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Uk Dealers Struggle To Meet Gold Coin Demand

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http://uk.reuters.com/article/idUKTRE6572PV20100608

(Reuters) - UK bullion dealers are struggling to source enough gold sovereign and Britannia coins to keep up with surging demand ahead of an expected hike in capital gains tax (CGT) in the new government's emergency budget on June 22.

Dealers are reporting a backlog of orders for bullion coins recognized as UK legal tender, which are exempt from CGT.

Anthony Baird, managing director of gold dealer Baird & Co, says the company cannot deliver any Britannia coins until August due to lack of supply.

"We buy directly from the public," said Linda Warner, sales manager at bullion merchant ATS Bullion. "In the last couple of weeks, supply has been drying up because people hold on to what they've got in a situation like this."

The supply situation is worse from overseas sources, with European sales onto the market of coins and other forms of investment bullion particularly slack.

Gold is in high demand in Europe as investors there seek out the metal as a safe store of value amid fears over sovereign debt problems in the euro zone, meaning fewer coins are coming back to market.

"We have a backlog of orders at the moment for sovereigns and Krugerrands," said Caroline Jewell, a manager at Blackpool-based coin and bullion dealer Chard.

"We buy quite a lot of our gold from Europe, and (among) the Europeans at the moment, demand is much higher than it is in the UK. European dealers don't have anything to sell to us at all."

TAX ISSUES

In the UK, dealers estimate tax issues are of higher priority to investors than haven demand.

The government is expected to lift CGT, levied on items such as the sale of shares, from its current flat rate of 18 percent to a level closer to the 40 per cent higher rate of income tax as part of a plan to tackle Britain's hefty deficit.

Dealers say the plans have prompted a significant number of UK investors to buy the coins as a store of wealth.

"We have a lot of people materialising capital gains on existing bullion and moving into gold coins that wouldn't be subject to capital gains, such as sovereigns and Britannias," said Anthony Baird of Baird & Co, which operates online retail bullion site goldline.co.uk.

Gold sovereigns, which have been in production since the 15th century, historically had a nominal value of one pound. Their current price fluctuates along with the spot gold price and availability.

The Royal Mint lists its 22-carat 2010 UK Gold Bullion Sovereign, which weighs 7.99 grams, for sale at 230 pounds, and its limited edition 2010 UK Sovereign Proof Coin at 340 pounds.

Gold prices hit record highs Tuesday in dollar terms above $1,250 an ounce, and have also reached new peaks in euros, sterling and Swiss francs as turmoil on the financial markets prompted buying of bullion as a haven from risk.

Demand for gold coins has been strong internationally, with rising sales reported in the United States, Russia and Austria.

A bit of VI ramping or has demand for gold coins outstripped supply?

Another law of unintended consequences from our great leaders?

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Is there anything to stop the government removing the CGT exempt status of Britannia and sovereign coins at some point in the future?

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Is there anything to stop the government removing the CGT exempt status of Britannia and sovereign coins at some point in the future?

they are only worth £1.

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Oddly enough I'm just finishing off building an e-commerce site which sells gold coins (not my business, sadly, I just write the code)

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Oddly enough I'm just finishing off building an e-commerce site which sells gold coins (not my business, sadly, I just write the code)

thats gonna be a success then. make sure you get your money fast.

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Wouldn't that mean there legal tender status being removed?

as no-one in their right mind would use them as such, how would that be a problem?

tim

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http://uk.reuters.com/article/idUKTRE6572PV20100608

A bit of VI ramping or has demand for gold coins outstripped supply?

Another law of unintended consequences from our great leaders?

Bit of both!

From their website ...

Britannia 1 oz Out of stock £ 955.00

Britannia 1/2 oz - out of stock £ 495.00

Britannia 1/4 oz - out of stock £ 254.00

Britannia 1/10 oz - out of stock £ 104.25

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Care to explain ?

Their legal tender value is a fraction of the value of the metal's value.

E.g. a 1 oz Britannia has a face value of £100, but it will cost you £950 to buy one.

Try spending a Britannia at your local Tesco and even if they accept it, you'll only get £100 worth of shopping for your £950 worth of gold.

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Their legal tender value is a fraction of the value of the metal's value.

E.g. a 1 oz Britannia has a face value of £100, but it will cost you £950 to buy one.

Try spending a Britannia at your local Tesco and even if they accept it, you'll only get £100 worth of shopping for your £950 worth of gold.

I accept in that particular example handing over a 1oz Britannia (assuming it was accepted) is not to your benefit, but what if £100 worth of "shopping" was to your benefit (not to mention the other person in the trade) ?

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but what if £100 worth of "shopping" was to your benefit (not to mention the other person in the trade) ?

As the Ferengi would say, "we seek only what is equitable". If both sides are happy with the deal......

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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