Gold Sovereigns

fothepot

Hello everyone,

First time poster, so please be nice

I've done a search of these forums but cannot find the answer to my questions so I'm hopinh some informed opinions here will help.

For a while now I've been wodnering about buying Gold Sovereigns as an alternative to saving the cash in an account, one of my thoughts behind this is the interest rate versus the possible rate of return on the Sovereigns and a way of holding the money without the bulk of cash. However, I'm confused about the proces involved.

For example, the advice is to buy Sovereigns direct from the Royal Mint, however they retail at £379 each. There are specialist dealers that advertise the same 2012 coins for over £100 less, indeed some older Sovereigns can be bought for even less from the same dealers, even though they contain the same amount of gold (although as a coin, may be more worn then a 2012 one)

So my questions are, should the coins be bought from a specialist dealer (if so, can anyone recommend one they've dealt with) or the Royal Mint? And does anyone here do the same/have experience of buying Sovereigns that they'd like to share please?

Thank You!

Ian

DiggerUK

Sovereigns is, as sovereigns does, they all have the same gold content, which is what you are paying for.

RM are boutique prices....Try Coininvestdirect, Bairds, Atkinsons Jewelers, Elm Investments, Hatton Garden Metals, have used them all ok. Expect to pay £255+ at todays prices for a full sov.
..._

Devon_Sailor

Or bid for them at auction. Yes, you pay auction fees on top of the hammer price (10-20% depending on the house), but bear in mind that's where dealers get a lot of their stock from, so you will be avoiding their mark up (profit margin!).

Royal Mail are ridiculous prices. Don't touch them with a barge pole - or even someone elses barge pole!!

If you are looking at them from a purely gold related value, as opposed to a numismatic one, auction is the way forward.

D_S

MoneySaverLog

Watch what you buy at auction, some of these sovereigns, George V in particular are fakes. Probably best to go to a reputable place.

ColdIron

It may sound unsafe but ebay is a fine place to buy bullion coins, just apply the usual due diligence and tracked post. I have bought many many gold coins this way with a <1% failure rate and that was sorted out eventually

The USA has a bigger market, many reliable sellers with feedback in the tens of thousands. Postage costs are the killer but it's not hard to match this with the 5% or so premium you will be charged here

Not for everyone but worth bearing in mind

sabretoothtigger

http://www.youtube.com/watch?v=sr0gNJ090JA&feature=related

George V in particular are fakes

At 22ct you can just measure it then weigh it. Its pretty hard to fake gold, if it matches up and looks the job its very likely real.

Sovereign is 255 worth, thats a fair bit to buy from auction but Ive paid that much for something before, I dont think this product is that more hazardous then other second hand items.

Generally I think the miners are cheaper to buy gold through or a managed fund plus you get 'interest'. Actual physical coin is not that needed in age of electronic global currency use. I can just hold aussie dollars if I want then easily dispose of it later for far less spread cost and general hassle then a coin

gkerr4

this is an interesting thread to me - for a number of reasons, i hadn't actually considered holding physical gold as an investment before - do people still do this?

I can see the logic in gold outperforming the current interest rates on savings - and i note with interest that UK sovereigns are oddly exempt from capital gains so technically tax free. Its easy to store safely and prettier to look at than a paper or screen-based statement.

so whats good? - coins? bars? - there are slight differences in the prices when based on pure weight of gold - the coins in particular can be different values, I'm assuming there is a rarity factor is there?

how many here actually hold gold?

shaun_from_Africa

so whats good? - coins? bars?

If you are buying for investment purposes, the answer I would give is that what's good is what is the cheapest. (taking everything such as purchase price, delivery costs etc into account).

Another thing to consider is when the time comes, how you intend selling your gold.
A smallish coin or bar such as a 1oz one may be easier to sell privately than something weighing 5oz.

There is another cost to consider when purchasing gold.
The bigger the lump of gold you buy, the lower the sellers markup normally is.(often called the sellers premium)
For something like a 1oz Krugerrand, this premium can be about 4%, but for a 1/10oz krugerrand, the premium will be about 10%. (Examples from coininvestdirect)

and i note with interest that UK sovereigns are oddly exempt from capital gains so technically tax free

It's not only Sov's that are CGT free. The same is also true of Britannia coins.
The reason that these coins are CGT exempt is because although they aren't used as such, they are both still classed as UK legal tender and saving them is in reality no different to saving a load of £50 notes. (CGT is only liable on certain assets and not on cash savings).

how many here actually hold gold?

A fair few people do.
I've got a reasonable holding which is a mixture of Krugerrands, Sovereigns, and some Australian bullion coins.
Capital gains tax isn't an issue for me as I'm no longer a UK resident, and because of this I purchased the Krugerrands and Aussie coins as they were the best value at the time.

gadgetmind

gkerr4 wrote: »

I can see the logic in gold outperforming the current interest rates on savings

You're comparing apples and oranges.

Savings have protected capital with no chance of capital gain and low interest.

Gold has no protection of capital, some chance of capital gain, and zero interest.

Gold sometimes outperforms cash but you might have to be *very* patient and you need to be sure that you'll *never* be a forced seller during a prolonged slump.

gkerr4

gadgetmind wrote: »

You're comparing apples and oranges.

Savings have protected capital with no chance of capital gain and low interest.

Gold has no protection of capital, some chance of capital gain, and zero interest.

Gold sometimes outperforms cash but you might have to be *very* patient and you need to be sure that you'll *never* be a forced seller during a prolonged slump.

true - very true - and fully understood - I trade / invest equities so understand the risks. My savings are currently around 20% in equities, 22% in cash ISA's, 3% in premium bonds and the rest in boring savings accounts. Might be worth a little speculation in gold.

certainly food for thought - thanks folks.

melbury

I remember my dad had 20 full krugerrands in the late 1970's and sold them when the price of gold went up a bit - think for around £5,000 for the lot:eek:

I am tempted to buy some half sovereigns, but is it too late now? Has it peaked and the only way for gold is downwards?