Looking to invest in gold coins like the South African Krugerrand today...?
THIS SNIPPET from Alvin Hall's new World of Money show on BBC's Radio Four puts him inside a leading UK gold coin retailer in London.
Hall asks about which coins gold investors using the gold shop like to buy, and how much they can expect to pay – both to buy and then to sell...
"Most people who come in tend to buy Krugerrand Gold Coins, they contain one ounce of pure gold."
Now the price of gold is around £430, notes Hall. "Would I pay £430 to buy one of these Krugerrands?" he asks.
"Unfortunately not. Obviously there's a premium over the Gold Price. Something like the Krugerrand at the moment, you're probably going to pay a premium of 6% over the spot price."
"And if I wanted to sell it? Would I get close to the price of gold?"
"Yes, you do surprisingly enough. At the moment you get about 1.5% below the spot price, so around £6 below the spot price."
"But that's interesting that buying gold costs more than selling. Why?"
"Well obviously we have to make a profit. There's always a profit margin, there's a spread between the buying price and the selling price whatever you're buying be it gold coins or bars."
You can learn more about the South African Gold Krugerrand here...