Buying gold, how to make sure you get the real thing?
I’ve seen the CC, read a lot on the subject and I am now thinking of moving part of our savings to physical gold. Not only to protect my savings from inflation, but also to have it at hand when the banks go down under…
So, I searched the internet to see where to buy it (Krugerrands, Sovereigns) and I see a few sources. But: there is an interresting difference in price of coins. I can buy Sovereigns "just around the corner", but they cost about 6% more then buying a couple of hundreds of kilometers away (which is a nother country here in Europe!). The far away store also has Krugerrands, the local store doesn’t have.
Now I don;t mind to drive 500km’s/300miles roundtrip to buy bullion coins, but I would like to make sure I get "the real thing". Other than testing then when buying (which would require me to get a test kit and know what I’m doing…), how do I make sure I get real .999 gold Krugerrands or .983 Sovereigns?
Are there simple things to look for when buying bullion gold? Can I weigh a Krugerrand to see if it actually is 31.1034 grams (probably better to weigh 10 coins then) and then be fairly sure to have a real Krugerrand? Any other tricks for a very novice gold buyer?
A few weeks back I bought from the UK royal Mint. At that time they prices from other suppliers were within a couple of £’s the same and there was no question of authenticity from the mint. On Ebay Sovereigns were going through at the same price as the mint. Since then the Royal mint prices have gone up, its now £190 for Sovereigns.
Since I am in the Netherlands I cannot use the UK Royal Mint that easily (and I would be limited to Soverigns). If I could, I wouldn’t mind paying a small premium on top of the gold value for that. I wouldn’t buy gold from ebay though, way to risky.
And 190 pounds for Sovereigns? I have seen prices of around 170 euro’s… and the pound has fallen, but not that much…
Best method I’ve come to understand is to buy gold on the futures market, and then take delivery
– it requires purchasing in larger lot(s) than one might care to, but you are assure of its authenticity.
To take delivery, you have 2 options:
1) store the gold at the CME’s vault which is a good idea if you plan on selling it back since you do not have to go through re-authentication of the gold.
2) to take physical delivery, you are required to utilize CME approved armored vehicle delivery service to your delivery destination (at your expense) which makes ‘local’ delivery to a bank’s safe deposit box the most practical approach I’ve come up with
last week the royal mint was £170, which matches the eoro price. Some coin dealers have followed there price one I just spoke too is still at £170. The Mint posts them for free and they dont charge a credit card premium. I also have also used a couple of coin dealers which have been recomended by friends. What I like about the mint stuff is that I have a receipt from the mint, its still sealed in its packaging all factors that may give the person I sell too confidence without paying the proof coin premium. Ebay is bizarre, there were sovereigns going through last week at higher prices than you could buy new from the mint.
Other than testing then when buying (which would require me to get a test kit and know what I’m doing…), how do I make sure I get real .999 gold Krugerrands or .983 Sovereigns?
I don’t think I would buy a .999 Krugerrand. They were not made .999 pure. Most counterfeit gold that I have seen is very obvious if you have spent more than 1 minute holding and examining the real thing.
So, I searched the internet to see where to buy it (Krugerrands, Sovereigns) and I see a few sources. But: there is an interresting difference in price of coins. I can buy Sovereigns "just around the corner", but they cost about 6% more then buying a couple of hundreds of kilometers away (which is a nother country here in Europe!).
My advice: go to that store, buy one Sovereign and carry it in your pocket for a couple of weeks. Take it out and play with it once in a while, comparing it to other non-gold coins and objects. You will leard to spot the difference very quickly.
Posts by me re how a layman can test simply for gold purity
PS from memory, krugrands are not .999 ( are an alloy ) but contain 1 oz of gold
The main thing to be sure of when buying gold is:
That you have plenty of the worthless Federal Reserve Notes or checkbook money that the gold sellers will want in exhange for their valuable gold.
Thanks for all your replies so far! The link to the other article was very helpfull, but I would rather have some sort of test I could do while buying the coins.
@Fivemileshigh: does the holding and feeling experience make me feel the difference between solid gold or gold plated?
@emhswm: a bit impractical for me, since I don’t intend to buy a huge lot (at once), thinking of 10 to 15 Krugerrands (or 10 Krugerrands and some Sovereigns) totalling about 10k Euro. Mostly for protection against hyperinflation (which would ruin my bankaccount savings in Euro’s, but the price of gold would hyperdeflate at the same time I guestimate), partly to have something to use as payment if TSHTF most royally and no paper manoey is available anymore.
@gregory K. Soderberg: that will not be a problem. But I only hope the store accepts anonymous bills, just in case owning gold is outlawed once more. 😉 Otherwise I will leave a paper/electronic trace, which I don;t like.
@tonyph: could I buy at the UK Royal Mint as a dutchman? I would need to use my CC, but alas… Delivery to the Netherlands won’t be free I guess, but the sealed an authentication papers would be a great plus.