I wish I'd never bought these gold coins

Penn_1969

A couple of years ago I bought four quadruple sovereigns, also known as £5 gold coins. I think I paid just over £4400 for them. Even though gold has risen since we voted to leave Europe, I still can't get a decent price for my coins. When my coins were worth about £5500, the place I got them from offered me £4600, which is hardly much more than I paid for them. Obviously gold prices have dropped now so the offer would be much lower.

I contacted the local jewellers who offered to pay "good money" for your gold. They offered me a pathetic £800 for each coin. They will be waiting a long time before I take them up on that offer.

Basically what I'm trying to say is if you are thinking about investing in gold then think carefully, you will be very lucky to make a profit any time soon if you do buy any time soon.

Masomnia

I think you're absolutely right that people don't always take into account the spread when they're buying things like this, especially on investments like physical gold. You pay quite a premium over the spot price, and when you come to sell they'll want their cut too, hence it needs to make a fairly large gain before you see any profit.

It's why gold really should only make up a small proportion of your holdings, and then only in case the S really Hs the F.

Also the importance of thinking over at least a 5 year horizon with investments.

eskbanker

Penn_1969 wrote: »

A couple of years ago I bought four quadruple sovereigns, also known as £5 gold coins. I think I paid just over £4400 for them. Even though gold has risen since we voted to leave Europe, I still can't get a decent price for my coins. When my coins were worth about £5500, the place I got them from offered me £4600, which is hardly much more than I paid for them. Obviously gold prices have dropped now so the offer would be much lower.

By buying something that'll fluctuate in value you're inherently accepting the risk that you either have a potentially long wait to reach your target price or that you may have to sell at a loss if needing to sell at a specific point in time, just like any other form of investment. Did someone convince you that the value of these coins would simply increase linearly from time of purchase?

As per previous post, it doesn't matter if your coins were notionally 'worth £5500' if that wasn't a price that anyone was willing to pay for them - have you ever tried to sell a car to a dealer with an expectation that they'll offer you the same price as they'd sell it at?!

Your closing comment that "you will be very lucky to make a profit any time soon if you do buy any time soon" is self-evidently true, if it was that easy to make a quick buck then everyone would be doing it!

shaun_from_Africa

A couple of points.
The £5 coins is actually a quintuple and not a quadruple Sovereign as it contains 5 times as much gold as a full Sovereign.

The biggest problem with buying these types of coins is that they are generally sold as collectors items and not bullion coins so the mark over the intrinsic price of the gold they contain is usually a fair bit more than "basic" gold coins such as Krugerrands and Sovereigns.
The price of gold 2 years ago (early September 2014) was a fraction under £740 an ounce and you would have been able to buy 20 Sovereigns (the same amount of gold as your four £5 coins) for £3940, or a saving of £660 over the £5 coins and these twenty coins could be sold today for £4460.

I used current and historical prices from www.bullionbypost.co.uk

TBC15

So if you want to buy physical gold as an investment buy coins, bars ?

warehouse

Ebay it, and yes it can be safe if you're careful.

ColdIron

Gold is not an investment in the usual sense, it's a store of wealth and a hedge against inflation as well a a decent diversifier

When buying bullion gold you should ensure you are not paying much over spot/London Fix. Did you buy these via the Royal Mint?

If you contact one of the reputable bullion dealers such as Atkinsons, Baird & Co etc you should be able to do a lot better than £800

Nothing wrong with holding a small amount of physical gold but buy it for the right reasons

EdGasket

Easier and cheaper to buy a gold ETF e.g. SGLN

shaun_from_Africa

This place: (never used them and not a recommendation, simply an example)
https://www.thegoldbullion.co.uk/british-gold-coins/5-pound-gold-coin/
state that they will pay 97% of spot price for a £5 gold coin.
As the current gold price is £989 an ounce and the coins contain 1.177oz of gold, they should pay £1128 per coin.

bigfreddiel

Penn, why did you buy these coins? Cheers fj

markj113

get a quote from hatton garden metals or atkinsons.

https://atkinsonsbullion.com/
(currently offering £1,141.25 per quint sov)

http://www.hattongardenmetals.com/buy/
(currently offering £1102.36 per quint sov)

Prices offered will vary with spot price.

Note for future - If your investing in gold buy bullion coins as close to spot as possible not Royal Mint inflated prices. Hatton Garden sells sovereigns at 2% over spot which makes a much better investment