Gold News

Gold Coins: 6% In, 1.5% Out

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...

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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