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Tenubracon

Sovereigns Or Krugerrands?

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I'm thinking about buying a small amount of gold coins, basically in an attempt to protect my savings. As a first time investor, I'd appreciate any advice. I have read many of the the existing threads, which were very helpful, but many of them are now quite old and market conditions seem to have changed since they were written. In particular I'm interested in people's opinions on which coins would be the more sensible to buy.

Thanks in advance for any assistance.

Cheers,

Tenubracon

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I'm thinking about buying a small amount of gold coins, basically in an attempt to protect my savings. As a first time investor, I'd appreciate any advice. I have read many of the the existing threads, which were very helpful, but many of them are now quite old and market conditions seem to have changed since they were written. In particular I'm interested in people's opinions on which coins would be the more sensible to buy.

Thanks in advance for any assistance.

Cheers,

Tenubracon

Well done Tenubracon, may I be the first to congratulate you on this wise move.

OK, the main advantage to Kruger's is that they usually trade at a slight discount to Sovereigns, from the perspective of the gold content in the coin. A Sov's gold content weighs 0.2354 Troy ounces, compared to 1 troy ounce of gold in a Kruger.

However, Sov's are CGT exempt, which means they you don't pay 28% (current CGT rate) on any profits. Considering you pay about £20 extra per troy ounce for Sov's, then it's probably worth buying Sov's over Kruger's. However, Sov's are in high demand due to this fact, so whether you'll be able to find enough to purchase to fulfil your gold purchasing requirements could be an issue (certainly in the short term - and you never know when this thing might blow - so time could be of the essence).

Also bear in mind that the govt. can change it's mind at will and reinstate CGT on Sov's, raise CGT on gold across the board or even confiscate gold bullion (so few people own it that they'll be no public outcry if it's done). The way things are going, and that is what we're hedging against by buying gold, these scenarios could well play out in the future.

So, if you're buying, buy in quantities under the (I believe) 7.5k limit, where you don't need to send a copy of your passport to the dealer for his records in case customs come knocking and keep your gold safe in your possession where the authorities can't get their grubby mitts on it , i.e. not in a safety deposit box at a financial institution.

Edited by General Congreve

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Well done Tenubracon, may I be the first to congratulate you on this wise move.

OK, the main advantage to Kruger's is that they usually trade at a slight discount to Sovereigns, from the perspective of the gold content in the coin. A Sov's gold content weighs 0.2354 Troy ounces, compared to 1 troy ounce of gold in a Kruger.

However, Sov's are CGT exempt, which means they you don't pay 28% (current CGT rate) on any profits. Considering you pay about £20 extra per troy ounce for Sov's, then it's probably worth buying Sov's over Kruger's. However, Sov's are in high demand due to this fact, so whether you'll be able to find enough to purchase to fulfil your gold purchasing requirements could be an issue (certainly in the short term - and you never know when this thing might blow - so time could be of the essence).

Also bear in mind that the govt. can change it's mind at will and reinstate CGT on Sov's, raise CGT on gold across the board or even confiscate gold bullion (so few people own it that they'll be no public outcry if it's done). The way things are going, and that is what we're hedging against by buying gold, these scenarios could well play out in the future.

So, if you're buying, buy in quantities under the (I believe) 7.5k limit, where you don't need to send a copy of your passport to the dealer for his records in case customs come knocking and keep your gold safe in your possession where the authorities can't get their grubby mitts on it , i.e. not in a safety deposit box at a financial institution.

Thanks for the advice. I only plan to buy a max of £5000 worth, so I'd be very unlikely to go over the annual CGT limit of £10100, in which case Krugerrands look like the best bet then.

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Thanks for the advice. I only plan to buy a max of £5000 worth, so I'd be very unlikely to go over the annual CGT limit of £10100, in which case Krugerrands look like the best bet then.

Nah, Id go for 1/2 sovereigns. Especially with £5000. Why? They are smaller so you get more of them. I worry about buying a gold coin for £900 on ebay as its alot of money to risk, where as £100 feels safer so easier to sell.

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The full article

http://www.moneyweek.com/investments/precious-metals-and-gems/why-you-should-buy-british-gold-sovereigns-16088.aspx

Why you should buy British gold sovereigns

Aug 14, 2008 - Moneyweek

British gold sovereigns are also not subject to capital gains tax (CGT). Thus all post-1837 British gold sovereigns – because they are legal tender and have a legal tender face value - are capital gains tax free, which is obviously a massive benefit to investors vis-à-vis other gold investments.

The prices of these beautiful coins are only slightly higher than modern gold bullion, but they offer many advantages. Besides not having to pay CGT, other advantages include increasing scarcity, aesthetic value and historical significance. European and British gold coins are recognised by sophisticated investors as one of the most advantageous ways to invest in 'bulk' gold.

European, American and world gold coins are bought by both collectors and investors at a small premium to the price of bullion coins. Perhaps the most popular semi-numismatic gold coins internationally are British gold sovereigns.

