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Lower Spreads Versus Greater Divisibility: Which Do You Go For?
Posted: Tue Oct 11, 2022 4:26 pm
by Smith1776
What's your guys' take on this one.
What kind of gold coins do the forum members buy here? 1 ounce coins? These have low spreads that allow you to have more gold per dollar. On the other hand, you give up divisibility in the case where you actually needed to use them for something. The reverse is obviously true for smaller denominations.
I typically bias towards 1/4 ounce or even 1/10 ounce, but thinking of buying larger denominations now to get more for my dollar.
Re: Lower Spreads Versus Greater Divisibility: Which Do You Go For?
Posted: Tue Oct 11, 2022 5:12 pm
by Hal
Smith1776 wrote: ↑Tue Oct 11, 2022 4:26 pm
What kind of gold coins do the forum members buy here? 1 ounce coins? These have low spreads that allow you to have more gold per dollar. On the other hand, you give up divisibility in the case where you actually needed to use them for something. The reverse is obviously true for smaller denominations.
Retirement Fund: Gold Bars. Aim for each bar to be worth 1/10th of total gold allocation. Easy to rebalance, less spread.
Taxable: 1 Ounce coins held in non bank deposit box in country & overseas
Also 1 Ounce Silver coins held in home safe in case of SHTF (as per Rickards advice)
Re: Lower Spreads Versus Greater Divisibility: Which Do You Go For?
Posted: Wed Oct 12, 2022 8:24 am
by seajay
Paper gold (low spread gold funds), converted to physical gold after a good year (PP up +8%, physical gold coin spread 4%, convert paper gold to physical gold and count it as a +7% up year. That way it feels like 'other peoples money' covered the spread). For ongoing adjustments (rebalancing), add long or short paper gold positions to align actual physical gold holdings to the desired target weighting.
Legal tender 1 ounce coins preferred, no purchase tax, no capital gains tax. They also have a floor legal tender currency value, beneath which they could be spent as currency.
Re: Lower Spreads Versus Greater Divisibility: Which Do You Go For?
Posted: Sat Jan 28, 2023 11:05 pm
by ppnewbie
seajay wrote: ↑Wed Oct 12, 2022 8:24 am
Paper gold (low spread gold funds), converted to physical gold after a good year (PP up +8%, physical gold coin spread 4%, convert paper gold to physical gold and count it as a +7% up year. That way it feels like 'other peoples money' covered the spread). For ongoing adjustments (rebalancing), add long or short paper gold positions to align actual physical gold holdings to the desired target weighting.
Legal tender 1 ounce coins preferred, no purchase tax, no capital gains tax. They also have a floor legal tender currency value, beneath which they could be spent as currency.
Is there no capital gains on gold eagles?
Re: Lower Spreads Versus Greater Divisibility: Which Do You Go For?
Posted: Sat Jan 28, 2023 11:11 pm
by ppnewbie
If I can get a low premium I always prefer the smaller amount (1/4 or 1/10) but 1oz coins work as well. Also I love combibars. That’s the best of all worlds.
Re: Lower Spreads Versus Greater Divisibility: Which Do You Go For?
Posted: Sun Jan 29, 2023 5:20 am
by seajay
ppnewbie wrote: ↑Sat Jan 28, 2023 11:05 pm
seajay wrote: ↑Wed Oct 12, 2022 8:24 am
Paper gold (low spread gold funds), converted to physical gold after a good year (PP up +8%, physical gold coin spread 4%, convert paper gold to physical gold and count it as a +7% up year. That way it feels like 'other peoples money' covered the spread). For ongoing adjustments (rebalancing), add long or short paper gold positions to align actual physical gold holdings to the desired target weighting.
Legal tender 1 ounce coins preferred, no purchase tax, no capital gains tax. They also have a floor legal tender currency value, beneath which they could be spent as currency.
Is there no capital gains on gold eagles?
For a UK investors, only Britannia and Sovereign (British legal tender gold coins) are tax exempt. No different to how former copper penny coins incurred no capital gain tax if the price of copper had risen.
Recently, whilst some are indicating wide spreads, I note that Brtiannia's from my supplier are still at around spot+3.5% whilst my usual buyer is indicating spot+1% to sell to them (more usually spot+0.5%). That's for pre-orders to buy. Indicative of physical gold shortages or due to 2023 delays in producing coins with the Kings rather than Queens head.