Silver / Gold products on discount sale?

EasyToAssemble01

I've recently become interested in buying a small amount of gold / silver (not a lot, but thought it can't hurt to own a little). I noticed that some of the websites (eg. bullionbypost) have some products - normally commemorative coins / mints etc - on sale (eg 15% off), as well as selling "second hand" gold / silver (?)

I wondered exactly how the pricing works. I thought the price I pay would be largely dictated by spot price, regardless of where it is minted, and whether it is "pre owned".

Are these items sold with an inflated price tag to begin with (relative to - say - a plain bar of gold / silver)? Is it even possible to get a "good deal" on metals, outside of market fluctuations?

gravel_2

Gold and silver have a price set by the market. It fluctuates constantly during trading hours.

If all you want is gold content (and a reasonably easy thing to sell or give back to a dealer should you need cash) then I suggest you stick with bullion products only, likely restricting yourself further to Royal Mint produced bullion products. I think the importance of CGT when it comes to gold and silver is overblown for the average person but being CGT free does seem to add value when you want to sell. You can also get exposure to metals through investment products.

There are certain releases that carry more value due to scarcity, desirability, design etc. There are different qualities available, you can have a circulated coin, loose bullion, a presentation bullion, proof etc. Understanding the value here is not something I've bothered with but with a bit of effort you would quickly understand what sells for what price and why (and more importantly, what is cheap and what is expensive). You don't have that problem if you buy bullion.

Until you reach high value collectable items most products you are looking at will be priced through some adjustment of spot value.

E.g. a sovereign is 7.32g of gold. At a spot price of £75.50 per gram that coin's "value" is £552.66. Dealers will put some percentage premium on top of this when selling. Dealer 1 may do 3% over, or £569.24, Dealer 2 may do 5%, or £580.29. Same goes for more desirable products, only the % will be higher.

Bullion by Post is well known as a more expensive dealer and likely not worth considering if all you want is value for money on gold. When they say "15% off" they are typically still more expensive than other dealers. Chards is decent (although they do charge delivery, so you need to factor this in to compare with dealers that don't) and Atkinson's has a good reputation.

Silver works the same way but typically prices will be far in excess of intrinsic value. This is largely due to most silver being subject to VAT in the UK and to a lesser extent the cost of production vs the lower intrinsic value by weight of the metal.

DYOR but from what I've seen on gold (mainly sovereigns, half sovereigns and fractional Britannia coins) a premium of 3% or less is pretty good going, ~4% is probably typical if you are unfussy about what you are buying and 5%+ you are probably buying something either you want, or you know is desirable to others.

DRS1

Silver works the same way but typically prices will be far in excess of intrinsic value. This is largely due to most silver being subject to VAT in the UK and to a lesser extent the cost of production vs the lower intrinsic value by weight of the metal.

If a dealer says he is selling silver as "second hand" or pre-owned that generally means you will not be paying VAT on it.

gravel_2

DRS1 said:

Silver works the same way but typically prices will be far in excess of intrinsic value. This is largely due to most silver being subject to VAT in the UK and to a lesser extent the cost of production vs the lower intrinsic value by weight of the metal.

If a dealer says he is selling silver as "second hand" or pre-owned that generally means you will not be paying VAT on it.

Well aware of the special scheme for second hand silver. It didn't feel useful to mention it as, because of the price of VATed silver, the price of special scheme silver is still subject to heavy (perhaps even heavier) premiums even if technically you're not paying VAT.

DRS1

gravel_2 said:

DRS1 said:

Silver works the same way but typically prices will be far in excess of intrinsic value. This is largely due to most silver being subject to VAT in the UK and to a lesser extent the cost of production vs the lower intrinsic value by weight of the metal.

If a dealer says he is selling silver as "second hand" or pre-owned that generally means you will not be paying VAT on it.

Well aware of the special scheme for second hand silver. It didn't feel useful to mention it as, because of the price of VATed silver, the price of special scheme silver is still subject to heavy (perhaps even heavier) premiums even if technically you're not paying VAT.

Yes I am sure you are but the OP was questioning the second hand and pre-owned references as regards pricing so I thought he might like to know.