How buy gold and other precious metals in bars and coins?
Instability in the financial market, sharp exchange rate fluctuations - the perfect time to raise the profile of the oldest tool of savings - precious metals.
What precious metals can you buy
Of silver, gold, platinum and palladium - metals, traditionally banking, the population, by and large, available the first two. Ingots of them can be seen with your own eyes and bought on request in almost all major banks. With platinum and palladium - a little harder. You will not find them in kind in Ukrainian financial institutions, and those customers who still want to buy these metals will most likely be offered a surrogate in the form of a so-called metal bill.
Bankers refer to the high cost of these metals, which is why they remain in low demand in our country as a means of saving.
What is the interest and where is the profit?
The main income to the owners of gold and other bank metals brings an increase in their price.
For example, the main factor influencing the change in the price of bank gold is its real value on the world market, adjusted for the hryvnia to the US dollar. A significant change in world prices has a significant impact on the official exchange rate for gold and, as a consequence, leads to a change in the price of bank gold ingots. However, the exchange rate of the national currency against the US dollar still plays a more significant role, as it is in US dollars that the value of the "yellow metal" on the international market is measured.
The process of investing in precious metals is quite specific, especially given the investment in bank bullion. One of the disadvantages is the significant difference between the cost of buying and selling bank ingots. However, given the fact that investing in gold means medium-term (3 to 5 years) and long-term (5 years) investment, this difference is covered by the rapid growth of assets, especially given the dynamics of the weakening national currency. In this regard, investing in gold is profitable in the medium and long term, especially in times of crisis.
What forms of metals are available for investment?
You can invest in precious metals:
- acquiring precious metals in ingots, coins, jewelry
- using a current or deposit account in precious metals
- acquiring gold certificates and other securities denominated in metals.
Buying gold bullion: where to look, how to choose
The first step. We look at the price, choose the mass
Gold prices change daily, and sometimes significantly. The prices of gold bars, of course, are also regularly listed. From the general theory of the ratio of the price of an ingot to the exchange rate of gold, we note that the value of one gram of bank gold ingot at purchase exceeds the banking rate by different amounts depending on the total weight of the ingot.
Measured ingots today weigh 1, 2, 2.5, 5, 10, 20, 50, 100, 250, 500 and 1000 grams (over a kilogram - ingots are only special, factories make them only individually).
By the way, banks sell ingots not only in grams but also in troy ounces. However, in this category, domestic banks are only about the weight of one troy ounce (31.10 grams).
Please note that on all domestic sites with the price of ingots, it is customary to indicate the price per gram of ingot, and not for the entire product. So without a calculator or a special service when studying the prices of ingots is almost impossible.
Finally, many banks repurchase ingots weighing more than 100 grams at a much lower price than small ingots. A proper conclusion from this trend, readers when choosing the weight of the ingot to buy, no doubt, will make their own.
The bankers themselves determine the desired size of the ingot (purchased for investment purposes, for resale) succinctly: ingots of recognized manufacturers weighing 100 grams or less.
The second step. Buying gold in banks
Further steps, in addition to the actual purchase of the ingot, is best done by calling the bank. But in which - after all, not all financial institutions have a license to trade in metals, and even fewer banks sell bullion?
We recommends using the always current rating of prices for bank metals, which lists all banks that declare the sale of gold bullion.
However, in the above list, some banks sell bullion only in theory - in practice, such transactions can be carried out, for example, only for VIP-clients, and in large numbers are absent.
In addition, many banks may not have the cheapest, one- and two-gram bars. On the contrary, the bank has only two and five grams, but no larger bars.
But here, the bank for the first attempt to call you chosen. You call to find out that ingots of interest to you are sold. And then, before you start to find out other parameters of the ingot, we advise you to ask a very important question. Namely - in which branch of the bank you can buy gold ingots of this mass?
Theoretically, according to bankers, ingots are sold by both head offices and branches. In practice, in the department of ingots are often missing or the range of their masses is not wide. The purchase of an ingot in such offices is made out - but only then will the ingot be brought to you and handed over to you (through the cashier of the office) by the collector. And this, of course, threatens at least a waste of time.
