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A Short Guide To Buying Coins

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Steve ask for a guide in thread http://www.greenenergyinvestors.com/index....ost&p=49050 like this so here is my attempt to guide people in buying coins

 

Should I Buy Coins or Bar

The choice is yours but you should ask the question, “What is easier to sell, a bar, commemorative medallion or a coin that is legal tender in the country that it is produced in?”. If you buy certain coins then in the UK they remain free of Capital Gains Tax as all sterling coin ("Legal Tender") is not a chargeable asset under the Taxation of Chargeable Gains Act 1992

 

What is Sterling coin or "Legal Tender" is a bit more confusing as all coins before the Coinage Act 1870 are within the prerogative of the Crown and every else is covered by Parliamentary Acts. Basically everything before 1969 is no longer legal tender and can be melted down anything after cannot. Gold coins are treated separately in the different Coinage and Currency Acts and these make all gold coins from 1837 legal tender and they cannot be melted down, this is also why gold coins are CGT free. Silver coins are different again you have to go back to 1947 when there were 50% silver, pre 1920 they were 92.5% silver, none of these are legal tender and are not free of CGT in the UK but modern silver Britannia’s are.

 

Other countries have different rules so you do need to understand the ones in your country

 

What Coins Should I Buy, Numismatic or Bullion, Krugers, Ducats, Sovereigns, Maple, etc

If you want a coin may go up in the future because of its rarity value then buy a numismatic coin. You can buy them from most numismatic dealers, in the UK have a look at http://www.bnta.net/ for a list of dealers, there are loads and the coinage does not have to be gold, in fact some of the rarer and more expensive ones are not gold. Like anything rare the price increases but only when there are buyers who have the cash to buy them. Keep away from them unless you want to be a collector as there are better things around to waste your money on. If you think that the financial markets are rigged then you just would not believe the antique market.

 

If you just want a bullion coin then are many but I suggest that you stick to ones that are easily available in your country as then they are easier to resell as your local dealer will know what they are just by touch and sight. If you take in something like a Poltina then the dealer will not know what it is and you will not get a decent price for it.

 

Precious metal dealers like Bairds in the UK are not numismatic dealers they are bullion dealers, even though they sell coin it is in the main bullion and not collector quality. Physical bullion is a different business, if it is rare they can't melt it so they do not really want anything to do with numismatic quality coin and they just want to pass it on for as much as they can get.

 

How Do I Tell That It Is Not A Fake

Whatever you do don’t buy a Fisch, you don’t need one just buy a small metal ruler and a small digital scale that reads to 0.1g, that’s all you need and unlike a specific tester you can use them elsewhere, also a high quality print of the coin helps. You don't need coin testers, specific gravity tests, resonant frequency tests, hardness tests, etc...

 

Check the coin against the print. Measure the diameter, measure the depth and measure the weight. A clean coin, not drilled, chipped or bent will always be within a few percent of the official size and weight of the coin. If it was gold covered lead it would be 1/3 thicker, it does not sound much but place it next to a real coin and you will see just how much it is. If it is 9ct gold and not 22ct or pure then it would be close to a 1/4 thicker. Your fingers can tell the difference of over 1/1,000 of an inch, it is very, very noticeable!

 

Last test for coins that are not proofs, balance it on your finger over a carpet and tap the coin lightly with a pencil, this tests to see if the coin has been pressed or stamped and not cast or made of a sandwich of metal. If it goes ‘ping...’ and has passed the other tests it is so real I would be happy to buy it off you, regardless of what you think it is. If it goes ‘dofh’ then it is a fake.

 

That’s all you need.

 

What Fakes Are There

They are likely to be fake coins made from 9ct gold or plated lead or other metal. Lets take Krugerrands as an example, if you did get a fake 9ct Krugerrand you would spot it quite easily but not just through the colour as that can be matched by adjusting the metals used to make the coin. Size and weight would be the biggest indicator, if the size was right the coin would only weigh about 25g, the difference of 9g is about the same weight as a £1.00 coin. If the weight was right then it would be a 1/4 larger than its true size be it either wider, deeper or both. A 1/4 of anything is a huge amount and easy to spot.

 

Trust your senses, I received a 9ct Austrian Ducat fake and as I took it out of the packaging I could tell that it was wrong without resorting to scales or ruler. If you handle a 100 or so 22ct or pure gold coins and then pick up a 9ct or 14ct coin, it will tell you. Handle a 1,000 and you will not even need to pick it up to see that it is wrong. Not everyone has the opportunity to handle lots of coin so reply on the ruler and scale method.

 

There are meant to be fake coins out there that do weigh the same as the real coin they are supposedly made out of platinum. So even if you find one then don’t worry if anybody found out as currently it would be worth more than gold.

