Advice for newbies' investment in bullion

magn8p

After some rigorous reading through various threads in this website, I have understood the basics of investing in Gold and Silver and various options that are available out there.

I would like to summarise my learning and verify it with the experts here:

Atkinsons (https://atkinsonsbullion.com) is the best place to buy Gold and Silver - I found that coininvest.com has better rates but they have a surcharge for card payments and shipping charge, effectively making Atkinsons relatively cheaper when you choose the safer options.

Is there a merchant different from Atkinsons and Coininvest that you think offers a better deal?

Buying Gold/Silver bars is cheaper and better compared to equivalent sovereigns/coins as long as the small time investor isn't bothered about CGT (which starts only after £11.000 annual gains). Am I correct in assuming this?

Go for the cheapest gold/silver bar options - Perth Mint gold bars and RMC silver bars are relatively cheaper - compared to other mints such as Royal Mint, PMP, Unicore etc. Since the quality of the metal is identical, does the brand value really matter?

Thanks in advance.

ColdIron

magn8p wrote: »

I have understood the basics of investing in Gold and Silver

Gold isn't an investment, it's speculation pure and simple. I like gold and there are good reasons to have some but I don't kid myself that I am investing in it

Atkinsons are fine, you could have a look at these
http://www.goldline.co.uk
http://www.hattongardenmetals.com/buy/
https://www.bullionbypost.co.uk/

Personally I am not interested in gold bars, they are not as recognisable or as liquid as coins and I'd forget silver entirely

Sovereigns and Britannias are CGT free but you have an annual allowance of £11,700 so don't ignore foreign bullion coins. Krugerrands can be had for low premiums, maples, nuggets and eagles for not much more. Any of the lunar series and particularly pandas are very attractive and make great gifts. They are liable for CGT but you have a large allowance and can control when you sell

The price of gold can and does do unexpected things, this is part of its attraction as a diversifier held as a small part of a wider portfolios of actual investments

Good luck

magn8p

Thanks for your quick response. As a newbie, I may have gotten confused with the terms, so thanks for correcting me.

I see Gold as an inflation and bad times hedge. The current prices seem to low especially with the Brexit and US - China trade wars looming in. And I intend to keep it till the next economic downturn to see the bullion prices soar and perhaps liquidate some of it and invest it elsewhere - Am I right thinking in these lines?

I am surprised that you don't consider betting on Silver at all - over the years Silver seems to have tracked Gold and at times even outperformed it when Gold and Silver saw their respective peaks in 2011. So why do you think it's a bad bet considering the current value at almost a 10 year low?

Thanks for your advice about the sovereigns/coins. It's interesting that you mentioned about the coins being attractive gifts - does this mean you see an investor buy it only to resell it in a second market - i.e. as a gift - I have seen several eBay listings but I wasn't sure how and why I would trust them. Parking the gift market aside, do you think the buy back value of coins is identical to an equivalent bar? At todays rate gold rate of £905, 1oz Perth Mint gold bar costs about £935 compared to 1oz Canadian Maple costs about £951 and 1oz Australian Lunar Dog which costs about £987 and 1oz Chinese panda costs about £993.

So, do you think the premium is justified when I have to sell it back to the bullion market rather than gift market?

Sorry if I sounded ignorant above but as mentioned earlier, I am a newbie! :-)

Thanks again in advance.

ColdIron wrote: »

Gold isn't an investment, it's speculation pure and simple. I like gold and there are good reasons to have some but I don't kid myself that I am investing in it

Atkinsons are fine, you could have a look at these
http://www.goldline.co.uk
http://www.hattongardenmetals.com/buy/
https://www.bullionbypost.co.uk/

Personally I am not interested in gold bars, they are not as recognisable or as liquid as coins and I'd forget silver entirely

Sovereigns and Britannias are CGT free but you have an annual allowance of £11,700 so don't ignore foreign bullion coins. Krugerrand can be had for low premiums, maples, nuggets and eagles for not much more. Any of the lunar series and particularly pandas are very attractive and make great gifts. They are liable for CGT but you have a large allowance and can control when you sell

The price of gold can and does do unexpected things, this is part of its attraction as a diversifier held as a small part of a wider portfolios of actual investments

Good luck

ColdIron

Gold is a decent store of wealth (not value) and a hedge against wild inflation and currency collapse, think Venezuela, but Sterling, the Dollar or the Euro are not Bolivars. Gold might protect you against Brexit etc but so would a balanced portfolio of overseas equities etc and they will pay you dividends which gold won't. Gold's principal value to me is as a different asset class that is not very correlated to equities, bonds or cash. Eggs and baskets and all that good stuff

