Kent

A rather nice article appearing in The Times about the demand for British gold sovereigns in Greece.

May 25, 2010

 

Greeks give new meaning to idea of sovereign wealth

 

They were parachuted in during the Second World War to fund local resistance to the Germans and now, with a population mired deep in another — if very different — crisis, British gold sovereigns once again are the foreign currency of choice in Greece.

 

Once again, too, they are offering a tangible sense of security amid turbulent uncertainty. In the 1940s, as the only reliable currency available, much of it was hoarded in trunks, under floorboards and buried in gardens. Any respectable girl’s dowry included a cache of sovereigns.

 

Now they are being used as a physical hedge against fears that Greece may leave the eurozone. For weeks buyers have been queuing patiently in the central bank’s main downtown Athens office, prepared to shell out nearly €273 per piece, up from €243 at the start of May and €180 last July. Persistent worries that Greece could default at least partly on its debts are emptying the Bank of Greece’s vaults of at least 700 gold coins a day, giving a whole new meaning to the term sovereign debt.

 

“The public’s renewed interest in sovereigns as an asset started with the collapse of Lehman Brothers,” the daily Kathimerini wrote. Central bank officials estimate that while Greek demand for the distinctive bullion has been rising by 10 per cent a year since 2008, its price has been soaring by more than 50 per cent.

The full article: http://business.timesonline.co.uk/tol/busi...icle7135543.ece

Secondly, why are Sovereigns generally c.£20 an ounce of gold cheaper than any thing else?

 

As far as I can tell: 1 oz on BV trades at about £817 today. 1oz bullion bar or 1 oz gold round on CID costs c.£859. I'm wary of these as I am warned of assaying costs etc. when you resell. The cheapest gold oz coins on CID are pandas which are about £883. However, I think I can buy an oz worth of gold in sovereigns at about £868 an oz. In my eyes, sovereigns have many advantages. Although they aren't as pretty or chunky as big oz coins, their smallness is a benefit in terms of sale (divisibility) and transportation, hiding etc. As with Britannias they are tax free in terms of CGT. As you know I'm a Civil Servant and have to scrupulously obey the tax rules so this is a big advantage. Given this, you'd expect them to be MORE expensive than oz rounds, not less! (Other small coins are). So why are they cheaper? Or is my maths wrong.....?

Your maths is correct and you highlight something interesting about the current market.

At a quick glance sovereigns seem to be priced accordingly weight for weight to other fractional coins; a South African 2 Rand, for example, with a gold content of 7.32g is priced at £204.29 and a Elisabeth II sov is £204.78

What I think you have observed is the current popularity of the larger 1 ozt coins which are in shorter supply now. I have never seen the CID site so low on stock, even compared to past periods of heavy panic buying.

In my view, smaller coins get overlooked by many buyers and the purchase of sovereigns, fractional britannias and other historical fractional European coins are a real bargain to be had.

Another round of deleveraging and it could easily head back down to 200.

If gets down to or near to $200, I will pop into Harrods and buy one of their 400 troy ounce PAMP gold paperweights.

http://www.harrods.com/HarrodsStore/Global...50-2e7cce700a00

Anyone watching the program on channel 4 about the Saxon hoard ???

 

Apart from the historic significance ( which is priceless ), i was surprised to find out that it was 5kg of gold and 1.5kg of silver. Not a bad stack at all, but not a huge amount ( 150 - 160 troy oz )

Yeah, small change , but when compared to what is being alleged to be held in the vaults of ScotiaMocatta it's a shed load.

Now this is more like it, a hundred tons of Nazi gold.

From:

Seems like Jim has spotted that safe deposit boxes are not suitable for cash, pornography(!), or any other coin (other than numi):

 

His comment: "Please note that the legal disclaimers are making this type of storage anything but safe keeping."

 

I tried to copy the point 3 here:

You are prohibited from placing cash (other than coin or currency with numismatic value, such as an antique coin collection) or pornography in your safe deposit box.

 

Point 4(20) is also suspicious. Looks like a giant a*se-covering exercise to me!

Class actions: waiver of jury trial.

You also agree that you will waive any right you may have to have the verdict on any suit you may bring rendered by a jury.

I would not have any confidence in putting any gold money into a deposit box with any of the mainstream banks, with or without the restrictions you have highlighted above.

Are you aware that DF aka "Frizzers" posts here as Cuthbert Calculus?

Oh yes, but he's not a frequent poster. I never heard a thing from him when I commented on his encounter with PCSO Nolan.

Nothing against DF, but when he sweats a bit about gold/target price I feel more comfortable. Also like yourself, warpig, I believe with everything in tilt, seasonal gold is now obsolete, so an April end date is not the end of it, if it does not hit $1.4K in 4 weeks time, it will soon thereafter. Dominic will not have to wait 18 months whilst gold consolidates etc.

If Cuthbert Calculus does see this, then all I can say is "Calm down dear".

Well, some were calling for a decline to 3 digits while others were looking for gold to go to new heights. Looks like the April fools was on most as gold has consolidated in the "no-mans land" of 1100.

 

Gold looks to be at a crossroads here..... will it rocket, consolidate, or track sideways this month.....

 

Link to last month's thread:

http://www.greenenergyinvestors.com/index....st&p=161426

I read this last week in a MoneyMorning by Dominic Frisby whch was the decider for me in which way the market will go.

But for now, my spring target of $1,400 looks like it was, well, a little optimistic.

http://www.moneyweek.com/investments/preci...rice-01306.aspx

We all know that Dominic is a long term gold bull, but given those remarks and from what I have read by him in the past and what has happended, $1,400 gold is now a goer.

Terreblanche lived by the sword and died by... being hacked to death. I won't shed any tears for him.

I don't care for Terre'Blanche (White Earth) either, but there are concerns for what has happened could have reprocusions in South Africa.

Is this money coming out of Greece-there is a full blown run-going into gold?

 

Next week's default will push it up again.

 

Nick

South African Government calls for calm after the murder of Terre'Blanche

From: http://www.youtube.com/watch?v=0S_dcmKk3qk

I don't think they will confiscate this time around: they will tax the living daylights out of your 'profits'. Look for a 50% capital gains tax on the proceeds of PM's. Gold holders will be as popular as bankers in the mainstream media. Whether you physically own it or not, they will 'confiscate' it from you at the point of sale.

That's something that has crossed my mind. We saw short sellers getting scapegoated for bringing down the banks, the same could happen to gold holders, as they would be seen as undermining the FIAT currencies.

The way around that would be to sell it in a gold friendly country.

Naturally, the Torygraph isn't concerned about the "loss" Geoffrey Howe incurred by not selling in 1980.

Geoffrey Howe was right not to sell in 1980. The country's gold reserves are not for speculating; it is there for emergencies, for example 1940.

Markets had a little wobble recently but confidence remains intact. What happens if (when?) confidence goes and markets break is another matter - we will have to wait and see. Lets just hope we dont go there.

The QE Fire Brigade will be called out again.

No, I can't. I wish Prechter would pop up to punch his own corner. I am not his spokesperson and I hope he is wrong and you are right on gold for one

 

I just feel like this is a situation where nobody can know what is going to pan out and a modicum of caution wouldn't come amiss.

I personally feel more comfortable when there is doubt, I get nervous when something looks like a sure fire bet.

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