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Simon Black On "Hands Down, The Cheapest Place In The World To Buy Gold Coins" And Some Arbitrage Opportunities

Tyler Durden's picture





 

Hands down, the cheapest place in the world to buy gold coins,

by Simon Black of Sovereign Man

Date: January 17, 2011
Reporting From: Santiago, Chile

For anyone looking to hold gold as a store of value or even medium of exchange, major gold coin issuances like the Eagle, Maple Leaf, and Krugerrand are advantageous because they're recognizable worldwide.

You can do business in a coin shop anywhere in the world from Vancouver to Vanuatu with one of these coins; bulk bullion, on the other hand, needs to be specially weighed and assayed by experts before being traded.

For this reason, the premiums for which gold coins sell tend to rise substantially in crisis periods when demand for physical metal is high. In the initial days of the 2008 financial crisis, premiums shot up from 4% to well over 10%, even though the price of gold was simultaneously falling sharply.

Today, with gold routinely taking out its all-time highs, gold coin premiums around the world have remained fairly high-- this is one of the things that we typically look at here at Sovereign Man as we constantly travel the globe... and why what I'm about to tell you might have you falling out of your chair:

Tim Staermose, one of our Asia partners, was in Hong Kong last week, and he conducted his normal rounds of the various banks in the Central business district that sell gold bullion coins over the counter to walk-in customers such as Hang Seng Bank, Bank of China, and Wing Lung Bank.

At Hang Seng Bank, Canadian 1 Oz Maple Leaf coins -- in pure, 24 karat gold -- were available for cash purchase in Hong Kong dollars at just 0.5% above the prevailing spot price of gold. 

This is dirt-cheap... or as they say here in Chile, 'precio de huevos', and it certainly presents an interesting arbitrage opportunity. Depending on your objectives, however, there may be even better gold coin buys in Hong Kong at the moment.

Over at the Bank of China, for example, the Chinese Panda coins were quoted at 4.9% above spot gold. 

Personally, I think the Panda is one of the most beautiful gold coins of all, and in North America they typically sell for much greater mark-ups above the spot price of gold than most other coins, often over 20%. In the UK it's even more. 

Many collectors value the Pandas simply for their aesthetic beauty; and it probably doesn't hurt that the dealers authorized by the People's Bank of China to sell Pandas in the US have a virtual monopoly on the market.

Still, this situation can be exploited to your advantage-- the difference between the buy price in Hong Kong and the sell price in North America is roughly $275 per 1-ounce coin.

If I had nothing to do and were looking for some adventure, I'd raise some grubstake to fly to Hong Kong, buy coins, and sell them back home at a profit to pay for the trip... or better yet, offer a fee-based service to gold coin investors to buy cheap coins in Hong Kong on their behalf.

For other folks who haven't yet built up a stash of gold bullion, I would urge you to consider taking a trip to Hong Kong to get started; I'm certain that the money you'll save will more than pay for the flights, and a nice holiday for you and your loved ones as well.   

 


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Mon, 01/17/2011 - 13:22 | Link to Comment lunaticfringe
lunaticfringe's picture

Didn't I read somewhere that a Chinese Bank is opening it's doors in the U.S? Just where might I find such a bank?

Mon, 01/17/2011 - 13:32 | Link to Comment bigdumbnugly
bigdumbnugly's picture

from the sounds of it pretty soon i might say any jp morgan.

Tue, 01/18/2011 - 03:51 | Link to Comment ED
ED's picture

3.40pm HK time

Gold Spot 1366

Hang Seng - never had Pandas and no Maples

BoC - Pandas 999 - out of stock HKD 11085

BoC - Maples 9999 - a couple in stock, perhaps - HKD 11092 (approx USD 56/4.1% over spot).

Boy! You guys are fast!

On the other hand, cant see the Chinese selling anything for a bargain. Not in their genetic makeup. I wonder whose Simons HS contact is?

Fri, 01/21/2011 - 20:02 | Link to Comment Geoff-UK
Geoff-UK's picture

If there were any government anywhere in the world more likely to find a way to lie about the gold content of their coins, I'd put my money on...er...well, the USA, but China would be a very close second.

 

Philharmonics, Maple Leafs, and Krugs FTW.

Mon, 01/17/2011 - 13:35 | Link to Comment eaglefalcon
eaglefalcon's picture

www.bocusa.com

branches in manhattan and LA

Mon, 01/17/2011 - 14:53 | Link to Comment Sudden Debt
Sudden Debt's picture

I've heard they bought this old house on 1600 Pennsylvania Avenue
Washington D.C., DC 20500.

