Buying precious metals is not something you do on a daily basis and it can be confusing to know what an investor should buy when it comes to gold and silver in a world full of advertisements. Below are the most important points to determine which product(s) are the best choice for you.
The first thing to look at when you want to buy gold is that you can easily sell it. It is important that the precious metal can be traded worldwide with high quality, purity and liquidity, or investment grade. When buying bars, many investors therefore look at LBMA-accredited bars and for coins, sovereign coins, which means they are produced by a government currency.
Only gold and silver bars from accredited refineries that meet Good Delivery standards are acceptable when settling a 'Loco London' contract. On the Loco London Market, precious metals are traded directly between two parties, without the intervention of an exchange. This system relies on the fact that all bars have exactly the same specifications.
The London Bullion Market Association (LBMA) is the independent regulator and manages the list of parties on the Good Delivery lists for both gold and silver. The requirements of a Good Delivery bar are in terms of fine weight, purity, physical appearance. In addition, there are also strict requirements for the financial capacity of the refinery and the refineries must comply with the Responsible Gold and/or Responsible Silver guidelines. The requirements of the Responsible Sourcing programme and the LBMA Good Delivery Rules for the way in which the bars are produced are becoming increasingly important.
The Good Delivery bars, or LBMA certified bars, are the standard in the market. Holland Gold only sells LBMA bars for producers such as C.Hafner, Archor-Heraeus, Valcambi and Umicore. Central banks and institutional investors also buy only Good Delivery bars.
There is a difference between casted, minted gold bars and a CombiBar (fractional bars).
Casted gold bars are the result of a simple authentic production process in which molten gold is poured into a preformed mold. Because the mold is removed after the gold has solidified, these cast gold bars often have a rougher and less detailed appearance.
Unlike cast bars, minted gold bars are the result of a more sophisticated production process. These bars are manufactured by cutting gold from a roll and then pressing or stamping it, similar to minting a coin. This leads to a gold bar with a sleeker, more refined finish, often accented with detailed etchings. Despite the difference in production process and external shape, there is no difference in value between the two gold bars.
A CombiBar (fractional bar) is one of a kind. A CombiBar is a modern innovation in which a larger gold bar is divided into smaller pieces that can be broken off on pre-cut lines - similar to a chocolate bar. These bars have a refined and detailed appearance, and no tools are required for breakdown. Compared to the casted bar and the minted bar, the CombiBar is more expensive. However, the divisibility is of added value and can be used in emergency situations as a means of payment. Compared to the smallest weight units of traditional bars and coins, the CombiBar is an economical choice.
Currencies that best meet the various criteria are what we call sovereign currencies, i.e. a government currency. Sovereign coins come with a guarantee of content and purity, and in most cases, a face value. The face value is usually symbolic at this point, as the Gold price much higher than the value printed on the coin. One advantage of sovereign currencies over non-sovereign coins is that they are legal tender.
Because the best-known sovereign coins are widely traded, they are immediately the most liquid coins in the world. Any trader in the world will recognize them and buy them from you without any doubt. Examples include the Maple Leaf, Britannia, Kangaroo, Philharmoniker, Krugerrand, and the American Eagle.
The most popular gold coins in the world are listed below. All gold coins contain 31.10 grams (1 troy ounce) of gold. In addition to 31.10 grams of gold, some coins have other metals added, such as copper. You can recognize these coins by their purity. A coin that contains 100% gold is called 24-carat, and coins that have other contents, such as 22-carats, also contain other metals.
Examples include the Krugerrand and the American Eagle.
For a number of coins, you can choose "various years" or newly minted copies. The various years are all years except for the year in which we live (or at the beginning of the calendar year the previous year).
Coins from previous years are often an economical choice. These coins are purchased from private sellers or institutional investors where the production margin is eliminated and logistics costs are lower. This makes it possible to offer the coin at a lower price. The conditions and prices for resale to Holland Gold are the same for each coin.
