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Gold Prices Not Making Any Sense To Me


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I've been looking to buy some gold (physical) from various places based on suggestions from people on this forum (edit: suggestions as to where to buy gold not about my investments themselves). However, after enquiring about prices i am a little confused. eg:

For 1 kilo

ATS Bullion

Sell @ 27,295

Buy @ 24,539

coininvestdirect.com

Sell @ 26,884

Buy @ 26,420

So the spread on coinsinvest is tiny compared to ATS. So why would anyone buy from ATS?

It doesn't make sense to me... anyone else?

Edited by MinceBalls
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I've been looking to buy some gold (physical) from various places based on suggestions from people on this forum (edit: suggestions as to where to buy gold not about my investments themselves). However, after enquiring about prices i am a little confused. eg:

For 1 kilo

ATS Bullion

Sell @ 27,295

Buy @ 24,539

coininvestdirect.com

Sell @ 26,884

Buy @ 26,420

So the spread on coinsinvest is tiny compared to ATS. So why would anyone buy from ATS?

It doesn't make sense to me... anyone else?

ATS have the advantage that if you are UK based you can walk into their premises at the savoy and conduct your business in person.

so not a great advantage considering the spreads

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ATS have the advantage that if you are UK based you can walk into their premises at the savoy and conduct your business in person.

so not a great advantage considering the spreads

But if I have the gold (from wherever I bought it) wouldn't I still be able to walk into their offices and sell to them based on their purchase price? I assume they don't just buy back their own gold?

ta

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But if I have the gold (from wherever I bought it) wouldn't I still be able to walk into their offices and sell to them based on their purchase price? I assume they don't just buy back their own gold?

ta

yes - if it was a known coin or bullion mark on bar

for those who like to buy the odd coin, have a face to face transaction etc. then ATS will tick the spot. But when buying kilo bars, the price diff. is more marked.

i sell on ebay, though if gold spikes rapidly i might be visiting ATS myself, because price volatility would be my prime concern not a smallish diff. in spreads

however, peoples selling strategies differ, but it should be considered imho because offloading gold in a hurry has to be a consideration no matter what the most ardent bug will say. Having said that, Jim Sinclair thinks that the price will plateau if there is a new gold standard, who knows?

good luck

edit - just read that all and it pretty much explains why people like goldmoney

Edited by p.p.
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yes - if it was a known coin or bullion mark on bar

for those who like to buy the odd coin, have a face to face transaction etc. then ATS will tick the spot. But when buying kilo bars, the price diff. is more marked.

i sell on ebay, though if gold spikes rapidly i might be visiting ATS myself, because price volatility would be my prime concern not a smallish diff. in spreads

however, peoples selling strategies differ, but it should be considered imho because offloading gold in a hurry has to be a consideration no matter what the most ardent bug will say. Having said that, Jim Sinclair thinks that the price will plateau if there is a new gold standard, who knows?

good luck

Thanks, that's all very handy. I might consider buying smaller 'chunks'!

I made my initial enquiries last year when prices were about 25% lower and am kicking myself not to have done anything about it then. I know I could potentially be buying at the 'top' (which is why i keep delaying) but I have 100% GDP at the minute because I sold equities when FTSE was at 5200 having purchased regularly when FTSE was below 4500; am not comfortable at current levels and volatility in the market but need to diversify.

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Thanks, that's all very handy. I might consider buying smaller 'chunks'!

I made my initial enquiries last year when prices were about 25% lower and am kicking myself not to have done anything about it then. I know I could potentially be buying at the 'top' (which is why i keep delaying) but I have 100% GDP at the minute because I sold equities when FTSE was at 5200 having purchased regularly when FTSE was below 4500; am not comfortable at current levels and volatility in the market but need to diversify.

i was in a similar position myself and ended up putting about 15% of my lot into gold and silver. i bought Great British coins (sovereigns and britannias) because these coins do not carry Capital Gains Liability (should the price spike to such a point where my CGT allowance would be exceeded).

in some respects, i view gold as insurance; and in that regard i hope it doesn't pay off (if that makes sense!). I would view silver more speculatively, and this would be my chosen investment to outperform (i.e. give me the opportunity to cash in some gains).

There are many different buying strategies; many folks 'average in' each month to avoid volatility. Many use goldmoney.

ps - if you do consider buying silver, you could do a lot worse than buy pre 1947 (50%) or pre 1920 (92.5%) UK Coinage (threeepence to crown) which are usually sold on ebay as job lots (more pre 1947). This is a way of buying silver without paying VAT, but i digress

good luck

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i was in a similar position myself and ended up putting about 15% of my lot into gold and silver. i bought Great British coins (sovereigns and britannias) because these coins do not carry Capital Gains Liability (should the price spike to such a point where my CGT allowance would be exceeded).

in some respects, i view gold as insurance; and in that regard i hope it doesn't pay off (if that makes sense!). I would view silver more speculatively, and this would be my chosen investment to outperform (i.e. give me the opportunity to cash in some gains).

There are many different buying strategies; many folks 'average in' each month to avoid volatility. Many use goldmoney.

ps - if you do consider buying silver, you could do a lot worse than buy pre 1947 (50%) or pre 1920 (92.5%) UK Coinage (threeepence to crown) which are usually sold on ebay as job lots (more pre 1947). This is a way of buying silver without paying VAT, but i digress

good luck

Thankk you :)

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  • 2 months later...