Once the paint-job is over (The building will be painted in Communist fashionable Red), they'll move in. There also still seems to be a problem with the current renters who don't yet realize the place is sold.

Mon, 01/17/2011 - 17:49 | Link to Comment Anarchy99
Anarchy99's picture

Now that was funny.

 

But true.

Mon, 01/17/2011 - 20:12 | Link to Comment Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Let me be perfectly clear: the wife, the girls, the mother-in-law, Bo and I are squatters...

Mon, 01/17/2011 - 15:05 | Link to Comment Money Squid
Money Squid's picture

I am looking into opening an account with the Bank of China as long as the money is "stored" in Renmimbi, not USD. Jim Rodgers keeps saying he is buying Renmimbi when ever he can but it is not for sale often. As I have little experience "purchasing" money or trading forex I thought a Renmimbi account might be the best way to go, especially if I can withdraw the money out side the US.

Mon, 01/17/2011 - 16:02 | Link to Comment hellboy
hellboy's picture

I checked and cannot agree with Sovereign Man...

 

Check this out:

In the UK - 1oz GBP 917

http://www.taxfreegold.co.uk/weselloneouncebullioncoinsourchoice.php

In Hong Kong - 1oz GBP 1010

http://bank.hangseng.com/1/2/rates/gold-prices/gold-prices

 

I also called up a few Hong Kong banks to check if the website prices are correct and yes... So dont book your tickets to Hong Kong, well not to buy Gold coins anyway... 

 

Mon, 01/17/2011 - 20:53 | Link to Comment TheProphet
TheProphet's picture

You can get Renminbi from any currency exchange business or from your bank. You will pay a premium averaging 10% over the fixed exchange rate. but if you believe it will significantly appreciate in value...

Mon, 01/17/2011 - 21:44 | Link to Comment Misstrial
Misstrial's picture

Money Squid:

Everbank for you, my friend. They have CD's in renmimbis.

~Misstrial

Mon, 01/17/2011 - 21:49 | Link to Comment Misstrial
Misstrial's picture

lunaticfringe: In Irvine, CA, there are two Chinese banks: EastWest Bank and Omni Bank.

Question for gold owners: is there a color difference between a Krugerrand and a Roo or a Panda or a Maple Leaf?

I  am aware of the gold content difference between Eagles & Buffaloes for example, however, I would like to know if various geographic regions produce gold coins with color differences.Hope I'm being understood here.

Also: anyone watching Alaska Gold Rush on the Discovery Channel?

http://www.youtube.com/watch?v=S6neZD6OpMk

One old miner showed a panful of gold nuggets that looked to have been melted down. About $70k-$100k of gold (imo) in the pan. The color of this Alaskan gold was lighter yellow.

~Misstrial

Mon, 01/17/2011 - 23:47 | Link to Comment Tangurena
Tangurena's picture

Bank of China. And they even let you open RMB denominated accounts. Plus, the deposits at either of the (2) NYC branches are FDIC insured.

http://www.bocusa.com/portal/Info?id=649&lang=1&

Fri, 01/21/2011 - 17:45 | Link to Comment Thisson
Thisson's picture

All fiat is trash.  What difference does it make if it's green trash or red trash?

Mon, 01/17/2011 - 13:23 | Link to Comment bernorange
bernorange's picture

Lots of smoke about counterfeit Pandas.  Caveat Emptor.

Mon, 01/17/2011 - 13:33 | Link to Comment tmosley
tmosley's picture

From Ebay, not the PBoC.

Of course, this means you may have trouble selling them when you get home...

Mon, 01/17/2011 - 14:33 | Link to Comment Arch Duke Ferdinand
Mon, 01/17/2011 - 14:58 | Link to Comment tmosley
tmosley's picture

Stupid article.  The author doesn't know anything about gold or the factors affecting its price.

He even says the Fed isn't printing money, for fuck's sake.

Mon, 01/17/2011 - 15:01 | Link to Comment traderjoe
traderjoe's picture

You beat me to it. Yes, stoopid article. And the Fed's policies could be revoked 'at any time'? Dumb.

Mon, 01/17/2011 - 19:49 | Link to Comment DosZap
DosZap's picture

10/4,

I am SICK as hell of these yokels, basing their predictions on what and where PM's will go.

Using an 1980 model is insane..The USA was the Worlds largest creditor then, now its the 100% opposite.

This alone with our debt ratio , and percentage of GDP to debt, is mind boggling.

