what I've already had. The gold price will have to rise dramatically before this happens.



    Weight (grams): 39.94
    Pure gold content (grams): 36.61300
    Fineness: 916.7
    • bowlhead99
    • By bowlhead99 12th Oct 16, 3:39 PM
    • 5,149 Posts
    • 9,084 Thanks
    bowlhead99
    • #7
    • 12th Oct 16, 3:39 PM
    • #7
    • 12th Oct 16, 3:39 PM
    Obviously a dealer is going to want to make money to live off, so he can't offer you £x to buy if he is only going to get £x when he sells it again tomorrow. So it will always cost you more than the "pure gold value" to buy, but you'll never find a dealer who'll pay as much as the pure gold value when you want to sell it. If you don't think the gold price is going through the roof anytime soon, and you have other ways to use or invest the money, might as well take the money and run.

    As coins from a particular year and denomination will have a well-known standard weight and gold content, there's no point weighing yours unless you're concerned it might be a fake. Just check a few dealers to see what they will each pay for that coin type and pick the one with the highest price or least hassle or some combination. At mentioned, the type of coin is important not just the weight, so a quadruple sov won't necessarily be 4x a sov or 8x a half.
    • DiggerUK
    • By DiggerUK 12th Oct 16, 4:29 PM
    • 2,582 Posts
    • 2,425 Thanks
    DiggerUK
    • #8
    • 12th Oct 16, 4:29 PM
    No fast buck with gold
    • #8
    • 12th Oct 16, 4:29 PM
    Hoping to make a quick profit with gold is midway between risky and a fools errand. Minimum of five years buy and hold if anyone thinking of saving up.

    As you have purchased, why not put them by for retirement, seems daft selling out at a loss..._

    Edit, they are known as quintuplet sovereigns, i.e., x5 sovereign.
    Last edited by DiggerUK; 12-10-2016 at 4:31 PM.
    I am not now, nor have I ever been, a Financial Adviser.
    Forward, to the 'British Spring'
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,895Posts Today

6,035Users online

Martin's Twitter
  • Just been to @channel4's #bearhunt premier, a beautiful artist reworking BUT be warned, a surprisingly sad end, mini MSE in floods of tears

  • Going to a very exciting premier right now... with Mrs and mini MSE, to the screening of "we're going on a bear hunt"

  • No. Not a huge fan. Never claimed to be.Just a fan. And one who choose to prioritise family time with his little gi? https://t.co/lZ9uUylk2U

  • Follow Martin