What about rare gold coins? Numismatics can be a fun hobby and provides a collector with beautiful artifacts that represent interesting people or historical periods. Unfortunately, many novice investors have lost money on this collector's market because the intrinsic value (value of the metal) is a lot lower than what is paid for the coin, or collector's value is disappointing.
Of course, there are exceptions, but as a rule, investment coins are minted in large numbers, so no collector's value can reasonably be expected.
During consultations, we are often asked whether it is better to buy gold bars or coins. It doesn't really matter much, since gold is just gold at the end of the day. Investment gold is exempt from VAT and unlike silver, you can't make any mistakes with it.
When purchasing your precious metal, it is important that you take into account the production costs and other premiums that are passed on in the price. For gold, the greater the gold weight, the more advantageous the premium. Large bars are cheaper per gram than smaller bars. This also applies to the well-known gold investment coins.
As a rule, gold bars are cheaper than gold coins when purchased, given the price per gram. But beware, gold coins are generally bought back by us at a higher price, so there is virtually no difference.
Below are some guidelines to help you decide which mix is best for your situation:
In contrast to gold, the choice of bars or coins for silver is more important because of VAT. Silver is an industrial metal as opposed to gold, which is categorized as a monetary metal. As a result, 21% VAT is charged on silver bars. As is the case for all other "white" precious metals such as platinum, palladium and rhodium. It is therefore better for private individuals to purchase silver coins: silver coins fall under the margin scheme in the Netherlands. In the margin scheme, the trader does not calculate the VAT on the turnover, but on the difference between the selling price and the purchase price of the goods: the (profit) margin. As a result, a lot less VAT is paid for silver coins. It can only be interesting for business customers to buy silver bars because in some cases they can reclaim the VAT.
The most advantageous for both private and business customers is to purchase silver bars or platinum bars in combination with storage outside the EU, such as in Switzerland or Singapore. Because these bars are in a customs depot, no tax is levied on them. These bars are therefore VAT-free!
You get the most silver for your money by buying a 1000 troy ounce bar in combination with insured storage in Switzerland or Singapore.
Do you have questions about which products might be most interesting based on your budget? Please contact us by phone
Bars and coins come in a variety of sizes and weights.
In general, the greater the weight, the lower the relative premium.
The premium is the difference between the purchase price and the 'paper' precious metal price, also known as the spot price. This premium consists of:
The greater the weight, the less the above costs weigh on the product. For example, it costs almost as much to produce a one-ounce gold bar as a one-kilo gold bar.
But that doesn't mean you should buy the heaviest bar you can afford, because...
Holland Gold sells only Good Delivery bars and coins from licensed refineries and leading mints. As a rule, you can therefore choose the cheapest brand. After all, you will receive the most gold for your money and it also makes no difference when sold (back). However, it is possible that you have a bar that you like better for a (small) extra cost – that is of course possible. It is possible that we do not have a certain product or the quantities you want in stock and that you wish to complete your transaction quickly. Even then you can opt for alternatives that are slightly more expensive but immediately in stock
The bars are easily recognizable by an LBMA Good Delivery quality mark and the refinery's stamp. Coins have a sign of the mint in question and sometimes additional security features. For example, the Canadian has a small symbol of the 'maple leaf' that can be read digitally.
You can mint gold coins for tax purposes: A (gold) coin collection (think of various years Krugerrand coins or gold titheJES) is exempt in box 3 and provides you with an annual tax saving, provided that this collection is not mainly (i.e. 70% or more) held for investment. Here, the inspector has the (virtually impossible) burden of proof. Spread your collection over various types and/or vintages. Any profit to be made from the sale of your collection is tax-free.
Probably not, but if you don't have any bullion at all, you're not insured. When making a first purchase, timing is therefore less important than the 'must' to own precious metal.
You can then spread subsequent purchases over time or buy them in a dip.
We recommend buying both gold and silver, and maybe even platinum and palladium.