Also, no other nation on earth had the issues we all face today.You cannot even make a comparison, simply because its DIFFERENT this time.

VERY different, like, as in the world has never been in such a jam.

With no way out.

Read an article (forget where), the author said that for every Trllion in new debt we add, the price of gold should be $4k per oz higher.

Mon, 01/17/2011 - 15:24 | Link to Comment LowProfile
LowProfile's picture

Sell their physical gold?  ...And buy what, exactly?

Re: One of the points in that blog post:  Capital always goes where it is treated well.  Europe figured this out a long time ago.

You are the very perfect picture of a monumentally stupid motherfucker, you know that?

If you meant paper gold for trading, then I preemptively retract that.  But if not, you are a monumentally stupid motherfucker and deserve to be a poor-ass bitch shinin my motherfuckin' shoes!

Mon, 01/17/2011 - 16:47 | Link to Comment Uncle Sugar
Uncle Sugar's picture

I junked you. I guess the Bernank isn't literally printing paper dollars, but giving electronic money to the PD's which then go to the Treasury to fund the gov't is the equivalent to printing money.

Mon, 01/17/2011 - 17:08 | Link to Comment naughtius maximus
naughtius maximus's picture

Wow very interesting. I'm selling the real thing(?) on ebay right now. If that coin didn't say copy on it I'd be fooled by the picture. As you can see I'm not a coin expert. 

Mon, 01/17/2011 - 21:35 | Link to Comment RockyRacoon
RockyRacoon's picture

Dear, Living_Stone, the definition of counterfeit does not include those clearly maked as a copy.  Those are legal.  It's not the ones marked "COPY" that you need to worry about!

Be sure to watch for these passed off as genuine:

http://coins.shop.ebay.com/Bullion-/39482/i.html?_nkw=mills&_catref=1&_f...

Anything sold with "mills" in the description is going be found soon in low-priced "hoards".

This is why it's best to stick with the known coinage.

Mon, 01/17/2011 - 20:51 | Link to Comment e_goldstein
e_goldstein's picture

tungsten, bitchez.

Mon, 01/17/2011 - 13:25 | Link to Comment JW n FL
JW n FL's picture

DECLARE BITCHEZ!

Mon, 01/17/2011 - 13:25 | Link to Comment Cheesy Bastard
Cheesy Bastard's picture

Not such a good price for tungsten

Mon, 01/17/2011 - 13:26 | Link to Comment JJSF
JJSF's picture

Problem with brining them to the States or EU is that you limited to $10K USD's worth when flying international and unless your flying direct you will probably have to go through a number of security points in various airports en route.

Mon, 01/17/2011 - 13:38 | Link to Comment tmosley
tmosley's picture

No, $10000 is the amount you can take without declaring it.  You can take as much gold or silver as you want, so long as you declare it.  In this case, you are acting as a bullion importer--a perfectly legitimate trade.

Mon, 01/17/2011 - 13:45 | Link to Comment Rahm
Rahm's picture

So I could and pick up $.5m worth of gold maple leaf's, and carry them on with me, with no problem clearing customs?

Mon, 01/17/2011 - 14:32 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I believe tmosley is right re US law.  So the answer is yes.  Have to declare them, do not fail to do that or you could be in BIG trouble.

Re Europe, I do not know, but I think it is OK as well, but have to declare as well.

...

Nice easy CAPTCHA.  Why can't they be easy late at night?

Mon, 01/17/2011 - 14:34 | Link to Comment High Plains Drifter
High Plains Drifter's picture

There is no freakin way I am carrying any gold coins on me in any airport. On that you can make bank for sure. 

Mon, 01/17/2011 - 15:41 | Link to Comment MachoMan
MachoMan's picture

let alone half a mil worth...  although, it wouldn't be prohibitively heavy...  you could carry it on...  but, jesus...  trying to explain you're able to bring it on the plane after declaring to a minimum wage earner is going to be harder than getting half a mil to start with...

[had a bad experience at JFK coming back from an international trip...  was stupid enough to declare a reindeer pelt...  the stupid mother fucker took it out of its bag and started petting it and asked "what is this, a rabbit?"...  yes, it's the world's only 200 lb rabbit...  we've solved world hunger...  please keep rubbing it while I go try and kill myself on the escalator]

Mon, 01/17/2011 - 18:24 | Link to Comment BurningFuld
BurningFuld's picture

You need to declare more than $10,000 at US customs because if you are bringing more than $10K they want to know the source of the funds. So if you travel with a bunch of Gold have a bank statement showing a withdrawal to cover your purchase for example and be prepared for questions.