I am not sure about gold coins yet, in fact somewhat unsure generally.

I hold physical bullion that I can buy at much better prices, but I think it is not CGT free.

The places to buy coins and bars had spreads of +10%, but some of them (legal tender) are CGT free.

So I guess it is a question of buy bullion more cheaply per unit of gold and get hit by CGT, or buy coins expensively but save CGT.

I did a little sum below.

i) BULLION. £1000, buys me £990 of bullion after fees with my provider. Asset appreciates 10% over a year to £1089. CGT @28% means total paper value of asset after tax =£1118.88. But would cost me similar fee % to sell out of the investment, bringing it to around total of £1107.7

ii) COINS. £1000, buys me £950 of sovereign or whatever. Asset appreciates 10% over a year £1045. No CGT means paper asset value of £1045, but similar costs to sell out of investment back to coin dealer, bringing it to around total of £992.75

My investment method looked better with this one year example. I then wondered if longer holding period might change the result so did same thing for ten years, as my gold is essentially to insure my wealth and purchasing power over the long term.

i) BULLION. £1000 buys me £990 of bullion after fees. Asset price appreciates 50% (Conservative I think!?) over 10 years to £1485. CGT (if current rates still apply) @28% means total paper value of asset after tax = £1346.4. After fees to sell investment, brings total to around £1332.94

ii) COINS. £1000 buys me £950 value of coins. Asset appreciates 50% over 10 years to £1425. No CGT means paper asset value of £1425, but similar costs to sell back to coin dealer mean total of around £1353.75.

Long term legal tender gold coins looked better here.

Perhaps I am being a complete fool, but I think I will keep my gold position in bullion. Never know when might need to sell earlier than planned because of difficult life events, and I would prefer to have my gold in a vault, not coins under my bed or something. I got burgled last week besides.

However, the gold sovereign I got given by my grand father many decades ago is another matter! ;)

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I am not sure about gold coins yet, in fact somewhat unsure generally.

I hold physical bullion that I can buy at much better prices, but I think it is not CGT free.

The places to buy coins and bars had spreads of +10%, but some of them (legal tender) are CGT free.

So I guess it is a question of buy bullion more cheaply per unit of gold and get hit by CGT, or buy coins expensively but save CGT.

I did a little sum below.

i) BULLION. £1000, buys me £990 of bullion after fees with my provider. Asset appreciates 10% over a year to £1089. CGT @28% means total paper value of asset after tax =£1118.88. But would cost me similar fee % to sell out of the investment, bringing it to around total of £1107.7

ii) COINS. £1000, buys me £950 of sovereign or whatever. Asset appreciates 10% over a year £1045. No CGT means paper asset value of £1045, but similar costs to sell out of investment back to coin dealer, bringing it to around total of £992.75

My investment method looked better with this one year example. I then wondered if longer holding period might change the result so did same thing for ten years, as my gold is essentially to insure my wealth and purchasing power over the long term.

i) BULLION. £1000 buys me £990 of bullion after fees. Asset price appreciates 50% (Conservative I think!?) over 10 years to £1485. CGT (if current rates still apply) @28% means total paper value of asset after tax = £1346.4. After fees to sell investment, brings total to around £1332.94

ii) COINS. £1000 buys me £950 value of coins. Asset appreciates 50% over 10 years to £1425. No CGT means paper asset value of £1425, but similar costs to sell back to coin dealer mean total of around £1353.75.

Long term legal tender gold coins looked better here.

Perhaps I am being a complete fool, but I think I will keep my gold position in bullion. Never know when might need to sell earlier than planned because of difficult life events, and I would prefer to have my gold in a vault, not coins under my bed or something. I got burgled last week besides.

However, the gold sovereign I got given by my grand father many decades ago is another matter! ;)

did you calculate what the result is if gold looses 30% in the next 10 years?

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  • 3 weeks later...

did you calculate what the result is if gold looses 30% in the next 10 years?

High levels of employment.

Low inflation.

Strengthening of the pound.

Pigs learning to fly.

It is difficult for anyone to say exactly what might be happening in 10 years time but anyone who thinks that this so called 'recession' will be a short experience is entirely misguided. Right now, nature's own currency, is a lot safer than most....

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High levels of employment.

Low inflation.

Strengthening of the pound.

Pigs learning to fly.

It is difficult for anyone to say exactly what might be happening in 10 years time but anyone who thinks that this so called 'recession' will be a short experience is entirely misguided. Right now, nature's own currency, is a lot safer than most....

I bought 5000GBP of gold a few years ago, the price immediately dropped 20%. I didn't really understand why.

Then it went up 40% and I sold up. Too scary a ride for me. You just don't know what they market's already priced in, and how it can move against you on what might seem like mild changes in sentiment.

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I bought 5000GBP of gold a few years ago, the price immediately dropped 20%. I didn't really understand why.

Then it went up 40% and I sold up. Too scary a ride for me. You just don't know what they market's already priced in, and how it can move against you on what might seem like mild changes in sentiment.

Your mistake is as follows:

(1) treating gold as an investment; and

(2) Judging your wealth in fiat currency and not ounces.

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