 

Nobody has found tungsten fakes yet because the metal is just too hard to work with and gold is still too cheap. Try stamping tungsten in the same way that a coin is made and it will destroy the stamp mill after a few rounds have been through it. The only way to do it would be to use a tungsten core with a gold bonded outer shell that could be stamped. A setup that can do this would be costly, it would have to produce a lot of fake coins to make it worthwhile or the price of gold would have to be far higher.

 

Apart from Tungsten and Platinum just about everything heavier than gold glows in the dark and makes your hair fall out if you near it for too long.

 

Selling

Private buyers if you can find them but be careful of selling anything but numismatic coins in an auction as the margin may just wipe out your profit. Dealers are good as they basically charge spread/commission on the price of gold, gold price futures, the size of their stock and the amount of demand they are seeing. They are interested in turnover not investment, sell 1 coin make £10, sell 1,000 coins and make a £10,000. A good dealer will fill up when they think the price of gold is low, future price looks upward and the demand that they see is high. At present most dealers have little stock left and demand is high even though gold price has stabilised. In a selling market they will increase the spread/commission as much as they can to cover any short fall. Some will even hedge the market to reduce any potential loss. Remember that just because you are aware of the market conditions the next person in line may not be or will believe that the price of gold will go up or they must buy gold to fulfil a previous order or buy for manufacturing.

 

Also you would be amazed at how many people want to buy or sell PM’s without having to notify someone. Relatively compact, easy to sell, price may spike up and down intermittently but over a longer term is quite stable. Buy a coin a month, save them and give them to your children, grandchildren or lover before you pop your clogs or even leave them a letter in your will with a pirates map. Take a few abroad and flog them to pay for you holiday spending money. Physical is so hard to tax, that’s one reason why governments hate PM's

 

 

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More on the HMRC reporting requirements for anyone who buys investment gold.

 

The Gold Team has been replaced with the Financial Services (VAT & IPT) Team and the notices have all been updated, all were updated in February 2007 and 2008. If you want to have a look then Notice 701/21A lists all of the coins that the HMRC has declared as investment coins. The reporting is the same for both coin and bar Notice 701/21 6.1 states that records of sales must be kept for investment gold which is delivered or available to be taken away by your customer, so any company that offers delivery at some point are required to keep a record. Except that in the next section 7.1 they have stated that the requirement is for gold that is delivered or taken away. The £5K limit still applies to a single transaction or a £10K limit for yearly transactions before they need to know who the buyer is.

 

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Thanks for this. Very good.

 

Why not pin Steves thread too?

 

I found both threads very informative, and Steves thread gave me a few more alternatives for bullion suppliers that I was unaware of

 

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I know some people only look in the main section. That's why I created this:

 

Pinned: A Collection of Basic Guides & Notable Threads

Gold, Silver, Coins, Polls - To save you searching

http://www.greenenergyinvestors.com/index.php?showtopic=3784

 

and unpinned one of my other threads there.

 

It's pinned in the main section, so anyone only looking there can easily gain access to all the notable threads.

 

It's tricky trying to please everyone, but I hope that's a good compromise.

 

PS Glad you found my ramblings useful :D

 

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It's supposed to cover all topics.

I'm not keen on having copies, but maybe we could move it, then move it back and leave a link to the new location ?

So there are just pinned links to the one place.

I'm new to this software so haven't done that before.

Is that what you meant ?

 

 

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I know some people only look in the main section. That's why I created this:

 

PS Glad you found my ramblings useful :D

 

 

Yes I found it very useful. Probably half of it I was aware of from here and listening to the various podcasts, but it struck me as invaluable to someone who is starting out in gold investing.

 

I was about to post up asking for info other reputable bullion dealers as the one i have been using has irritated me somewhat, but your post answered that for me.

 

Think I will try ATS if you think they are good?

 

Cheers

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More on the HMRC reporting requirements for anyone who buys investment gold.

 

The Gold Team has been replaced with the Financial Services (VAT & IPT) Team and the notices have all been updated, all were updated in February 2007 and 2008. If you want to have a look then Notice 701/21A lists all of the coins that the HMRC has declared as investment coins. The reporting is the same for both coin and bar Notice 701/21 6.1 states that records of sales must be kept for investment gold which is delivered or available to be taken away by your customer, so any company that offers delivery at some point are required to keep a record. Except that in the next section 7.1 they have stated that the requirement is for gold that is delivered or taken away. The £5K limit still applies to a single transaction or a £10K limit for yearly transactions before they need to know who the buyer is.

 

 

I'm assuming these limits are restricted to gold only (not silver).