The British sovereign (originally the one pound coin) is the most widely traded semi-numismatic gold coin in the world. ]There is constant and excellent liquidity in most countries in the world. For the investor looking for slight leverage to the gold price with the potential for the premium (numismatic value) to rise, British sovereigns are a good way to invest in gold.

History of the British gold sovereign – from Henry VII to James Bond

The first British gold sovereigns were minted more than 500 years ago. They were minted under Tudor King Henry VII in 1489. The coin got its name from that first mintage which depicts the monarch seated majestically on the throne facing outward.

Sovereigns were then struck for Henry VIII from 1509. Henry VIII needed to raise revenue as he was engaged in George Bush-style overspending which led to a flow of gold and silver to Europe (equivalent of dollars to Russia, OPEC nations and China today).

Thus he was responsible for debasing and devaluing English money when he reduced the precious metal content from 23 carat to 22 carat to 20 carat (96% to 91.6% to 83.33%). Silver coins were debased even more and by 1551 silver coins had been reduced to 25% of their face value in what became known as the 'Great Debasement'.

The current design type with St. George slaying a dragon on the reverse and the monarch on the front was introduced nearly 200 years ago in 1816 under George III. The sovereign was minted almost continuously from that date until 1932 when Britain went off the gold standard.

British sovereign 'kings' minted during the reigns of Edward VII and George V are probably the most widely owned and recognised pre-1933 gold coins.

In 1816 the British gold sovereign as we know it today was first introduced, and as the British Empire expanded under Queen Victoria during the 1800s, this coin came to be the world's most widely distributed gold coin. Minted originally in London, the sovereign came to be minted all over the world as Australia and South Africa came to be large gold producers. Mints in Pretoria, Bombay, Ottawa, Melbourne, Sydney and Perth minted thousands of sovereigns during the late 1800s and early 1900s.

The design of Saint George aboard his brave steed, slaying the dragon, is common to the reverse of all variations of the coin. Saint George, who is believed to have lived from 275 to 303 AD, was a soldier of the Roman Empire from Anatolia, now modern-day Turkey. He was venerated as an Islamic and Christian martyr.

George was immortalised in the tale of George and the dragon in a collection of hagiographies and lives of the saints known as The Golden Legend, or Legenda Aurea. He is the patron saint of Canada, Catalonia, England, Ethiopia, Georgia, Greece, Montenegro, Portugal and Serbia, as well as a wide range of professions and organisations. This gives gold sovereigns an international appeal not enjoyed by many coins.

When coins were sent to places such as the United States for international payments between governments, they were frequently melted down into gold bars because of the federal regulations then in force. When gold coins were finally withdrawn from circulation in 1933 in the US, many thousands of British gold sovereigns were consigned to the melting pot.

Gold sovereigns were accepted as money and as payment throughout the world at the height of the British Empire and indeed this international currency may have helped create and strengthen the empire.

More recently, many armies around the world (including the US Army) gave their servicemen an emergency supply of gold sovereigns. They are still recognised in most parts of the world and, unlike paper dollars, will not be damaged by shredding, water or intense heat.

This is why Q gives James Bond 50 gold sovereigns in From Russia with Love. Near the beginning of the movie, Q gives Bond a special black briefcase. Hidden in the case are 40 rounds of ammunition; a flat throwing knife; an AR-7 folding sniper's rifle; and, embedded in 2 straps hidden inside the lining of the case, 50 gold sovereigns.

Gold sovereigns: conclusion

It is estimated that only 1% of all gold sovereigns that have ever been minted are still in collectible condition. It is this relative rarity in relation to bullion coins and bars that leads to leverage whereby, in gold bull markets, the value of these coins increases by more that the actual price of gold.

Unlike paper investments or speculations, British gold sovereigns have a real and permanent tangible value. Therefore, they offer two ways to build wealth. They can offer the best of bullion and numismatics in one investment. They contain the intrinsic security of bullion or precious metal in a pure form and can also offer additional profit potential due to their aesthetic and historical appeal.

The legal tender gold British gold sovereign has always been a popular coin for collectors and is becoming increasingly popular with risk conscious value investors seeking to avoid having to be capital gains tax.

Today premiums remain very low on the world's most famous gold coin and even beautiful Queen Victoria sovereigns from the second half of the 19th century can be bought at great value bullion prices, near spot or melt value.

Experienced, knowledgeable investors have long known that semi numismatic gold coins can be solid investment choices. They retain their value in times of global geopolitical instability and when there is economic uncertainty, during systemic and monetary crises and in recessions and depressions. With systemic risks increasing and more banks runs possible in the coming months, the wisdom of holding a few gold sovereigns in one's possession or in a depository will be clearly seen by all.

It is important that investors look at their portfolios holistically and have a financial insurance component to their portfolio. Used correctly, a small allocation to British gold sovereigns can be a highly effective component of a properly diversified investment portfolio.

