Bullion or coins?

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#1 Thu, Feb 13, 2014 - 12:59am
hopeful
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Bullion or coins?

Wondering whether to buy more physical gold in bullion form or coin form?

There seem to be proponents for both, but in many cases their reasons are unclear.

Edited by: hopeful on Nov 8, 2014 - 5:30am
Thu, Feb 13, 2014 - 3:41am
hopeful
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Sydney NSW
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Bullion or coins?

Wondering whether to buy more physical gold in bullion form or coin form?

There seem to be proponents for both, but in many cases their reasons are unclear.

Can anyone give me some guidance as to the pros and cons of each?

Thanks

Sat, Feb 15, 2014 - 10:10pm
Lamenting Laverne
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Good question

My reasons are a bit fuzzy, but I want to hold small sizes, so I am only interested in bullion coins. No numismatics and no bars. I have decided that the establishment in Europe is pro-gold under the surface, so I am going only with official mint coins and only 0.999 purity - but from different countries, where the coins are legal tender with amounts printed on them. Not that the amounts themselves matter. This is the reason I do not buy small bars. I still have a little trust left that the official mints will deliver the real goods, and that tubes straight from the mint are likely not to be fakes. (Although checking is better than trust ;-)

There have been special rules in place in Europe for many years that exempt Gold bullion coins with high purity from VAT, which means that they are not regarded as a commodity by the establishment. If they one day move to be bothersome by for example using the face amount instead of value, I will simply not sell. I just do not think that will ever happen. The worst we will see in Europe in my opinion is the prospects of very onerous taxation of capital gains. Which can be bad enough, of course.

So for me it is primarily 1 oz Maples and Phills. I hope that answers a bit of your question. 

Fri, Feb 21, 2014 - 6:57am
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I take account of the brand

I take account of the brand image which a well known (usually national mint) coin has, which acts as a perceived quality standard among the wider mass of people. So for example an American Silver Eagle or Austrian Philharmonic or Maple Leaf or similar are more quickly recognized and I would hope more easily sold than a bar when a wish to sell arises.

It seems to me that the greatest advantage of bars is obtained while they are within the sealed bullion market system, as for example while held within an LBMA vault, where their assay is uncontaminated, and that affects the ease of sale at some future point. Privately held bars on the other hand are less certain in provenance, and this could matter more or less at a future time.

Maybe if I owned more precious metal I might find the larger bars properties more attractive.

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