 

If someone has accumulated close to £10,000 coins in 12 months could their spouse then purchase nearly £10,000 in the same year without the 'team' being notified?

 

 

Edited for cr4p typing.

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I'm assuming these limits are restricted to gold only (not silver).

 

If someone has accumulated close to £10,000 coins in 12 months could their spouse then purchase nearly £10,000 in the same year without the 'team' being notified?

...

 

The £5K single and £10K yearly limit is for gold only. There are no reporting requirements for silver unless it is a fund, ETF, etc, then the €15K limit is for single or yearly under the Money Laundering Regulations 1993.

 

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The £5K single and £10K yearly limit is for gold only. There are no reporting requirements for silver unless it is a fund, ETF, etc, then the €15K limit is for single or yearly under the Money Laundering Regulations 1993.

 

 

Thanks id5,

 

I think I know what to ask mrs HM for at christmas. Which I think we may have in August. :rolleyes:

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The £5K single and £10K yearly limit is for gold only. There are no reporting requirements for silver unless it is a fund, ETF, etc, then the €15K limit is for single or yearly under the Money Laundering Regulations 1993.

 

Don't know whether you can answer this, but what if anyone went further and bought for their children or grandchildren?

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Any useful advice on how and where to buy Shekels? Just a bit fascinated by them and want a small percentage as part of a diversified portfolio if possible.

 

Particularly on the safety of purchase? Trustworthy sources, physical receipt, safe storage etc

 

Riggers

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Don't know whether you can answer this, but what if anyone went further and bought for their children or grandchildren?

 

You can happily buy and give them what you want, CGT rules still apply though except for any legal tender but both will come under inheritence tax when you die. If I was to leave any of my offspring anything it would be a letter with a map in it, one marked with an 'X' and the words dig here. Very hard to tax physical coin is :lol:

 

 

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Any useful advice on how and where to buy Shekels? Just a bit fascinated by them and want a small percentage as part of a diversified portfolio if possible.

 

Particularly on the safety of purchase? Trustworthy sources, physical receipt, safe storage etc

 

Riggers

 

I haven't seen any new gold Sheqel (Shekel) coins at dealers for quite a while. They do come up but not often. To be honest with you I could get them but they would carry a premium over other coins. Personally I would buy them from the Israeli Government Coins & Medals Corp, similar to the UK’s Royal Mint, which is about as trustworthy as you can get http://www.isragift.co.il/asp/main.asp They are the selling arm of the Bank of Israel http://www.bankisrael.gov.il/catal/cataloge.htm

 

For old Shekels you had best look at the big auction house stock such as Baldwins http://www.nobleinvestmentsplc.co.uk/onlin...ncient%20Jewish , Dix Noonan Webb http://www.dnw.co.uk/dnw/coins/coinshome.htm , or Spink http://www.spink.com/home_page/index.asp . You had best phone them up and ask them to put you on the mailing list so that when the coins you are interested in come up for auction you will be informed. With ancient coins, just like antiques, provenance is the key to a good price. There are a large number of the fake coins from the Ancient Jewish or Biblical era in circulation.

 

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I haven't seen any new gold Sheqel (Shekel) coins at dealers for quite a while. They do come up but not often. To be honest with you I could get them but they would carry a premium over other coins. Personally I would buy them from the Israeli Government Coins & Medals Corp, similar to the UK’s Royal Mint, which is about as trustworthy as you can get http://www.isragift.co.il/asp/main.asp They are the selling arm of the Bank of Israel http://www.bankisrael.gov.il/catal/cataloge.htm

 

For old Shekels you had best look at the big auction house stock such as Baldwins http://www.nobleinvestmentsplc.co.uk/onlin...ncient%20Jewish , Dix Noonan Webb http://www.dnw.co.uk/dnw/coins/coinshome.htm , or Spink http://www.spink.com/home_page/index.asp . You had best phone them up and ask them to put you on the mailing list so that when the coins you are interested in come up for auction you will be informed. With ancient coins, just like antiques, provenance is the key to a good price. There are a large number of the fake coins from the Ancient Jewish or Biblical era in circulation.

 

Thanks for the education on this, didn't realise they were quite as infrequent as that. Oh and i'll leave the antique stuff well alone.

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so here is my attempt to guide people in buying coins

 

Thats a fantastic guide, many thanks for posting that.

 

A question I would like to ask is regarding the pricing of both Gold and Silver coins. There is currently some debate regarding the detachment between the paper and physical side of Gold and silver, if this detachment has indeed happened, how can we calculate "the true cost" or a “fair value” when the time comes to sell if there is a detachment from the paper price.

 

I used to purchase my coins by taking the spot price in USD, converting it into GBP (I'm UK based) and then adding on the premiums as required, I'm quite happy to carry on purchasing via this method as the "paper value" has fallen recently as I am sure everyone is aware.

