Buying gold, how to make sure you get the real thing?

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elsinga's picture
elsinga
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Buying gold, how to make sure you get the real thing?

Hi all!

 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?

tonyph's picture
tonyph
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Re: Buying gold, how to make sure you get the real thing?

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.

elsinga's picture
elsinga
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Re: Buying gold, how to make sure you get the real thing?

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... Cool

emhswm's picture
emhswm
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Re: Buying gold, how to make sure you get the real thing?

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

Good luck

 

TW

tonyph's picture
tonyph
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Re: Buying gold, how to make sure you get the real thing?

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.

MCFLYFYTER's picture
MCFLYFYTER
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Re: Buying gold, how to make sure you get the real thing?
elsinga wrote:

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. 

Fivemileshigh's picture
Fivemileshigh
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Re: Buying gold, how to make sure you get the real thing?
elsinga wrote:

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.

 

 

gyrogearloose's picture
gyrogearloose
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Re: Buying gold, how to make sure you get the real thing?

Hi

http://www.peakprosperity.com/forum/liquidity-gold-and-precious-metals/6154

Posts by me re how a layman can test simply for gold purity

Cheers Hamish

 

PS from memory, krugrands are not .999 ( are an alloy ) but contain 1 oz of gold

Gregory K. Soderberg's picture
Gregory K. Soderberg
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Re: Buying gold, how to make sure you get the real thing?

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.  

 

 

elsinga's picture
elsinga
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Re: Buying gold, how to make sure you get the real thing?

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.

elsinga's picture
elsinga
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Re: Buying gold, how to make sure you get the real thing?

Just had a quick look at the UK Royal Mint site. A 2009 bullion Sovereign is now at 190 Pounds, which is about 193 Euro's. At http://www.the-house.be/en/catalog/show/1 I can buy them at 168 euro's... a price difference of over 10%. And now I don't understand...

Is the belgian shop very cheap and thus need I take care not to get counterfeit Sovereigns? Or is the Mint just very expensive?

I can buy Sovereigns locally for 178 Euro's, which is still cheaper than the Mint. And I can collect them myself, saving on shipping (which adds because you need insurance) or driving 400 miles to the belgian shop (cost of gas and time).

fujisan's picture
fujisan
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Re: Buying gold, how to make sure you get the real thing?

elsinga,

You should be able to find gold coin shops in the Netherlands. Anyhow, if you drive to Brussels, you'll find other shops near "de Beurs" (Stock Echange) in particular in Zuidstraat (street at the rear of Beurs going south). I understand you fear for counterfeight coins, so I would advice to buy at well established shops. One I would recomand is Gold&4X (formerly Munters). Someone else also mentioned me EuroGold also near de Beurs, but I don't know this shop.

Before driving a long way, please check what coins they actually have in stock. Displaying sell prices on their site does not necessarly means they have the coin in stock. Not sure you'll find Kruggerand or Maple Leaf or other 1oz coins since there is much demand.

elsinga's picture
elsinga
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Posts: 34
Re: Buying gold, how to make sure you get the real thing?

Thanks fujisan! I'll have an online look at Gold&4X/Munters. And yes, I intended to make a reservation for the amount of coins I intended to purchase, to minimise the risk of driving down there for nothing.

I also made a comparison of the different shops to see the difference between sell and buy prices (best for Krugerrands and Maple Leafs BTW, up to 11% on other coins) and the premium for coins based on the raw gold amount (anywhere from *minus* 3.9% on Sovereigns at the-house.be to over 10% on the 10 dutch Guilders gold coin).

The negative premium on Sovereigns at the-house.be kind of makes no sense to me... Can I be wrong? The price of gold on thir site is now listed at 702.7875 euro's per ounce. A single Sovereign costs 170.7 Euro's. And calculating the premium now gets me -3.8%... A real good value for money!

Pablo_Eagle's picture
Pablo_Eagle
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Posts: 7
Re: Buying gold, how to make sure you get the real thing?

Hi Elsinga,

I live in Holland and bought € 8000 worth of Gold in Holland (then at € 575/ounce). It was also sent by mail, insured. Costs €10. Bought Krugerands at Prakkenedelmetaal, Bars of Gold at Goudvizier.

About it. Gold weighs 19,3 gr/cm3. So when buying bars of .999 pure, measure it, calculate the volume, muliply by 19,3 and weigh it. It should also be soft and scratchable. It will not react with smoking pure nitric acid. You can also buy a testing kit for about € 200.

The reason why Krugerands are cheaper to purchase per ounce, is because the size, the face, the weight are less easy to counterfit. They do not weigh 31,1, but 33,93 gr, because being .917 they contain 31,1 gr of gold. The reason for making them .917 is so they are not soft and don't scratch so easily.

Gold selling companies will test their own received gold, because they don't want trouble in the future, like customers testing how well the company burns, if the gold is not ok. 

Pablo_Eagle

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