Kruggerands

J_Kay

Hello,
i was advised to buy some Kruggerands as an investment.Sound advice or a waste of money?
Where would i get them and how much would they be,if there's any point investing?

Regards

cheerfulcat

Hi,

Kruggerands are what is known as bullion coins; they are a cheap(ish) way to buy gold, though you are still paying a premium to the price of gold. I like a little gold as a hedge for a larger portfolio but if you have no other investments they are probably not worth holding, especially in small amounts. Unless you think that the price of gold is going to rise significantly...FWIW, I don't.

If you want to invest a small amount in gold, a more efficient way is probably through gold mine shares, either directly held ( needs a fair bit of research but can be done ) or in a fund - Merrill Lynch Gold & General is the only specific one for gold but some of the commodities funds will also hold gold and other miners' shares.

For more information on investing in gold, have a look at Chard's site -

http://taxfreegold.co.uk/investmentadvice.html

HTH

Cheerfulcat

Stonk

I broadly agree with the first reply, answering your questions about whether it is worth doing.

As for where to get them, I have used ATS Bullion (https://www.atsbullion.com) who are good and trustworthy.

A word of warning. The selling price for single gold bullion coins (anywhere, not just at ATS) tends to be about 7% above the spot price of gold - although I'm sure if you buy in bulk you can negotiate a better rate. Buying prices, maybe 3% below spot. So gold would need to go up 10% before you get your money back - this is a huge bid/ask spread, compared to most other types of investment.

J_Kay

Stonk wrote:

I broadly agree with the first reply, answering your questions about whether it is worth doing.

As for where to get them, I have used ATS Bullion (https://www.atsbullion.com) who are good and trustworthy.

A word of warning. The selling price for single gold bullion coins (anywhere, not just at ATS) tends to be about 7% above the spot price of gold - although I'm sure if you buy in bulk you can negotiate a better rate. Buying prices, maybe 3% below spot. So gold would need to go up 10% before you get your money back - this is a huge bid/ask spread, compared to most other types of investment.

Thanks for the reply,i'll take on board what you say.

jb478914

I recently purchased some bullion.

I accept what previous posters have said about the % above the market price, but I'd say go for it, I quite like having gold coins, for aesthetic purposes.

Plus if you wake up one day and sterling has hyperinflated, you'll still have a bit of gold to barter with!

But seriously I wouldn't buy that much, only as a fun investment, not seriously!

J_Kay

jb478914 wrote:

I recently purchased some bullion.

I accept what previous posters have said about the % above the market price, but I'd say go for it, I quite like having gold coins, for aesthetic purposes.

Plus if you wake up one day and sterling has hyperinflated, you'll still have a bit of gold to barter with!

But seriously I wouldn't buy that much, only as a fun investment, not seriously!

Yeah,i bought just four and i'm happy with what i paid for them.
Cheers.

mjseaden

Hi,

The idea about Krugerrands being ~5-7% above the spot price of gold doesn't really mean anything.

If you buy krugerrands at 7% above the spot price of gold, you can also sell them at 7% above the spot price of gold.

I bought a number of gold sovereigns and 1oz silver sovereigns from Royal Mint at http://www.royalmint.com a few months ago - proof editions (that is, polished) rather than straight bullion. Generally, I'd buy the bullion editions, but the point is that although I have bought at a higher premium above the gold price than bullion coins, when I come to sell them, I can sell at that same premium.

In the case that there is a complete failure of currency, and the fiat currency we are using becomes worthless, then bullion will be a better bet as in the process of barter, arguing that your oz of gold is proof rather than bullion probably won't pass very well.

Otherwise, just remember that your buying and selling price is the price of your gold coin, not the exchange price of the gold it contains, but that the spot price of gold is part of what determines your coin price.

Hope that helps

Mark

GerardL

mjseaden wrote:

Hi,
If you buy krugerrands at 7% above the spot price of gold, you can also sell them at 7% above the spot price of gold.

Yes, but only if you can find a private buyer. If you go through a dealer they'll always be buying at slightly less (7 to 10% ) than their selling price.

Pen_the_Ponderer

Hi,

My parents are about to give me 26 uncirculated krugerrands.

Does anyone know what is the best way to go about selling them and what price I'm likely to get? I'm afraid I know nothing about the gold market or how to get the best price for them.

Thanks