Mon, 01/17/2011 - 20:00 | Link to Comment DosZap
DosZap's picture

Just make sure to buy DENOMINATED coins.

Krugs, etc, without a face value, legal tender use, would cause the coins to be priced at SPOT.That would severly limit the amount coming in.

Also, the guy did have a TRUTHFUL Comment..........(plus where he was,maybe was a different deal altogether,cuttinfg some slack there, WHY would he lie?).

Just in India, their Prems are very low, except there is a VAT tax on Gld & Slvr, and if I remember its 7.5% on Gld,and 14%+ Svlr, why I have no clue.

Fri, 01/21/2011 - 22:03 | Link to Comment savara
savara's picture

In India VAT on gold and silver is 1% only

Mon, 01/17/2011 - 15:02 | Link to Comment tmosley
tmosley's picture

According to the law, you shouldn't, but no-one follows the law anymore.  At least not in the West.  I would make multiple trips so as not to place all of my eggs in one basket, should some greedy TSA asshole try to take it for himself.

 

Mon, 01/17/2011 - 20:21 | Link to Comment Yes We Can. But...
Mon, 01/17/2011 - 16:49 | Link to Comment Drachma
Drachma's picture

Customs goons would find some way of depriving you of your property.

Mon, 01/17/2011 - 17:09 | Link to Comment naughtius maximus
naughtius maximus's picture

Better hope that the people in customs are honest!

Mon, 01/17/2011 - 21:03 | Link to Comment TheProphet
TheProphet's picture

If you declare it they might attempt to make you pay taxes on it? You will have to give a value. Would a better plan be to put them in an old coin purse you brought with you from home, and if you get stopped, say you carried them with you from home?

Hypothetically, of course...

Mon, 01/17/2011 - 16:11 | Link to Comment Eric The Red
Eric The Red's picture

Getting through screening with a pocket full of gold is something I would be afraid to try.  Doesn't even matter what the regs or laws are.  I'm sure I'd end up with the strip search of a lifetime.  Woo Hoo!!!

Mon, 01/17/2011 - 18:10 | Link to Comment BrosMacManus
BrosMacManus's picture

Moooon Riverrr!!! (sub the doc for T&A)

http://www.youtube.com/watch?v=tBsIcRZBh3A

Mon, 01/17/2011 - 13:27 | Link to Comment economessed
economessed's picture

For those of you who don't have the resources or time to exploit the gold price differential, you can always explore bottle deposit arbitrage (also known as the Seinfeld Mail Truck strategy), which at $0.05 and $0.10 between state borders has a 100% return potential, and none of the 1099 tax implications.

Mon, 01/17/2011 - 13:34 | Link to Comment Cheesy Bastard
Cheesy Bastard's picture

LOL.  The gold price differential thing could work if you could hitch a ride with the president of Tunisia...

Mon, 01/17/2011 - 14:05 | Link to Comment Zeroexperience2010
Zeroexperience2010's picture

We had something similar in Europe: the Germans create a recycling tax for PET bottles (25 euro cents), which doesn't exist for example in France or Belgium: you could buy Vittel or Evian in France, and return the bottles in Germany: 25 cts net profit per bottle. Now they (the high tech Germans) have designed a special ink, with a very controled distribution system that is used to print a logo on the German market bottles, so that only German bottles get a 25 cts refund...

Before this, I heard rumors that some Eastern country citizens made bottles, just to recycle them in Germany (not buying water)

Mon, 01/17/2011 - 14:15 | Link to Comment JW n FL
JW n FL's picture

no one liked the metaphor of swimming and this bullshit story? my bad, carry on!

Tue, 01/18/2011 - 02:51 | Link to Comment blunderdog
Mon, 01/17/2011 - 13:33 | Link to Comment Ploutos
Ploutos's picture

Sell it to whom ?  On Ebay they are bringing around $1,500 from a seller with 10,000 plus feedback.  A local coin dealer will offer you spot.  You will have $1,428 each in these assuming your travel is free.

Mon, 01/17/2011 - 13:36 | Link to Comment Idiot Savant
Idiot Savant's picture

Over at the Bank of China, for example, the Chinese Panda coins were quoted at 4.9% above spot gold. 

Personally, I think the Panda is one of the most beautiful gold coins of all, and in North America they typically sell for much greater mark-ups above the spot price of gold than most other coins, often over 20%. In the UK it's even more. 