Silver just too bulky for it's value, you would need over 80 1oz Britannias for every Krugerrand or 20 of them for a Sov on a chain around your neck. Would you prefer a silver Britannia or a big Mac meal for 3? I did buy quite a few Britannias and Maples 20 years ago that I regret. They take up so much space that I don't even bother to secrete them anymore. I have a 10 oz bar that I use as a paperweight. If you try to sew them into your lapels or drop them in your turn ups to escape zee Germans you'll clank quite a lot

I bought during the Brown Bottom nearly 20 years ago at £195/$260 so it has done well but it was blind luck and could have turned out very differently if I had purchased in 2011. As a result I am well out of the market comparing the differences of a few quid between different coins and bars. My advice would be to buy popular and well recognised coins that you can easily shift if you need to and avoid the esoteric stuff (including bars). One of gold's plus points is it's liquidity, I'd play to that strength

When I talked about gifts I meant to grand children etc. I'm struggling with the concept of a gift market

This may give you 20 minutes of fun comparing PMs against different currencies over different timespans
https://www.bullionbypost.co.uk/gold-price/10-year-gold-price-chart/

DiggerUK

Atkinson's have been best buyers choice for a while. Another outfit I have used regularly is http://www.elminvestments.co.uk/gold-coins.html. You need to order 10 plus to get free postage, but not a best buy atm.

2011 was peak sterling price in silver and gold, £1180 for gold, and £26.50 for silver. I have been charting the effect of buying a regular amount of both at the same time each month.
Your average price paid for silver would be £14.00, the last value I can do is for August at £11.65. You would have been losing since the peak, like ColdIron I wouldn't touch silver.
Doing similar with gold you would have an average price paid of £915.60, this month you would have a value of £931.60. Nominally up, but down with inflation.
My strategy would be to average in, at the moment I view the price as a good entry point.

As to buying, then ColdIron is correct, don't pay too much attention to CGT on bars, allowances are good. Offset potential CGT with UK legal tender coins. Bar sizes I choose are 50, 100, and 250gms, any bigger is unnecessary,any smaller go with coins..._

N.B. best plan for compost bins....year 1, four wooden pallets, year 2, add three more to make another bin. Turn year 1 in to bin 2, and use when good. You should be at the turning point when you have cleared this year mess up.
Don't put gold in a compost bin

System

You can also invest in gold through an ETF, which can be held in an ISA or a SIPP, such as:
https://etfs.wisdomtree.eu/retail/uk/en-gb/products/product/etfs-physical-gold-phgp-lse

Flobberchops

I don't have much of an opinion on gold. I bought some earlier this year in Hatton Garden Metals and found them professional and competitive.


Silver: CGT may not be very much of an issue but don't forget the prohibitive VAT added to UK bullion. As somebody mentioned previously, recognisable coins have the benefit of being a lot easier to sell, which will surely become a consideration at some point unless you become a collector, and that's why I like Silver Britannias. There are a few good reputable European silver sellers which allow you to buy UK, CGT-free silver without VAT - for example, I recently used Irish outfit Goldcore to buy 75 Britannias for £13.34 each. The equivalent order with Atkinson would cost £16.87 per coin. A big difference!



Yes, silver is bulky compared to gold but that also makes it more difficult to steal! It's a speculation rather than an investment but it's really quite cheap at the moment.

magn8p

Thanks for all that wisdom you shared here.

With regards to your concerns about the silver bars/coins shared - if you bought them long time ago (barring the crazy prices around 2011) I bet you got them for less than what the current spot price of silver. So why wouldn't you be interested in liquidating your silver rather than using it as a paper weight?

With regards to the coins, thanks for the recommendations. What's your take on the current 1oz Queen's Beast series? Some of the coins in the series - especially the Lion - is on sale for 175% of the gold it has - is this purely down to the demand from the collectors and the limited stock availability or are there any other market forces that drive coin prices?

Also, other coins in the series such as the Bull, Unicorn, Eagle etc are on sale for 110% (of gold spot price) which are a bargain compared to others - would the value of these increase as the stock runs out? Or does it have other factors to it?

Thanks a ton!

ColdIron wrote: »

Gold is a decent store of wealth (not value) and a hedge against wild inflation and currency collapse, think Venezuela, but Sterling, the Dollar or the Euro are not Bolivars. Gold might protect you against Brexit etc but so would a balanced portfolio of overseas equities etc and they will pay you dividends which gold won't. Gold's principal value to me is as a different asset class that is not very correlated to equities, bonds or cash. Eggs and baskets and all that good stuff

Silver just too bulky for it's value, you would need over 80 1oz Britannias for every Krugerrand or 20 of them for a Sov on a chain around your neck. Would you prefer a silver Britannia or a big Mac meal for 3? I did buy quite a few Britannias and Maples 20 years ago that I regret. They take up so much space that I don't even bother to secrete them anymore. I have a 10 oz bar that I use as a paperweight. If you try to sew them into your lapels or drop them in your turn ups to escape zee Germans you'll clank quite a lot

