Krugerrand as gold investment?

phildew

Can anyone with experience of investing in gold Krugerrand coins tell me how important is the condition of the coin itself to the value you can expect when you cash in your investment? Is it best to only collect mint unused coins (which makes it harder to find them), or is it OK to buy normal good condition coins?
Also, it looks like reputable dealers pay a few percent below spot for Krugerrands. Can you always expect to get a few percent below spot when it is time to sell, or is this only because the gold market is strong at the moment? When gold prices are falling, what percent can you expect below spot?
Thank you for any advice.

Jonbvn

Instead of Krugerrands, have you considered Sovereigns and Britannias to avoid CGT?

phildew

Jonbvn wrote: »

Instead of Krugerrands, have you considered Sovereigns and Britannias to avoid CGT?

Yes I did consider but Krugerrands are better for me as UK CGT is not an issue as I will be holding for a few years and retiring overseas.

Jonbvn

phildew wrote: »

Yes I did consider but Krugerrands are better for me as UK CGT is not an issue as I will be holding for a few years and retiring overseas.

If you are carrying large quantities of gold when you leave the country, then you may have problems.

jon3001

Jonbvn wrote: »

If you are carrying large quantities of gold when you leave the country, then you may have problems.

Yeah - I hear the baggage allowance on Ryanair isn't that great now.

Jonbvn

jon3001 wrote: »

Yeah - I hear the baggage allowance on Ryanair isn't that great now.

You would put gold in your checked luggage?:eek:

If you are carrying a large amount of gold, the boys with those long rubber gloves will probably want a word with you.....:p

phildew

If anyone can offer any feedback on the original post I'd appreciate that. Thanks!

DiggerUK

phildew,
Krugerrands are not collectible coins. They are bullion coins bought for their gold content, most gold coins are. There are a few rare coins, but in the main you are just after the gold.

The gold market is very open, you know exactly what the dealers are making by looking at the percentage they sell over spot, and buy back under spot.

The gold market obeys supply and demand laws. If there is a high demand for gold then the % premium over spot that you pay rises, and the price they pay you under spot, goes to your advantage. Recently it has been quite easy to sell at spot or just under.

Buying premiums are up at present, about 6+% over spot, i.e., what you pay.
Selling premiums are about 1%+ under spot at present, i.e., what they pay you.

Check these two sites to get a better understanding, they are 24/7 live prices. Put them in favourites.
http://www.coininvestdirect.com/en/
http://www.invest.gold.org/sites/en/where_to_invest/directory/?country=UNITED+KINGDOM&cb%5B%5D=coins&submit=Search&agree=1&task=search

phildew

DiggerUK wrote: »

phildew,
Krugerrands are not collectible coins. They are bullion coins bought for their gold content, most gold coins are. There are a few rare coins, but in the main you are just after the gold.

The gold market is very open, you know exactly what the dealers are making by looking at the percentage they sell over spot, and buy back under spot.

The gold market obeys supply and demand laws. If there is a high demand for gold then the % premium over spot that you pay rises, and the price they pay you under spot, goes to your advantage. Recently it has been quite easy to sell at spot or just under.

Buying premiums are up at present, about 6+% over spot, i.e., what you pay.
Selling premiums are about 1%+ under spot at present, i.e., what they pay you.

Check these two sites to get a better understanding, they are 24/7 live prices. Put them in favourites.

DiggerUK, thank you for this. If I interpret correctly, you are saying that as the value is in the gold content, then the condition of the coin (within reason) has no influence on the value. So when you buy a few Krugerrands from a dealer, you may get some that are mint condition and some that are normal condition at the same unit price. And when it comes to sell, you can expect the same offer price for mint as for normal condition?

DiggerUK

Phildew,
Yes, it's the gold content you are interested in.
Other issue for you is what country you will be retiring to, check out what their rules are regards taxes etc..
Some countries penalise you if they are not 24k gold. Krugs are 22k.
Some coins are 24k, most all bars are 24k. + lower premiums on bars usually.
Usually comes up as parts of gold per 1000nd, you can see that on the CID site.

If you go on the gold forum on this site you can ask the posters, they have an audience worldwide. Excellent info as well. another for your favourites.
https://online.kitco.com/bullion/

phildew

DiggerUK wrote: »

Phildew,
Some countries penalise you if they are not 24k gold. Krugs are 22k.

DiggerUK, thanks again. I'll check out the site.
Can you clarify what penalty you are referring to, for holding gold that is not 22k? Do you mean a tax penalty, or something else. I thought Krugs were the best bet because they would be more widely traded internationally than our domestic Sovereigns, and so more practical if I end up selling in Europe. I thought Krugs would be easier to trade?