Lol, well, you can keep buying those lovely Pandas then. Just be sure to test them before you buy them.

Since you'd have to be pretty wealthy to make the trip worthwhile, I assume we're talking about large bars here. This brings up the issue of who is going to let you cut their bar(s) in half, prior to purchasing said bar?

No fn way I'd purchase large quantities of PMs in the orient. The chinese counterfeit everything!

Mon, 01/17/2011 - 15:13 | Link to Comment trav7777
trav7777's picture

i'm inclined to agree...even from a chinese bank, I would be leery

Mon, 01/17/2011 - 17:12 | Link to Comment naughtius maximus
naughtius maximus's picture

"The chinese counterfeit everything!"

Indeed. I spent some time paroosing alibaba.com and this epitaph makes the most sense "alibaba and the fourty thousand thieves".

Mon, 01/17/2011 - 20:27 | Link to Comment Itsalie
Itsalie's picture

bernank's toilet paper vs 20% fake gold, give me the fake chinese 20% gold anytime.

Mon, 01/17/2011 - 13:40 | Link to Comment Big Mac
Big Mac's picture

Thanks for the info. Unfortunately the markets seem efficient for those who want to play by the rules. Round trip from San Francisco to Hong Kong with two day hotel came up at $1,996 for one person. At $1360/oz that means you could buy/bring in 7.35 ozs which translates to at $275/oz a total gain of $2,021 which is break even! Not a lot of cheese here unless you want to become a bullion dealer.

Mon, 01/17/2011 - 20:15 | Link to Comment DosZap
DosZap's picture

Are they not Listed at Giovernment face value?

A 1oz Eagle is $50.00,how can they use spot to determine your $10k, a legal tender coin should be listed at $50.00,not spot.

Appears yopu should be able to bring in a hell of a lot more than at spot.

Mon, 01/17/2011 - 13:41 | Link to Comment Woppopotamus
Woppopotamus's picture

Bottle deposit arbitrage. Awesome.

Mon, 01/17/2011 - 13:43 | Link to Comment reachsb
reachsb's picture

Well Hong Kong was recently hit by a major counterfeiting episode. Even the seasoned jewelers couldn't identify them. So let's pawn them off on gullible buyers. 

http://www.gata.org/node/9369

Mon, 01/17/2011 - 15:18 | Link to Comment trav7777
trav7777's picture

they can pawn off rhodium coins onto me anytime lol

gonna need some magnetometer testers for the future

Mon, 01/17/2011 - 13:50 | Link to Comment billwilson
billwilson's picture

Asian gold - Sure miss being able to walk into a jewelry store and buy a 24k ring for the spot price of gold, plus a very small mark-up for "the handiwork". The spreads in Canada especially are almost criminal (Scotia being awful).

Mon, 01/17/2011 - 13:55 | Link to Comment traderjoe
traderjoe's picture

I don't know what this guy is talking about. Panda's are available on Apmex at only modest premiums - about what a Buffalo would sell for. I bought a few there, and I would doubt highly my ability to sell them for much more then that premium, if that. They don't strike me as "rare". 

The premium for Maples is low in HK, but Tulving has them on sale for $35 over spot. So, what are you saving $20-25 a coin? A little too much hyperbole in this article...

Mon, 01/17/2011 - 14:02 | Link to Comment Race Car Driver
Race Car Driver's picture

After reading a few articles on ZH by Simon Black, I think he's more a glorified travel agent than anything else. Most of his 'advice' just isn't practical for the average American stiff.

Mon, 01/17/2011 - 14:59 | Link to Comment Tyler Durden
Tyler Durden's picture

Since Black's advice involves extensive travel if not outright expatriation, you are absolutely correct that the average American stiff will not benefit from his articles.

Mon, 01/17/2011 - 15:07 | Link to Comment JW n FL
JW n FL's picture

Tyler? who... wait... you would fly 39 hours to HK to turn and burn or buy suits and come back only to have to explain "X" amount of gold? and you know that you would be flagged going forward for any trip any where... now if you want to drop $50k to go private, rock on.. but public, with a suitcase filled with China's Bullion coming back thru customs would be a bitch, minimum... even you have to agree.. well you dont have too.. but..

Tue, 01/18/2011 - 01:24 | Link to Comment Hephasteus
Hephasteus's picture

Hmm. I got 12 kids here that I've been feeding monsanto genetically engineered food since I stole them from michael jacksons basement. They all have hollow body parts with scanner proof skin. The old fashion carry trade is on.

Challenge Accepted.

