Update, 12:03 AM, 1 Oct 2011
The widget NOW shows a 25% premium of physical to spot in gold, but a HUGE 86% in silver! Maybe it's one of those anomalies that happen over there at eBay...
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Many of you now that I have been trying to find a way to keep track of actual physical gold prices vs. the spot gold quotations from the COMEX. There are two relatively easy ways to do this:
1) Call the coin shops or check with the gold sellers (Tulving, APMEX, Gainesville, etc.)
and
2) Monitor the 24hgold / eBay widget (found at 24hgold.com, at the bottom of the home page).
Since I check the price of gold at least once a day at 24hgold, I often take the time to check the widget, which tells us the premium of the US Gold Eagle offered at eBay vs. the spot price. The "widget" price is always higher than spot (as it should be, as the Eagle has some 3% silver and 5% copper to make the coin resist scratches, that of course is over and beyond the 1 troy oz of gold).
For sometime now I have been monitoring this, and occasion comment on it both here and at Zero Hedge when I see something interesting. Well, I think that the widget HAS been interesting since the Big Plunge in gold prices starting about 10 days ago.
I just checked the widget, the eBay price is an impressive 25% over spot, the highest I have ever seen! The Silver Eagle eBay premium is a very high 42% as well. During the past several days, I have seen the widget showing at least 11% over spot (and up to 20%), which is higher than the normal 5% - 9% which is the great majority of premiums I have seen in the past.
FOFOA teaches us that the "paper price" (COMEX) of gold may very well go down (as physical buyers cannot get the physical so the paper becomes worth less -- oversimplifying) yet the actual, real price of physical goes up.
I am NOT announcing that FOFOA's ideas are about to happen, but the widget, imperfect as it is (and several people have let me know that eBay is a playground for thieves too, although others have told me they buy & sell there regularly with few / no problems) MAY show an increasing scarcity of physical gold for retail buyers (we "shrimps") like us.
I saw NO evident shortage when I bought recently, although the two coin shops I buy from typically have NO 2011 or even 2010 Gold Eagles (my preferred gold investment).
What say you? Reader "Jonny Bahrain" a few days ago told us that there were shortages of retail bullion product there in Manama, Bahrain. Please comment or let me know if YOU see any shortages or have similar observations. If I hear something, I will say something! (thanks Madame Secretary Napolitano!).
I have at last persuaded the OH to put her unwanted cash into gold. Here in the UK gold bullion is VAT-free, and sovereigns, being legal tender (worth 250 x face value...) are CGT-free as well.
ReplyDeleteBuying most things here other than food, books and children's clothes means paying VAT @ 20%, and that includes silver.
If I buy silver from America, outside the EU, I have to pay 20% VAT. Import duties kick in if you buy many hundreds of pounds worth at a time, but VAT applies, in theory, to any import.
Last year we were in the USA, I have inlaws in Concord, CA, and did a big tour from San Francisco to LA - Grand Canyon - Las Vegas - Sequoia - Yosemite - Lake Tahoe (they own a cabin/cottage there) - back to SF. We saw a gold mine, bought gold pans, panned for gold and I bought around 50 oz silver at various places at <$20 an ounce.
Santa Barbara was one of our stops. It was perhaps my favourite town we went to because it had a proper high street with real shops, and one of them sold sterling silver jewellery dirt cheap like $5 per ring.
This year I found the shop again on Google streetview and worked out from the shop-front where they get their stock from... I think anyway. it's www.silversource.com so I bought a pile of jewellery off them at less than 2x spot which I thought was fair what with the manufacturing costs for such small stuff. I didn't pay any tax when I picked up the package from the sorting office.
To buy silver coins I used to use www.sarniasilver.com and www.cisilver.com who have suspiciously similar addresses in Guernsey. The Channel Islands are NOT in the UK, and also not in the EU, so don't have VAT. The Queen of England (and Canada) is incidentally also the Duke of Normandy for some 945-year old reason, so the Channel Islands are the last bits of France that England is in charge of.
The tax rules the UK has with the Channel Islands are that if you buy something for £18 or less from the Channel Islands you pay no VAT. That is good, so Amazon.co.uk operates from there. Books are VAT-free anyway but CD's and DVD's aren't and they only cost £10 - £15 so all our stuff from Amazon gets sent from Jersey.
This is viewed as 'unfair' by English retailers so the government has decided to reduce the £18 threshold to £15, which frankly will only affect a few dvd box sets or brand new video games.
This meant that whilst silver was still cheap enough to buy for <£18 including p&p and Sarnia's premium it was worth buying, but no longer.
I still buy occasional half ounces from them, but the premiums now seem to suck - £16 or £17 for a half ounce = like $50 an ounce.
...
Anyway, back to the original point, are there shortages here?
We don't have as many bullion dealers here as you lot in North America do. In my town we have a branch of Spink's, they charge 10% over and offer 10% under spot for bullion. Buying from them seems OK but I think I can sell to www.coininvestdirect.com for a better price, but I have never wanted to sell.
Spink's have a huge amount of numismatic stuff, but there is a tray of bullion, maybe 24 coins, mostly Sovs, half sovs and krugerrands, but occasionally there are 1/10 krugs, quarter sovs (tiny weeny things), and last time I looked there was a 1/3 guinea and some American looking coin.
We were there last weekend; despite the fact that the bullion tray was full of coins, we were told that all of them had been sold. This was disappointing, seeing as I had just persuaded OH to buy gold, but because I must have been a regular-enough customer OH was offered a proof sovereign at bullion price (the 1980's ones are stunning) I bought a 1/10 krug from the tray that was allegedly sold.
I'll go back tomorrow and see what they have, seeing as the prices are pretty much the same this weekend. I want that 1/3 guinea if it's still there.
Thank you richard (upside down and mirror image, very impressive, you should show me how to do that some day...! dochenrollingbearing@gmail.com) for the on the ground comment from the UK.
ReplyDeleteOK, re your comments, I found that the comparative info you provided to be of great interest. And, wow, your retailer Spink's makes a NICE spread (20%), maybe I should set up shop there... Gold Eagles here in the USA typically (until say a week or so ago) were SOLD at some 5% - 9% over spot, and you could sell them back to the coin stores for about 1% OVER spot (so a narrow plus or minus 6% spread).
At this point, it sounds like you should just buy almost anything that is left, sounds like you have a "kind of" shortage. Of course, FOFOA would say there never really is a shortage (except during the Quantum Leap) because at a high enough price there is always gold available.
Presuming "OH" means "the better half", then that is great you have her along for the ride. My wife is kind dubious about buying all the gold, but she accepts it.
Great comment! Thanks for coming by!
E bay is the best way to purchase gold.Gold has been advancing for over 10 years now, from a low of $252 per ounce in 1999 to where it sits today at $1,755, which is a gain of over 595%. With gold at unprecedented levels (previous bull market high was $850/oz) is it any wonder why someone would question starting to acquire gold?
ReplyDeletegold coins