Naturally, a resident of the capital can usually easily find out by phone the address of the Kyiv branch where the ingots are (perhaps this will be the main office if it is a bank with Kyiv registration). But residents of cities far from the main offices of banks that sell bullion, are likely to face the lack of this "product" in local bank branches. However, if the city is large and there are many bank branches in it - there is a chance by calling a number of banks to find the desired ingot and "on the ground".
The third step. We ask about the refining company
A refining company is called a refining company or refiner. It puts its mark (sometimes said: stamp, seal) on the gold bar produced by it - sometimes, however, delegating the right to brand the bank ordering the batch of bars. From the status of the finisher (ie from his brand) very much depends on the ability to later sell the ingot, and even its selling price.
World-renowned refining companies, whose ingots are undoubtedly liquid, are Argor Heraeus, Degussa, Umicore, Valcambi. The brands of the largest European institutions are also highly quoted: Credit Suisse, Standard Bank, Commerzbank. While many banks refuse to buy back bars with the marks of the Russian Kolyma refining company or the Ukrainian plant ZakarpatPolymerMetalli. However, if you do not need gold for investment purposes, but for remelting and jewelry - this option may not worry you.
Finally, the theory of refining marks includes the following position. The buyer should be aware that although the de jure certificate for dimensional (up to 1000 grams) ingots is marked on the ingot, de facto manufacturers also supply all gold ingots with paper or cardboard certificates, the loss of which may reduce the ingot's liquidity. So, when you call the bank, ask about the availability of a certificate for the ingot - and in its absence, it is better to look for another financial institution that sells bullion with a certificate.
The fourth step. Stamping, casting or powder?
According to the method of production, there are three types of ingots. The stamped ingot is made by pressing the stamp on the heated metal, has the shape of a rectangle with a perfectly smooth top surface. The cast ingot is made by the method of branded casting of liquid gold, has a rectangular base, and the upper surface - curved, teardrop-shaped. There are also powder ingots - an electrolytically formed mass of powdered gold - but in domestic banks they are very rare.
Most often, stamped ingots are a little more expensive than cast, and cast - powder. However, if you need gold for jewelry - remelting is much easier to produce with a cast ingot. Ingots of low weight - up to 100 grams - are almost always on sale stamped. But with a mass of 250, 500, 1000 grams is easier to find cast and powder ingots.
Thus, when making a phone call to the bank, you should ask: cast or stamped gold bar is offered to you, what is the difference in the repurchase of this bank of bars of both types of formation.
Step five. Packaging?
The gold bar can be sold by the bank as a packand without it. Experts advise to buy ingots (if you do not need them for remelting) only in the package.
Packaging (solid case that does not open) can be plastic or polyethylene; can be completely transparent (the best option) or only on top; there are also gift cases of various kinds. You should ask by phone whether the types of packaging offered to you affect the repurchase of the ingot by banks.
And in the future when storing an ingot, keep in mind that damage to the packaging, even without damaging the ingot affects its liquidity, as the ingot loses its attractiveness. Banks may refuse to buy such ingots or apply a discount, as the bank will have to solve the problem of further sale of such ingots.
Step six. Ransom
If you buy an ingot for resale at a higher price (ie for investment purposes), immediately ask by phone to see if the bank with which you are communicating accepts ingots for repurchase and what is the procedure for this process.
In principle, nothing prevents you from later to sell the ingot to another bank (especially if another bank will accept ingots more expensive than the one where you bought the ingot). But, as you know, who owns the information, owns the future - the more you collect data before buying a bar, the faster and easier you can sell the bar later.
Step seven. We go to the bank and buy
It should be mentioned that to buy gold, no securities other than banknotes are required.
Taxes and additional fees in addition to the declared price of the ingot should also not be. You just buy it like a regular product. The ingot is handed to you directly by the cashier.
Before payment, you need to carefully and meticulously inspect the ingot and its packaging for damage, as well as review the certificate of the refining company. In case of satisfactory inspection and payment, you immediately become the owner of the gold bar.
