Investing in Britannia 1oz gold coins.

Bigwheels1111

My friend and I are thinking of investing some money in gold, these coins look like a good start.
No Tax, Vat or CGT.
The best price I’ve seen is 3.3% or so over gold price.
Buy back at 0.03 under gold price.
Works out about £500 over the gold value to buy 10 coins.
Looking at keeping them for 5-10 years.


Does anyone have any advice or guidance on this matter.
Thanks

dunstonh

Looking at keeping them for 5-10 years.

Gold tends to be higher in periods of fear.  And drops in periods when fear goes away.      You don't get any income from the coins.  So, you are purely speculating on the gold price.

It has hit highs recently as we are in a period of fear. 5-10 years would be typical for that fear to have gone away and the price to fall.

You also have to consider currency.   Dollar is high against every currency.  The fall in sterling against the dollar has helped push up the value for UK gold holders.  It will do the reverse when the currency makes back the other way. Which it will likely do at some point.

Just before Coronavirus, gold was worth about the same as it was in 2009 in Sterling but less in dollars.  Buying before a fear event is even thought of is the right time.  Buying it after or during a fear event is buying it at a high.

The markup on these usually means you a straight into negative and need the fear event to get a heck of a lot worse than it currently is.   That is what you need.  Markets don't appear to currently think that is going to happen.  They could be wrong.  You will need them to be wrong.

Bigwheels1111

Thanks for the advice, will take it onboard.

Winebottle

I would only buy these as insurance against a complete collapse of the financial/legal as system.

If you have confidence things will carry on OK, there are cheaper ways to bet on the gold price going up.

Type_45

dunstonh said:

Markets don't appear to currently think that is going to happen.  

The 2yr/10yr yield curve has inverted.  When it's done so in the past it has been a near-perfect indicator of recessions.  It is very bearish and pessimistic.

The stock market may not show signs of what is to come.  But the bond market, which is far more important and massively bigger than the stock market, has spoken.

Albermarle

Winebottle said:

I would only buy these as insurance against a complete collapse of the financial/legal as system.

If you have confidence things will carry on OK, there are cheaper ways to bet on the gold price going up.

Although if such a complete collapse where to happen, then it is not clear what use gold coins might be. Probably a gun and a stash of baked beans would be more useful.

Zola.

https://www.youtube.com/watch?v=KlhT07G8zGs&t=2s

Type_45

Albermarle said:

Winebottle said:

I would only buy these as insurance against a complete collapse of the financial/legal as system.

If you have confidence things will carry on OK, there are cheaper ways to bet on the gold price going up.

Although if such a complete collapse where to happen, then it is not clear what use gold coins might be. Probably a gun and a stash of baked beans would be more useful.

Gold is a store of wealth. You convert it back to the new currency when the storm has passed. Or you exchange your gold for something else.

Gold / baked beans isn't a binary choice. It is technically possible to own both gold coins AND tins of baked beans. 

InvesterJones

Type_45 said:

Albermarle said:

Winebottle said:

I would only buy these as insurance against a complete collapse of the financial/legal as system.

If you have confidence things will carry on OK, there are cheaper ways to bet on the gold price going up.

Although if such a complete collapse where to happen, then it is not clear what use gold coins might be. Probably a gun and a stash of baked beans would be more useful.

Gold is a store of wealth. You convert it back to the new currency when the storm has passed. Or you exchange your gold for something else.

Gold / baked beans isn't a binary choice. It is technically possible to own both gold coins AND tins of baked beans. 

Wealth is only what it's worth to someone else - as mentioned, if we're ever in such a disaster scenario then gold may not have much use either.

Of course, I'm now wondering why we haven't combined the two and started making gold tins of beans - it's a very non-reactive metal of course..

Albermarle

Type_45 said:

Albermarle said:

Winebottle said:

I would only buy these as insurance against a complete collapse of the financial/legal as system.

If you have confidence things will carry on OK, there are cheaper ways to bet on the gold price going up.

Although if such a complete collapse where to happen, then it is not clear what use gold coins might be. Probably a gun and a stash of baked beans would be more useful.

Gold is a store of wealth. You convert it back to the new currency when the storm has passed. Or you exchange your gold for something else.

Gold / baked beans isn't a binary choice. It is technically possible to own both gold coins AND tins of baked beans. 

I was thinking more along the lines of a situation where the storm does not pass.

Eyeful

1. Gold does not pay you a dividend.
2. When inflation is high and there is fear in the markets, it is the wrong time to buy
    (gold price will be high already)
3. Where are you going to store these gold coins? 
4. Have you factored in storage costs and insurance?

If social media or advertising had any part in getting you interested in buying, then just forget it.