Mon, 01/17/2011 - 14:08 | Link to Comment americanspirit
americanspirit's picture

Trust us - these are not counterfeits. And just for you my friend, a special price.

Mon, 01/17/2011 - 14:24 | Link to Comment SilverRhino
SilverRhino's picture

If ONE fake gold coin gets through your purchase in the Orient your arbitrage margin just got hosed.   Too much counterfeit in the asian markets.  

 

Mon, 01/17/2011 - 14:27 | Link to Comment What_Me_Worry
What_Me_Worry's picture

So many fake pandas on the market now.  I bought some from a reputable dealer and still was nervous until I measured/weighed them out.  That said, I love the lot I bought('87s and '88s) and consider them some of my favorites.

It is amazing, to me, that 90% gold eagles carry the largest premiums overall.  The pure gold coins are so much nicer.

Cannot believe Ebay does nothing about the obvious fakes that are sold from China every day on their site.

Mon, 01/17/2011 - 14:28 | Link to Comment gwar5
gwar5's picture

Be careful, Hong Kong had hundreds of ounces of fake gold floating around. It was very sophisticated fake gold.

It was an alloy 20% real gold with a plethora of ingredients including osmium, tungsten.  It was evil genius.

 

Mon, 01/17/2011 - 14:59 | Link to Comment Eally Ucked
Eally Ucked's picture

Invest in hand held XRF analizer to solve 99% problems with fakes.

Mon, 01/17/2011 - 16:00 | Link to Comment MachoMan
MachoMan's picture

Kind of pricey ain't it?

Tue, 01/18/2011 - 00:03 | Link to Comment Eally Ucked
Eally Ucked's picture

The cheapest is around 1500$. 1 oz of gold, almost.

Tue, 01/18/2011 - 10:42 | Link to Comment MachoMan
MachoMan's picture

Link?  I'm actually fancying the idea of opening up a pawn shop and plan on selling coins if I do...  and/or need a no-frills device that a monkey could operate so that employees don't buy the wrong shit while I'm busy posting on zerohedge.  The ones I've seen are in the many thousands of dollars.

Fri, 01/21/2011 - 18:00 | Link to Comment Common_Cents22
Common_Cents22's picture

I was also thinking of a pawn shop.   Anyone know the basic margins you can make in buying gold jewelry and selling it to melters?  Is the good margin at the pawn shop buying gold jewelry and selling it to melters or do melters buy it cheap and get the most margin?

 

how about home jewelry buying parties?   what is the going rate for gold jewelry when people sell it for the gold?

 

 

Sat, 01/22/2011 - 20:06 | Link to Comment MachoMan
MachoMan's picture

low margins, low risk...

Fri, 01/21/2011 - 17:06 | Link to Comment Sokhmate
Sokhmate's picture

DO you know/think if companies selling such device have some known or unknown reporting requirements?

Mon, 01/17/2011 - 15:11 | Link to Comment JW n FL
JW n FL's picture

+++++++++++++++++++++++++++++++++++++

Mon, 01/17/2011 - 14:45 | Link to Comment jesus_quintana
jesus_quintana's picture

What's the hive mind's opinion on buying some nice silver rounds (from a reputable dealer) rather than coins?

I'm in the UK and subject to 20% VAT on silver purchases, so every little bit helps...

Oh, and no premium on pandas here that I can see.

Mon, 01/17/2011 - 15:02 | Link to Comment lsbumblebee
lsbumblebee's picture

At this point I'd recommend buying whatever you can afford. I wouldn't worry about rounds vs. coins as long as, like you said, the purchase is through a reputable dealer.

Mon, 01/17/2011 - 15:20 | Link to Comment Money Squid
Money Squid's picture

Have someone out side the UK buy them for you, or fly to Asia (as per Simon Black) to save on the VAT. Is there a VAT in Jersey/Guernsey ?

Mon, 01/17/2011 - 16:08 | Link to Comment Zeroexperience2010
Zeroexperience2010's picture

Are you subject to 20% VAT on silver coins? In Germany you have a 7% VAT on silver coins and 19% on silver bars, which explains why you have things called coins which are pretty heavy (1kg coins)!

There is no customs control between Germany and UK.

Edit:

just looked into something closer to the UK: Belgium has a reduced VAT of 6% on silver coins.

Mon, 01/17/2011 - 21:18 | Link to Comment Botox4U2
Botox4U2's picture

Most countries don't charge VAT (GST) on .995 + This includes the USA and Canada. If you are being charged VAT in some countries you need to confirm that this is indeed proper.