Finally, it should be noted that ingots should not be stored in a humid environment, preventing them from falling, rubbing against each other, opening the package. In case of a small (scratch) damage to the ingot, you can try to go to the bank to buy the ingot, although you should be prepared for the discount price.
But with significant (dents, wrinkles) damage to the gold bar, you will have only one thing left: to buy precious metals. The price of a gram of ingot in this case will be one and a half times more than in the bank.
An alternative to gold: other bank metals
Traditionally, investing in metals is positioned as a way to preserve savings and protect them from devaluation in a crisis. But to perform such a function, the asset must meet several criteria. First, do not lose your value during the crisis. Secondly, to be characterized by a fairly stable exchange rate and to rise in price in the long run.
The first criterion, in addition to gold, meets only silver. Platinum is unlikely to save your savings during the crisis due to low investment demand for it. The value of platinum is related to its industrial use, and its value is determined more by the real economy than, for example, the value of gold. For this reason, falling car production (for example, due to the recession) reduces the demand for platinum for autocatalysts (40% of total demand for platinum), which in turn may affect prices downward.
Palladium copes even worse with the role of "anti-crisis" asset: investment demand for it is also not high, but prices do not even depend on the state of the world economy, but on the plans of key producers. After 2003, when the controlling stake in one of the largest palladium producers, Stillwater Mining Company (USA), was acquired by another major producer of Norilsk Nickel, the price of the metal largely depends on his plans. There is a certain degree of market monopolization. Therefore, any statements of the company about the increase in the cost of production, plans to reduce production, etc. lead to an increase in market prices.
As for silver, it does not meet the second criterion of "quiet haven" - the course of silver is subject to sharp changes in a relatively short period of time. Around the world today in various forms of silver is 4 times more than gold. Therefore, silver is a more volatile metal, an unexpected rise and fall in its value is common.
Although "alternative" metals are not the best way to protect savings from the crisis, they could be a good tool for market speculators, thanks to the same sharp price drops.
However, all the hopes of speculators to make good money by buying and selling bank metals can be shattered by the huge difference between the rates of sale and repurchase of ingots. The market for silver, platinum and palladium in Ukraine is practically underdeveloped, so the margin between buying and selling will be very large, and few banks will buy these metals at all.
And if you still decide to invest in "exotic" bank metals and expect to rise in price, do not forget about the prerequisites for making a profit.
First of all, the investor must be well versed in how the price of the selected metal is formed, and what factors affect its change. In addition, it is important to remember the high level of risk of investment and not to invest in metals all your savings. After all, the market of bank metals is difficult to predict even for experts in this field.
Gold and silver coins
An alternative to small gold bars are the so-called investment coins. Made of silver and gold, they do not have a high artistic value, which saves on their manufacture and bring the price of 1 g of metal in the coin to the level of its value in the ingot. Therefore, in the world they are in great demand by private investors. Investment coins - South African cruisers, North American (Canadian) "maple leaves", Chinese "pandas" - have been sold since 2003, and even then by some banks. But, remarkably, almost none of them carry out the redemption procedure! The only way out is to go and hand over such coins, which threatens to lose up to a third of the invested funds.
Investing in coins has its own specifics. Pricing in the coin market depends not only on the price of the metal from which they are made, but also to a lesser extent on the circulation, the quality of minting, the expected period of sale. It often happens that the price of gold in the market goes up, and gold coins remain the same.
What and how much?
Coins made today are divided into two types: investment and collectible (commemorative). Both are minted from gold, silver, platinum and palladium of the highest grade. Investment is a coin-shaped ingot of precious metal with recognized weight and purity. It can be bought and sold based on the price of the precious metal on the world market plus 3-40% for the work depending on the weight.
Collectibles are essentially the same, but they are still interesting to perform. There is no clear repurchase price - it depends on the collections value. An investment coin may well go into the category of commemorative, if for various reasons (for example, due to rarity) begins to be of numismatic interest.
