Buying silver bullion coins

thingswerentthisbadinmyday

Morning all,

I have a smallish portfolio of unit trusts, Investment trusts and shares. Reasonably well spread, although “top heavy” on UK. “Rainy day” cash also held.

I quite like the thought of a dabble in silver bullion coins but despite having read quite a bit on line, I’m still struggling to get clear in my head what would be the best way to go about it.

In simple terms, am I right in saying that if I bought a silver Britannia for say £68 today, then hidden in that price is a whole raft of things including VAT, dealer margin, production costs etc. (Spot is around £45 I think).

To sell that same coin at a profit in the future, am I right in saying that the spot would need to have increased by well over 20%?

Hope this makes sense. Thanks.

jaybeetoo

One big problem with buying coins is where to store them. If you use a third party you have to pay storage costs. If you store them at home you need somewhere secure and you will need insurance as your home insurance is unlikely to cover them. The cheapest way to buy precious metals is with ETFs.

masonic

Have you considered getting your exposure through an ETC instead? It would be more efficient, and could be held within an ISA or SIPP.

LightFlare

coins have a massive markup from spot as they are classed as collectibles

You would be “better” looking at bullion bars if just for investment

Depending on your level of investment,then gold may be an even better choice

Bear in mind (as with a lot of things) the value may go up and down - as with silver recently where it spiked at near £80 an ounce and then fell off the cliff back to £40 ish in a very short time period

Vitor

ETF's are subject to capital gains tax, gains on Britannias are tax free. Note that there's no VAT on gold Britannias, so you're less reliant on a gain in the spot price than with silver.

Silver Britannias are more of interest to collectors than investors.

PixelPound

I think some are more interested in physical rather than paper for security. Depends on if you believe the price of gold will be reevaluated like it has been before. For instance US gold reserves are priced at $44 an ounce and some thought is if they reevaluate it closer to today's prices, suddenly they have a lot more cash to write down debt. If they set valuation at $5000 or higher, then that becomes the new floor.

Great if you hold gold, unless like before, they force buy everyone's gold at the old price before setting the new price.

QrizB

they force buy everyone's gold

I look forward (not really) to the US (or whichever "they" you had in mind when writing that) trying to buy the entire world's gold at $44 an ounce.

The indirect effects could be interesting (not in a good way) but it's a fascinating thought experiment. Not anything that has any credible chance of happening, though.

PixelPound

https://forums.moneysavingexpert.com/discussion/comment/82079746#Comment_82079746

Executive Order 6102 forbidding "the hoarding of gold coin, gold bullion, and gold certificates within the continental United States". If you don't know the history, look it up.

I said the US gold reserve is valued at $44/ounce not that they'd buy the world's gold at that price. No, people would be paid at the current price, so you wouldn't lose money, under a policy of controlling paper gold. You just own dollars rather than gold.

Afterwards if the US government announced that gold is $10k/ounce, no one else would value it less due to how much gold the US holds. It's called the great gold reset.

I'm not saying either will happen, just pointing out why many people want physical gold because its then gold they own in their or a trusted custody, rather than a paper certificate which is more an IOU.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82080426#Comment_82080426

More importantly, it included the subject of this thread - silver - and made the practice of hoarding an offence punishable by a large fine or imprisonment, which would be rather off-putting. I don't know what sort of prices you could expect to get on the black market in such circumstances, but probably nothing near the $10k/ounce dollar price of this fictitious scenario.

Today, precious metal purchases leave a massive paper trail through dealer records, vault registries, and KYC checks at the point of purchase. If the state wants it, those who have bought in modern times will struggle to hide it from them.

The real losers would of course be those "hoarding" cash, as they find it would cost them $1k of their savings to buy a loaf of bread and a quart of milk. The pitchforks would soon be out.

You cannot increase wealth by simply artificially increasing the value of something in a fiat currency. That will just have the effect of causing hyperinflation in that currency. Even the orange one seems to have red lines when it comes to wreaking that sort of economic damage at home.

QrizB

If you don't know the history, look it up.

I know the history.

At the time the US was on the gold standard, so money supply was tied to the amount of gold held by the central bank. That's no longer the case and the US can increase money supply whenever they choose, simply by issuing more of it.

Even in 1933 the EO had no direct effect outside the US, which was my point. There weren't Federal agents going house to house in London, Moscow and Beijing to arrest people for having more than $100 dollars in gold. If a similar EOnwas issued tomorrow, the US wouldn't be seizing gold in the other ~200 nations of the world.

It's called the great gold reset.

It's called that by a certain subset if conspiracy kooks, most of them Americans who think that the world ends at America's borders.