Buying gold coins

[feralunderclass]

Dd has about £5k in her child trust fund and would like to buy a few gold coins. On bullionbypost there are loads of different coins, are any better than others in terms of resale value down the line? What about a 2023 King Charles Britannia coin, would that be a good option?
Any advice welcome.

I think when you resell them though (at least in my local gold trade shops) you get about half back what you paid

@Annaishere really? You don't get the gold value as per weight?

In the two stores I looked in when thinking of buying a gold coin for my son I was told the trade in value was about half what I’d pay for the same coin. I was even told it wasn’t a worthwhile investment. I thought it was weird at the time maybe go to a shop and talk to them about it. But perhaps unusual cooks is a good idea for selling later on eBay. i.e the first generation of King Charles coins is maybe a good idea

*unusual coins

But maybe I’m missing something. Maybe by the time 20 years have passed they’ll be worth more in resale value than what you bought them for

I’ve always found Chards to have the best prices. https://www.chards.co.uk/

They also list on their website what they’ll pay for coins too. Currently they’ll sell you a Britannia for £1,606, and offer you £1,542 if you want to sell one to them. Certainly not half.

With Britainnias and sovereigns they’re CGT free and don’t attract VAT (like silver). The other main consideration is how easy it is to liquidate them. You can’t cut the coin in half if you just want £800, you have to sell the whole thing. But lower value coins have a higher premium, so you get a bit less for your money.

Gold isn’t where I’d be putting savings initially though, it’s a bit of a gamble (but each to their own).

I would buy the gold in jewellery. 24k bracelets etc can be bought from most south Asian and East Asian shops. You'll pay the weight in gold and when you come to sell you will also sell at the market rate.

In India it's common to buy gold coins by weight. If you want to sell a coin you sell for the weight, so you are pretty much guaranteed to get your money back plus some, depending what the gold market is doing at the time .
For example a 22kt gold coin weighing 1 gram is £59.45 today.

‘Depending on what the market is doing’ is the key part here, the price can easily go down so it’s not fair to say you’re guaranteed to get your money back.

Even if you sold it on the same day there’s always going to be a spread between what they’re sold at and what someone will buy it at, otherwise they’d make no money.

@@CoffeeTeaCoffee my DH also comes from a country where this is common place. The problem with jewellery is that when you want to sell it, the buyer knocks off the 'manufacturing cost' . The more intricate the design, the higher the cost. This is the advantage of coins/bars, AFAIK there is no such cost and you literally sell it by weight.

Yeah for sure it depends on the design if for example you buy something that has lots of gems you will lose money. If you buy a solid bracelet no gems or same in regards to a chain you buy/sell in terms of weight.
If you want to get that item made into another different item then you will lose money for the processing of it.
But it's one way of having the investment but also using it at the same time.

Op why do you want to buy gold?

Why not invest the money or someone if it in stocks

How old is your dd OP? Have you thought about transferring the money into a LISA to help her onto the property ladder later on?

I have some coins - a mixture of sovereigns and Krugerrands. They have gone up in value by a lot over the last couple of years so in my opinion are a great investment.

Gold isn't strictly an investment - it doesn't produce a dividend or return - it is an asset that just sits there either increasing or decreasing in value. If you buy it in physical form you also have to worry about security of storage and insurance.

If I was going to buy it I would do so from the Royal Mint and get the sovereigns that are considered currency so you at least get beneficial tax treatment. If you were interested in it purely as a form of diversification or hedge against market risk then I'd probably buy a tradable instrument that replicated the value of gold and stick that in a JISA.

If you sell Gold Sovereigns you can probably do a lot better selling to coin dealers than a local scrap gold shop!

Hedge against inflation and buys opportunity and bread in WW3. Small denomination for the latter or gold chain as above poster said. Not the best investment if the world ticks along nicely.

What’s made her choose gold coins? Does she not fancy a S&S ISA or a cash ISA if risk averse? Albeit she probs doesn’t need the tax wrapper (18 & not working?) and could save it in a decent savings account like Chase at 5.1%
Im guessing she’s 18 if she now has access to the CTF?

Gold is not an investment medium: it does not pay an income (as shares pay dividends), and it has no intrinsic source of capital growth (as companies reinvest and grow and change). Over time Gold underperforms the stock market considerably. Gold is treated as a "store of value" and its price fluctuates depending on the market's view of its relative worth compared to national currencies

I am building towards a modest 2% share of my overall portfolio in gold, for two reasons:

1. business as usual: for diversification, to reduce fluctuations in my overall portfolio. Gold does not rise and fall in lockstep with the stock market, so a bit of gold tends to somewhat damp out stock market gyrations

2. exceptional circumstances: as insurance for catastrophic events. Of course, gold is worthless in case of World War III, or the rise of the robots, or a super plague. But there is a category of futures, which are pretty bad, but recoverable, and don't involve extinction. Gold would be useful to get through such circumstances.

Maybe I watch too much SciFi, but I write this on the day that the world's internet infrastructure collapsed, the President of the USA caught Covid again, his opponent narrowly escaped death (and the resulting civil chaos), and the Russian Deputy Foreign Minister stated that Russia would consider using nuclear weapons on NATO countries in some circumstances.

I will be buying packs of 1 gram bars, as you can split them into individual £60 bars like a Kit Kat. Single coins are too big.

www.bullionbypost.co.uk/gold-bars/1-gram-gold-bar/valcambi-100g-gold-combibar/

Buy SP500 ETF instead.

Gold was £1562 an ounce when the OP was written, it's £1860 at this moment. I think it's done well this year.

The way I see it, if the DD has asked for gold coins, then she will probably really enjoy owning them, they are a long term asset not something you would trade. People who are really into gold as an investment say to hold no less than 3-5% of your assets in precious metals (with mostly gold and a little bit of silver) no more than 5-10%.

If the DD would enjoy holding the coins (I love mine, I'm not a jewellery person but I love my coins it's nice to have something special of beauty) does it really matter if she buys her assets in that order, and has the coins first, then starts buying ETFs? I like a passive strategy with my ETF account anyway, I like to have a standing order and buy the same value every week so I bought at an average price. Unless the DD never has the gold she wants then she wont have that option with her coins unless she buys smaller coins which incur higher premiums.

I've used Tavex Bullion and Hatten Garden Metals, I've never paid more than £35 over spot for a 1oz Britannia.