In the primary market, coins are sold by commercial banks. On the secondary they can be purchased in online stores, as well as "live" in numismatic markets. Here the price is already formed by collectors.
Summary: coins are an investment for the experienced and patient
Experts advise those who are interested in "precious" investments to take into account the main risk - the difficulty of selling in Ukraine. If you still decide to buy coins, it is better to "forget" about them for 3-4 years: the longer they lie, the more expensive they can be sold. In addition, precious metals are considered the "eternal value" that can save property in the event of a change in government or the collapse of financial systems.
Metal account or deposit
In addition to purchasing and storing gold ingots (such as a bank safe), you can make a non-cash gold deposit or place a bank precious metal on deposit.
Warning! Deposits in bank metals are not covered by the guarantees of the Individual Deposit Guarantee Fund.
The essence of the gold deposit is that instead of money you bring to the bank an ingot (or immediately buy it), which accrues additional interest. To date, the minimum term of deposit in gold in Ukrainian banks is 3 months. At the end of the term, the depositor receives the amount of the deposit and accrued interest in gold bars or hryvnias, if the amount of interest is less than the value of 1 g
"Gold" account without gold
Gold metal bills without a physical supply of gold look like a more interesting tool. When it is opened, only the amount paid, equivalent to the value of the gold bar of the selected denomination, is recorded. At the end of the contract, the fixed weight of the metal is recalculated at the current exchange rate of the NBU, and then together with accrued interest (1-4%) in cash equivalent is paid on hand. On the one hand, such a "gold" account avoids losses that are inevitable in the repurchase of bullion by banks, because the banking rate is usually higher. Plus you can avoid all sorts of commissions. However, income from the increase in the value of gold will have to pay income tax.
What is the main difference between a "metal" account and a regular one?
"Metal" account differs from the usual in that it is a real opportunity and a reliable way to protect funds from inflation. Ingots can be stored for decades. Unlike banknotes, they do not tear, do not burn during a fire and do not deteriorate during a flood. There is always a steady demand for gold. Banking metals are a real opportunity to make a profit. World gold prices are rising every year.
What is more profitable - to invest in gold bars or open a "gold" account?
To answer this question, it is necessary to clearly understand the difference between operations with ingots and without physical delivery. In the first case, you can get away from systemic risks by taking the metal from the bank and organizing its own storage. In the second - when investing in metal without physical supply - there are no problems with storage, the liquidity of such metal is significantly higher compared to ingots. Ultimately, due to higher liquidity, lower margins due to the lack of costs for the manufacture and import of ingots, more predictable pricing of transactions with metal without physical delivery bring higher income. But if it is a small amount of gold within a few tens or hundreds of grams, and the customer is confident in his desire to organize the storage of purchased gold, buying specific ingots would be a smart decision.
Which banks are best to turn to to buy and sell gold bars?
Which of the Ukrainian banks can be considered the market leaders in the sale of gold bars? Does it matter to an individual in which bank to buy a gold bar, and whether it is worth turning to market leaders? Why don't some banks that sell gold bars buy them back?
Today, the market leaders in terms of sales are those banks that have a license to purchase bank metals in international markets. Such banks buy gold directly from refining companies, so the cost of bank metals in them is cheaper and, accordingly, sales are higher. Banks licensed only to work with banking metals in the domestic market buy gold bars from market leaders and then resell them with their margins.
Recently, due to the increase in the number of banks licensed to work with banking metals in international markets, the share of former leaders in the banking metals market has decreased, and due to increased competition, the margin received by banks in selling gold ingots.
For an individual, it does not matter at all which bank to buy bank metals. When buying gold bars, it is recommended to monitor banks in order to find the lowest possible price for bank metals. It is also necessary to find out whether the bank sells cast ingots (unpackaged and with unpolished surface) or stamped (laminate, polished surface), because not all banks buy cast ingots or put less on them the redemption price.
All banks buy back gold bars if they have an expert. As a rule, all banks that are market leaders have experts, and such banks will easily buy metal from you.
You can also familiarize yourself with fraudulent brokers.
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