[IceAIM]

I bought a 1 ounce gold american eagle coin from Heng Sang bank. Just wondering. Is it possible to sell this coin with ease at or near the market rate of gold? If so, where?

[RastaMan]

Originally Posted by IceAIM

I bought a 1 ounce gold american eagle coin from Heng Sang bank. Just wondering. Is it possible to sell this coin with ease at or near the market rate of gold? If so, where?

You mean you bought the coin itself? Not a very smart move.

[goodkarma]

Rastaman !! Don't post and run, can you explain for we mortals??

[HK_Newbie100]

You?ll probably get about 97% of spot price if you want to sell at any bullion dealer and they?ll buy it off you there and then, but why sell? You should not only keep it, but buy more, much more, like a kid in a candy store. If you buy just the odd one or two, you?ll pay a hefty premium over spot, something like 12%, but if you buy in bulk, that?ll drop to 4 or 5%, making it an excellent investment. Imo, gold (and silver) is one of the best investments in the world right now and should be the centrepiece of any portfolio.

Have you noticed the dollar plunge over the last few days while gold is shooting up? Ride the trend, and it?s going to be a very long trend indeed. The dollar is as good as dead while gold is about to go to the moon over the coming years.

[RastaMan]

HK_Newbie is the agent for Mr. Goldfinger.

goodkarma, you shouldn't buy the gold itself. You can go to the bank and open a gold account (or whatever it's called) and when you buy-sell you only have a difference of 0.01% or something.

If you sell the coin (even at the same bank where you bought it) they say that the coin is scratched, and they give you less than its value. Basically, they say that you have scratched the gold to remove a few 100000th of a gram. So every time you sell gold they try to cheat you. At least this is what happened to me (in Europe).

Anyway, to answer IceAIM's question: where to sell the gold? Well... where you bought it. Duh!

[climber07]

Originally Posted by RastaMan

HK_Newbie is the agent for Mr. Goldfinger.

Agreed. Newbie, it's usually ill advised to offer your opinion on a market when none was asked for. While it's true that dollar has been extremely weak, there is no proof that GOLD will go through the roof. Having said that, personally I feel that the market has been kind to me as I entered the market in late-2001 back when gold was still at $275USD/oz. At these prices, I would not advise to purchase physical gold (i.e. Bullion Bars &Coins) as the profits would be marginal unless you go for size (Once again if you're doing physical, keep in mind gold is heavy).

Originally Posted by RastaMan

If you sell the coin (even at the same bank where you bought it) they say that the coin is scratched, and they give you less than its value. Basically, they say that you have scratched the gold to remove a few 100000th of a gram. So every time you sell gold they try to cheat you. At least this is what happened to me (in Europe).

RastaMan, No reputable bullion dealer will ever argue over a scratch to a coin or bar (depending of course if a visibly huge chunk is missing). That is possibly the most ridiculous thing I've ever heard, and I've traded quite a bit of physical gold (I think you went to a shady place ). Bullion coins as a rule of thumb hold no numismatic value and as long as the weight of gold is consistent with the stated amount on the coin, it should be purchased back at close to last spot close.

Originally Posted by RastaMan

Anyway, to answer IceAIM's question: where to sell the gold? Well... where you bought it. Duh!

Another good point. Ultimately, in Hong Kong it seems that Banks are the primary bullion dealers. However the "demand" varies greatly from place to place and prices offered will also have some variance from 1-4%. To buy the gold back, Banks will offer between 96% - 99% of spot close. Go to Central and walk along Des Vouex Road and walk into the banks (especially the smaller, non-chain guys). Talk to their precious metals desk and see what they say.

Remember when I spoke about "demand,? many banks like Bank of China or Standard Chartered will not want to buy American Eagles. The most liquid bullion coins in Hong Kong are actually Canadian Maple Leafs and Chinese Panda. Majority of the banks will not even buy Swiss bars (with official certificates). Because there is simply no demand for these. That is the reason why one gold coin can bring in slightly more $$ than another. The currency under which its issued (representative of the stability of Government and additional currency backing of the coin, i.e. American Eagle is worth $50USD even if price of Gold goes to $0) and gold alloy additive (some countries use copper, some aluminum, hence different colored gold). These differences in "regional demand" will greatly effect both liquidity and the "premium" (Price over spot) for some of these coins. However, note that most of the time, the premium will only be paid by you (when making a purchase), it?s rarely a factor at a time of sale )

[RastaMan]

>>> That is possibly the most ridiculous thing I've ever heard, and I've traded quite a bit of physical gold (I think you went to a shady place ).

I agree it's ridiculous to pay me less because of a scratch! I didn't even scratch the coins! They do it to cheat the customers. I guess I was young and they thought they can easily cheat me. Or then they thought I would scratch the coin because I was young. Whatever. But it was a very reputable bank, government owned and such! What a joke!

>>> gold alloy additive (some countries use copper, some aluminum, hence different colored gold).

Why don't they have 100% gold? And what is the percentage of the additive?

You didnt mention my advise: Open a gold account and trade gold there. Why would you buy the physical stuff? I don't see any advantage, unless you like it so much you want to look at it all the time...

[climber07]

Originally Posted by RastaMan

Why don't they have 100% gold? And what is the percentage of the additive?

You didnt mention my advise: Open a gold account and trade gold there. Why would you buy the physical stuff? I don't see any advantage, unless you like it so much you want to look at it all the time...

The 100% Gold is too soft to hold its shape in a solid form. Hence an additive is added to solidify and add hardness to gold . Most bullion is .9999 pure so 1/10000 is an alloy additive for stability and color. US, Canada and Asia mainly use Aluminum additive and hence the color of the gold is lighter commongly refferred to as "yellow gold". Formes Soviet Union (now Russia) and India and Middle East used copper as a hardness alloy and thus the gold turned a bit darker and redder and it became known as "Rose Gold" or "Pink Gold" as is has a lightly reddish tint to it.

Also, the carats of the gold in Jewelry is actually what represents the actual "gold" content. 24 Carat cosidered to be most pure (.9999) however mostly too soft for majority of every day jewelry. 10k Gold is probably the strongest as majority of the alloy is actually something other than gold (but its good for jewelry which has lots of wear and tear) such as rings. As a Matter of Fact White Gold is made by mixing (usually Gold with Palladium), but it can be a comination of other metals (Silver, Platinum, even Nickel, etc.). The quality and price of gold is often dependent on what allow is used in the mix.

As far as your suggestion of trading gold via account vs. physical. In my opinion, a speculative trader should always stick with account (non-physical delivery) trading as its as the most effective. However, the benefit of physical (besides looking at it, if you will), is the World-Wide liquidity of bullion. Gold is untracable, can be melted down and made into anything you want, accepted in every country in the world....and the best part...if you have patience (getting to a local bank), its a great way of beating the foreign exchange rates. If you want to get a few thousand bucks but don't want to bring cash....take two or three maple leafs in your pocket and you avoid the FX fluctuations.... You just rely on spot....(Which lately isn;t such a bad thing )