EVERYONE SHOULD WRITE THESE NUMBERS DOWN IF THEY LIVE IN THE USA OR CANADA

GOLD COINS:

The tariff number for Canada and USA is MFN - 7118.90.10 FREE

GOLD BULLION: Over 99.95% is 7108.12.11 ..... Under 99.95% is 7108.12.21 BOTH FREE

SILVER over 92.5% is 7106.91.11  under 92.5% is 7106.91.29 FREE

 

This is all from Section 14 of Customs Tariff Schedule

Please use a broker to confirm these numbers are current. Anyway is all free and there is no GST apparently

Mon, 01/17/2011 - 15:14 | Link to Comment BGO
BGO's picture

If you have $$$, there are better deals than .5% over spot right here in the

good ol' US of A.

 

.9999 gold bullion @ .25% over spot all day long.

Mon, 01/17/2011 - 15:18 | Link to Comment What_Me_Worry
What_Me_Worry's picture

As coins or bars?

Mon, 01/17/2011 - 16:05 | Link to Comment BGO
BGO's picture

Coins for sure. Bars, probably.

Mon, 01/17/2011 - 17:15 | Link to Comment blindman
blindman's picture

link?  if you would be so kind sir.

Mon, 01/17/2011 - 21:10 | Link to Comment BGO
BGO's picture

post an email address and I'll send you a link... or you can send email to me... proedit@gmail.com

Mon, 01/17/2011 - 15:50 | Link to Comment ThisIsBob
ThisIsBob's picture

Even if not a super bargain,  seems to me that one ought to have coins of the country where one anticipates they will be sold or traded.  "Coin of the relam," and all that.

Going to be a lot more comfortable trading ammo for eagles  than for bears.

Small, portble, inexpensive devices which could quickly and accdurately test for weight and purity of something that had "GOLD" stamped on it would be handy.

Mon, 01/17/2011 - 15:35 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Just as long as you are bringing that gold in to the U.S. If you are taking it out they will find it before they even get to squeeze your junk. Aren't there tariffs on this sort of thing? Your are supposed to declare certain values on what you bring back or you get a smuggling charge. Plus they only let you leave with 10k in cash if I'm not mistaken which means you would have to pay an additional premium of 3% to the Hong Kong bank if you use a credit card. I don't have deep enough pockets to work this scam out but I'm sure some people are doing it. At least we know enough now to take enough $ when we go to Hong Kong to get a gold panda.

Mon, 01/17/2011 - 21:30 | Link to Comment Botox4U2
Botox4U2's picture

Aren't there tariffs on this sort of thing?

 

No as long as you declare it you can take any dollar amount of bullion out of the country. A friend of mine just flew from Vancouver via Salt Lake to Bucharest with about 90,000.00 in gold bullion...no hassle...just declare it

Mon, 01/17/2011 - 15:47 | Link to Comment Gunther
Gunther's picture

Something does not make sense:
Simon black states that Maple Leafs sell in HK for less premium over spot then minting costs (and cheaper then in Canada??) and Harvey Organ states that in Shanghai gold bullion trades at a premium of some 23 $ over spot.
scroll about 2/3 down:
http://harveyorgan.blogspot.com/2011/01/massive-raid-on-silver-and.html

Mon, 01/17/2011 - 21:32 | Link to Comment Botox4U2
Botox4U2's picture

Simon black states that Maple Leafs sell in HK for less premium over spot then minting costs (and cheaper then in Canada??)

 

These are fakes, beware. Either that or the seller is an idiot for losing money but hey it takes all types.  DON'T DEAL WITH CHINA is my opinion.

Mon, 01/17/2011 - 15:54 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

 Shit. It's the silver pandas they get you on. They want almost 35% above spot for those. I just checked and you can get any quantity of gold panda at APMEX for less $59.99 over spot right now. This is the same price as their gold eagles. I had to order a few different silver pandas last week just to see what everyone is talking about. Haven't seen them yet but there is no way at this price they can replace my work horse- The Maple.  

Mon, 01/17/2011 - 16:07 | Link to Comment tradewithdave
tradewithdave's picture

Those pandas are cute.  Sure seems like the idea of a "people's republic" is really catching on.  Check out today's blog post on how you too can jump on the red wagon that's rollin' into town this week.  Just imagine tellin' the grandkids about how you came to buy those coins when they stop by to check on you when your working as a greeter at Wal-Mart.  You can buy them a Slurpee and a pretzel and show them what a U.S. dollar used to look like cause you kept an old one folded up in your wallet: http://tradewithdave.com/?p=4872

 

Mon, 01/17/2011 - 16:18 | Link to Comment Eric The Red
Eric The Red's picture

Sorry, I wouldn't trust any Chinese coin.  Lots of other choices out there.