I bought during the Brown Bottom nearly 20 years ago at £195/$260 so it has done well but it was blind luck and could have turned out very differently if I had purchased in 2011. As a result I am well out of the market comparing the differences of a few quid between different coins and bars. My advice would be to buy popular and well recognised coins that you can easily shift if you need to and avoid the esoteric stuff (including bars). One of gold's plus points is it's liquidity, I'd play to that strength

When I talked about gifts I meant to grand children etc. I'm struggling with the concept of a gift market

This may give you 20 minutes of fun comparing PMs against different currencies over different timespans
https://www.bullionbypost.co.uk/gold-price/10-year-gold-price-chart/

BlackBird75

What about Chards in Blackpool?
They seem well established.

I don't think gold bars always have lower premium compared to secondary market coins, bought in larger quantities.

I consider physical gold bullion as an insurance. If you want to speculate, precious metals mining companies are looking relatively cheap these days. Probably best to go for a diversified fund / ETF.

magn8p

Thanks for your sincere advice.

I have checked after your advice about sticking to gold bars for units that 50 gms and over and for anything less to go with coins. And interestingly, when compared the per gram rate of the cheapest 1 oz and 50 gm bars sold at Atkinsons, I found that the 1oz are cheaper. I always thought the premium comes down as the quantity goes up but looks 50 gms have a special factor to them - is this due to the demand for 50 gm bars or is there more to it?

Thanks for giving the reassurance about now being the right time to start putting money in bullion, unlike the rest of the world we are waiting for the obvious £ devaluation in the coming months and other brexit effects to face which definitely raise the value - even if it goes down a bit down depending on international market conditions, I bet Theressa May and her policy makers will help bullion prices soar with and soon Trump will join forces with his trade war after effects :-)

Finally, thanks for the advice on the compost making - my black gold which is offered by mother nature! :-D Having said that, this summer has taken toll on my allotment and could do much, i bet there is sufficient grass there to make a truck load of compost.

DiggerUK wrote: »

Atkinson's have been best buyers choice for a while. Another outfit I have used regularly is http://www.elminvestments.co.uk/gold-coins.html. You need to order 10 plus to get free postage, but not a best buy atm.

2011 was peak sterling price in silver and gold, £1180 for gold, and £26.50 for silver. I have been charting the effect of buying a regular amount of both at the same time each month.
Your average price paid for silver would be £14.00, the last value I can do is for August at £11.65. You would have been losing since the peak, like ColdIron I wouldn't touch silver.
Doing similar with gold you would have an average price paid of £915.60, this month you would have a value of £931.60. Nominally up, but down with inflation.
My strategy would be to average in, at the moment I view the price as a good entry point.

As to buying, then ColdIron is correct, don't pay too much attention to CGT on bars, allowances are good. Offset potential CGT with UK legal tender coins. Bar sizes I choose are 50, 100, and 250gms, any bigger is unnecessary,any smaller go with coins..._

N.B. best plan for compost bins....year 1, four wooden pallets, year 2, add three more to make another bin. Turn year 1 in to bin 2, and use when good. You should be at the turning point when you have cleared this year mess up.
Don't put gold in a compost bin

ColdIron

I bought at about £3 oz I think, they were definitely cheaper than a Big Mac at the time. The bar makes a jolly fine paperweight and I've become attached to some of the others, especially the hologram maples I bought on an impulse. If I'm honest I may never sell them and someone will inherit them

I like the beasts but will probably never buy any, I'm 'full' on PMs. Are you sure about that 175% Lion? Could it be a proof coin?

On that point I think it's important to separate bullion and numismatics. I bought principally on the bullion value of the coins with view to getting market value of the metals upon sale (whenever that may be). If you pay much of a premium over spot/fix you may never get it back so on that basis I'd avoid the apparent large premiums on some of the Beasts. I have paid over the odds for Pandas and Lunar coins but I did that with my eyes open as if you take the economics out of the argument (I know, I know) some of the coins are beautiful to look at and it is part of the pleasure of ownership, there is only so much fun you can have with a pile of krugs and sovs. I have a few 'sets' of the Lunar coins which may increase their value as a collection, or maybe not. Philharmonics are particularly impressive as they are very thin and therefore wide, they look like a proper pirates doubloon

So figure out why you are buying gold, trading is a mugs game due to the premiums and discounts, so be prepared to hold for a long time. For me they are a diversifier as I say or a form of insurance, DiggerUK above uses them to supplement his pension. But do bear in mind they are not investments in the traditional sense so remember to sort that out before you get too deep in

Good luck and enjoy them