A Renaissance for Physical Gold In London

Sharps office.jpg

Sharps Pixley at 54 St James’s Street

Gold continues to perform as the leading commodity and indeed asset class of 2016 with a gain of 15% year-to-date in US dollar terms, but a whopping 23% in sterling terms. Of course speculative flows have helped as has record Central Bank buying, driven by safe haven demand as both the macro environment and the geopolitical outlook continues to darken.

It follows though that the biggest beneficiary has been the demand for the yellow metal itself rather than a paper or derivative proxy for it. Trust is in serious deficit in the markets just now. The rally in GBP gold prices might normally be detrimental to physical demand (the best buying is on price dips) but London really is seeing a renaissance in physical bullion demand as investors rush for safety.

For investors looking to enter the market one needs to look not only at the premium on buying coins and bars but also the selling price one might achieve upon exit from the trade – the bid/offer spread if you like. It throws up some surprises.

Sharps Gold bar.jpg

Why SharpsPixley?
A kilo of gold of 99.99% purity is roughly the size of an iphone and costs about £28,000. At close of business on Friday buying one of these bad boys comes at a premium of 1.7% over spot from Sharps Pixley, 2.4% from BullionByPost, 2,4% from the Royal Mint and 2.7% from ATS Bullion. However, if you factor in the price you get on selling your investment the difference is significantly bigger. The Royal Mint will not buy back any bars (or coins for that matter if you take them away), and BullionByPost comes in at a figure of 2% below spot while Sharps Pixley are tightly priced at just 1% below spot, making them the clear winner at roughly half the cost of nearest rivals on the full spread. So much for online bargains!

If the cost of storing your physical bullion concerns you then safe deposit boxes start at £250 per annum from Sharps Pixley and they have the advantage of being independent and outside of the banking system for those so minded. Finally, Sharps Pixley are not only offering the best buy backs, they even have onsite facilities to test the bullion to confirm its authenticity or assay.

Unlike other gold sellers, Sharps Pixley have in our showroom gold testing facilities that enable us to authenticate (or assay) what it is you are buying or indeed selling and the process takes only a few minutes. Given that physical gold buyers are often motivated by a lack of trust, this option cannot be overstated. It’s all in the name of making gold accessible and visible – or democratizing gold if you like!

sharps assaying machine.jpg

Alternative Forms of Investment
Coins remain a good option for investors and of course investment gold in the UK comes without duty or VAT – and in the case of Sovereigns and Britannia’s they have the additional benefit of being CGT free too. Current prices have the 2016 Britannia’s priced at Sharps Pixley at £919, BullionByPost at £939, ATS Bullion at £944 and the Royal Mint at £948 (but again they will not buy them back).

Trickle-Down Benefits
As part of a group which is said to be Europe’s largest physical gold and bar sellers, Sharps Pixley are clearly able to pass on the economies of scale that come from size and from having its own refinery.

Risk Disclaimer

This newsletter is prepared for general circulation and is intended for general informational purposes only, and is not tailored to the specific investment objectives, financial situation or needs of any specific person or entity who may receive access to this particular newsletter. Potential investors or traders should receive independent financial advice regarding the appropriateness of investing or trading in any investment or related strategy discussed in this newsletter.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s