 

Using the age old theory that a 1oz gold coin would be of equal purchasing power of a Toga, Belt and sandals, and today a Fine Handmade suit, Belt and a nice pair of shoes, would this still be the case when compared to population increases in the world and the amount of gold/silver actually mined/consumed?

Obviously we can see that the population increased during this time, and is continuing to do so, and I’m sure that the mines are still pulling out gold and silver on a regular basis.

 

Does anyone know (as a guide) how much gold and silver there actually is per person in the world today? I once heard that there was approximately 2oz’s of gold per head. But I’m not to sure if this is true.

 

Any thoughts/comments regarding this would be welcomed,

 

All the best

 

SR

 

 

 

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Think I will try ATS if you think they are good?

 

I have delt with ATS, and found them to be very good, i would use them again.

 

otherwise have a look at some of these http://www.bnta.net/members.php

 

 

 

 

by the way, it's that time of year again ............

 

http://www.bnta.net/page.php?subaction=sho...p;id=1177545968

 

 

 

 

 

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...if this detachment has indeed happened, how can we calculate "the true cost" or a “fair value” when the time comes to sell if there is a detachment from the paper price.

...

 

Some of these questions, especially the one I have quoted above, would be better asked in the main forum as there are people with a better knowledge of detachment than I even though I follow the value of metals closely. I can tell you though that you could suit yourself quite happily for 1oz of gold but there is a major difference between a fine handmade suit and an outfit to cover oneself.

 

You can find the stats on silver and gold stock/production on the World Gold Council website http://www.gold.org/

 

 

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I've got Krugers and British Sovereigns but feel I need to acquire some of the fractional gold coins for ease of use should we face a worst case scenario where retailers will only accept PM coins. I don't want to be in a position where I have to buy masses of say groceries because they are unable to give me change for a sovereign.

 

The bags of silver available in the USA look ideal but as a UK resident obtaining them may be out of the question and apart from that most people would n't recognise them here.

 

The 1/10 coins may be my best bet and if so I'm wondering which ones carry the least premium?

 

I've used ATS up to my £10,000 limit, I liked their service because you can use a debit card and your coins arrive before 1pm the next day. Are there any other reputable dealers in the UK that operate this way?

 

TIA

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I've got Krugers and British Sovereigns but feel I need to acquire some of the fractional gold coins for ease of use should we face a worst case scenario where retailers will only accept PM coins. I don't want to be in a position where I have to buy masses of say groceries because they are unable to give me change for a sovereign.

 

The bags of silver available in the USA look ideal but as a UK resident obtaining them may be out of the question and apart from that most people would n't recognise them here.

 

The 1/10 coins may be my best bet and if so I'm wondering which ones carry the least premium?

 

I've used ATS up to my £10,000 limit, I liked their service because you can use a debit card and your coins arrive before 1pm the next day. Are there any other reputable dealers in the UK that operate this way?

 

TIA

 

You will not need fractional gold coins for the SHTF scenario. Gold in coin or bar form is to protect your wealth for when the scenario has ended or for moving your wealth between areas. When the dust starts to settle then gold can be exchanged for assets, physical or paper cash to restart your life.

 

When the SHTF you will want silver coin for a few months of daily living and far less than you imaging as no one will trust the local currency which will either have died of inflated beyond recognition. Stick with the legal currency from the area that you live in as it will be easily recognised and trusted.

 

If the SHTF period lasts longer than a few months then you will need hallmarked gold chain to continue to live with. Chain gold is easily checked for purity using a touchstone, the required amount snipped from the non-hallmarked end and you get silver coin for daily living in exchange.

 

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I've got Krugers and British Sovereigns but feel I need to acquire some of the fractional gold coins for ease of use should we face a worst case scenario where retailers will only accept PM coins. I don't want to be in a position where I have to buy masses of say groceries because they are unable to give me change for a sovereign.

The bags of silver available in the USA look ideal but as a UK resident obtaining them may be out of the question and apart from that most people would n't recognise them here.

The 1/10 coins may be my best bet and if so I'm wondering which ones carry the least premium?

I've used ATS up to my £10,000 limit, I liked their service because you can use a debit card and your coins arrive before 1pm the next day. Are there any other reputable dealers in the UK that operate this way?

TIA


Look at pre 1947 50% silver and pre 1920 90% silver uk coinage. Sixpences, florins, shillings etc

These can be bought from ebay and I think Chards might sell them. You wont find them at spot tho, but saying that insurance always costs something :)

Guarenteed silver content

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Thanks for the replies guys, never thought of our old silver coinage.

 

Off to make some enquiries.

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