Gold is mostly monetary in nature. It is not for nothing that gold is in the vaults of central banks. Silver is seen as 'poor man's gold' and largely moves in line with the gold price. On average, customers of Holland Gold buy 75% gold and 25% silver. Despite the high chances of silver, we recommend including at least 50% gold in the distribution – gold has the strongest monetary properties. This ratio provides a stable foundation in the 'yellow metal' combined with silver's strong upside potential.
The growing shortage of silver offers opportunities. After years of falling silver prices, we can look up again. In particular, additional demand as a result of the energy transition may cause a renewed price jump. Investors in silver look back on ten lean years, but a turnaround seems imminent. For years, silver mines produced more than was needed, with a depressing effect on the price of the precious metal. Roughly 50% of the demand for silver comes from industry, especially for applications in solar panels and electric cars. Due to the energy transition, this demand is rising rapidly and it is expected that this will continue in the coming years. Research from the University of New South Wales states that by 2027, 20% of the total annual supply of silver will be needed for the production of solar panels. The increased demand will not be able to be met quickly with more production of silver. It takes years for a new silver mine to be active or for an existing silver mine to increase production. All indications are that we are going to face a fundamental deficit. In the meantime, several market parties have stopped making silver bars, because they need all their silver to meet the demand of their industrial customers.
Gold and silver have been precious and monetary metals for millennia, with the ratio of gold to silver being measured since the time of ancient Rome. The gold-silver ratio is calculated by dividing the price of gold by the price of silver. The development of this ratio in history tells us how 'expensive' or how 'cheap' one precious metal is compared to another at any given time. Silver hasn't been this cheap compared to gold for 25 years.
Historically, the ratio of gold to silver played an important role in ensuring that coins had their correct value, and it remains an important technical indicator for investors in silver today.
The higher the ratio is above 1:80, the more favorable the entry point (either sell gold and buy silver), since the highs of the ratio are equal to the absolute bottoms of the Silver price. However, precise timing is impossible. As long as the entry point takes place from the 1:80 ratio, you as an investor are virtually guaranteed a 'better' return in the long term. For the experienced silver investor, this is a crucial level to find a strong buy signal for a long-term investment in silver.
In recent years, the decision to invest in precious metals has almost always been followed by the gold and silver options. However, platinum and palladium are also promising alternatives for diversifying the investment portfolio. In conclusion, in addition to increasing the diversification of your portfolio, research has shown that investing in platinum and palladium is a wise choice, as both metals have been shown to retain their economic value over time. Unlike gold, which is often affected by my market fluctuations, the white metals have so far offered admirable resistance to declines in the precious metals market, likely due to their higher industrial value.
Platinum and palladium are used by the automotive industry to make catalytic converters for vehicles due to their unique properties. Platinum is also used in jewelry. Many analysts believe that platinum is gradually replacing palladium in the industrial sector due to its lower cost and ability to play much the same role as palladium. Also, dentistry and electronics are two other major sources of demand for palladium and platinum.
Despite platinum and palladium being available in as many forms as gold and silver, platinum and palladium are available in significantly fewer quantities, making their prices more volatile and thus less attractive to casual investors. Said to be rarer than gold, it is believed that the sum of all mined platinum will barely fill an average living room. Despite this, platinum is believed to be about fifteen times rarer than Palladium, yet cheaper, which gives more reason for the fight over it. As one of the rarest metals on earth, it has been reported that the majority (about 80%) of palladium is controlled by Russia and South Africa, placing it in the category of rare metals and therefore giving it above-average volatility.
The premiums on platinum and palladium products are relatively high. If you have high expectations specifically for platinum and palladium, it is interesting to buy these metals.
Disclaimer
This starter guide has been compiled with the greatest care. No rights can be derived from any inaccuracies. {{P3}} does not accept any liability for any inaccuracies and/or omissions in the content of the starter guide. In this guide, we invite you to find out more about buying precious metals. We do not provide financial or tax advice.
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