Mon, 01/17/2011 - 21:38 | Link to Comment Botox4U2
Botox4U2's picture

Images of Chinese Fake Coins or Bullion Bars on Ebay

http://www.china-mint.info/fake-coin-images.html

Mon, 01/17/2011 - 16:22 | Link to Comment Spigot
Spigot's picture

Yes, gold plated tungsten coins usually sell at a discount. Caveat Emptor.

Mon, 01/17/2011 - 19:35 | Link to Comment Drater
Drater's picture

suppled by Ft. Knox?

Mon, 01/17/2011 - 17:01 | Link to Comment Matto
Matto's picture

I am curious about the business models of PM & coin dealers:

 

Do they purchase their coins directly from the mints around the world or are there wholesale distributors?

 

Where do they buy actual bullion, like silver bars etc?

 

It would seem their margins would be pretty slim if they have to pay above spot and then resell set slim percentage above that.

 

 

 

 

Mon, 01/17/2011 - 20:24 | Link to Comment DosZap
DosZap's picture

Matto,

Very few folks can buy from the US Mint direct at discount.

Most Dealers buy at a price a tad above spot,and then add their Premiums.

There are many Smelters/Dealers/Mfgrs, that make Gold and Silver, Pt,Pal, in coining bullion,bar form. A LOT.

Google it.

Many Dealers (and individuals can and buy direct).

You as an individual can but dierectly fromthe Perth Mint(the Western Aussis Gvt mint)/

 

Tue, 01/18/2011 - 05:19 | Link to Comment Matto
Matto's picture

Thanks Dos! Sounds like a fairly tricky business with constantly fluctuating spot prices and exchange rates to contend with and a sales price determined by the current (not purchase) spot price. 

Mon, 01/17/2011 - 17:20 | Link to Comment blindman
blindman's picture

@"Still, this situation can be exploited to your advantage-- the difference between the buy price in Hong Kong and the sell price in North America is roughly $275 per 1-ounce coin."

comment: this statement is false regarding common bullion transactions that do not

come with avoidable numismatic premiums.   gold eagle , on line, pay with credit

card , today $1461.  spot $1361.   those are the real numbers.  no 20%,

no $275 savings or profit here.  and the coin can be had for $1440 or less

at local dealers, walk in with cash, im pretty sure.  what is this, an ad for hong

kong?  

gold panda, online now, $1463. 1 oz gold. 

i don't get it.?

Mon, 01/17/2011 - 18:54 | Link to Comment BurningFuld
BurningFuld's picture

1 oz Olympic Gold 2009 Canadian Mint 9999 pure. Todays price $1403.00USD @ Kitco

Mon, 01/17/2011 - 20:16 | Link to Comment DosZap
DosZap's picture

Not legal tender..........

Mon, 01/17/2011 - 19:46 | Link to Comment Abe Froman the ...
Abe Froman the Sausage King's picture

Agree with Dr. Gonzo...no way the Totalitarian States of America will ever allow an arbitrage to be pursued...especially with their biggest competitor that is Gold. Any arbitrage they aren't monopolizing is illegal.

Mon, 01/17/2011 - 20:38 | Link to Comment Botox4U2
Botox4U2's picture

Lots of counterfeit coins come out of China so beware. I would never buy coins online from overseas. Weighing them is important and this can't be done remotely. If there is a 275.00 spread then this smells very fishy and I would avoid it.

Mon, 01/17/2011 - 21:27 | Link to Comment Temporalist
Temporalist's picture

 

The Tunisian job: How president's wife 'fled with $60m in gold bullion'

"Hang them all, but let's get our gold back first," shouted a group marching along Avenue Bourguiba.

http://www.independent.co.uk/news/world/africa/the-tunisian-job-how-pres...

Tue, 01/18/2011 - 00:21 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Gold and silver charts bearish warning continues.

http://stockmarket618.wordpress.com

Tue, 01/18/2011 - 03:38 | Link to Comment redpill
redpill's picture

I don't understand how anyone would subject any substantial quantity of real money to the review of the TSA thuggery, or at the very least letting the Feds know you have it. Kind of goes against the entire purpose.

Fri, 01/21/2011 - 22:02 | Link to Comment savara
savara's picture

No, in India VAT on gold and silver is only 1%

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