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Thanks for the advice. I only plan to buy a max of £5000 worth, so I'd be very unlikely to go over the annual CGT limit of £10100, in which case Krugerrands look like the best bet then.

A new 2010 sovereign from Baird & Co costs £198.50 (7.32g of gold @ £27.11 a gram)

A Krugerrand (various years) £818 (31.1g of gold @ £26.30 a gram)

I have some 1ozt Krugerrands, but I do prefer sovereigns, for CGT reasons, their size and that they used to be a circulated gold coin in Britain and the British Empire.

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In addition to the above (given the choice I'd only buy 1/2 sovs) there is a hidden history in sovereigns: were they used to buy slaves, or release hostages? if you buy a coin over a hundred years old you can romance over the history. Whereas the krugerands were minted to avoid laws put in place by other countries to put pressure on SA to end apartheid.

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In addition to the above (given the choice I'd only buy 1/2 sovs) there is a hidden history in sovereigns: were they used to buy slaves, or release hostages? if you buy a coin over a hundred years old you can romance over the history. Whereas the krugerands were minted to avoid laws put in place by other countries to put pressure on SA to end apartheid.

Where is the best place to buy sovereigns in your humble oppinion. I am trying to pick up any that appear in local auctions, but the fee spread is pretty big. Unless gold goes up 30% they wont go into profit after a buy and a sale there. Ebay seems to be the market at £200 plus. Are they all genuine on there? What is the best dealer to buy a few grands worth.

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Where is the best place to buy sovereigns in your humble oppinion. I am trying to pick up any that appear in local auctions, but the fee spread is pretty big. Unless gold goes up 30% they wont go into profit after a buy and a sale there. Ebay seems to be the market at £200 plus. Are they all genuine on there? What is the best dealer to buy a few grands worth.

Coininvest.com is the best place IMO, although compare with Bairds

http://www.coininvestdirect.com/main.php

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http://www.elminvestments.co.uk/gold-coins.html

http://www.hattongardenmetals.com/gold-coins.aspx

http://atkinsonsthejewellers.com/special-offers.php

http://www.coininvestdirect.com/en/gold_coins/

I have bought off three of the above, and sold to two of the above.

For sovs and krugs I find that CID have been overpriced of late.

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http://www.elminvestments.co.uk/gold-coins.html

http://www.hattongardenmetals.com/gold-coins.aspx

http://atkinsonsthejewellers.com/special-offers.php

http://www.coininvestdirect.com/en/gold_coins/

I have bought off three of the above, and sold to two of the above.

For sovs and krugs I find that CID have been overpriced of late.

ME or atkinsons seem about the best. what do you think of atkinsons job lots of coins?

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ME or Atkinson's seem about the best. what do you think of Atkinson's job lots of coins?

The job lots seem decent, they had a bundle of 10 x 1/2 Vic shields for 990 (?) that has now gone.

Unusual pricing system in that they show a discount the more you buy, and they seem competitive.

But they are new kids on the "web" block, lets see how their competitive edge holds up,

CID are still good on bullion, but the pits on sovs and krugs.

Had a look at ME, was not impressed, Elm Investments still show bottom price.

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http://www.elminvestments.co.uk/gold-coins.html

http://www.hattongardenmetals.com/gold-coins.aspx

http://atkinsonsthejewellers.com/special-offers.php

http://www.coininvestdirect.com/en/gold_coins/

I have bought off three of the above, and sold to two of the above.

For sovs and krugs I find that CID have been overpriced of late.

Have you bought or sold through Elm Investments? I've never come across any recommendations but quite a few people seem sceptical about them?

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The job lots seem decent, they had a bundle of 10 x 1/2 Vic shields for 990 (?) that has now gone.

Unusual pricing system in that they show a discount the more you buy, and they seem competitive.

But they are new kids on the "web" block, lets see how their competitive edge holds up,

CID are still good on bullion, but the pits on sovs and krugs.

Had a look at ME, was not impressed, Elm Investments still show bottom price.

Yes ME do look cheapest.I may give them a go. CID will haggle if you are buying a reasonable amount. They offered me a price on sovs which was half way between their buy and sell price.

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forget about sovs and kruggers - buy old UK silver coinage bulk buys, don't pay VAT and ride the silver wave which will make the gold one look like a ripple :P

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forget about sovs and kruggers - buy old UK silver coinage bulk buys, don't pay VAT and ride the silver wave which will make the gold one look like a ripple :P

What's the rationale for this?

Edited by Tenubracon

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Thanks to everyone who offered advice. I noticed on some of the sites there are multiiple prices for coins (buy, netto , brutto). What do these mean?

Buy is what the dealer will pay.

Netto is the purchase price without VAT.

Brutto is the price including VAT, which is the same as netto price for gold investment coins and bars purchased in the E.U.,as there is no VAT.

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  • 244 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% +
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      • Even
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      • up 5%



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