This week’s blog is a highly practical one. I thoroughly enjoy exploring in-depth analysis of current affairs to inspire as many members of Bleyer’s readership to take the leap into Precious Metals ownership. But, once that decision has been made, it is definitely worth exploring the variety of ways one can invest in Precious Metals.
First, there is the point of deciding to own physical precious metals rather than other alternatives on offer. For example, there are significant advantages to owning physical Gold over owning paper contracts. The only way to get your hands on the bullion itself is to buy and own the physical product. You can then decide whether to have it on your premises or to use the services of a secure vault. There is a range of ways of achieving this aim.
Many analysts are agreed that being invested in commodities, including precious metals, is a good thing. Most confine their recommendations to funds that invest in a basket of commodities. Although a rise in gold-spot selling prices improve the fortunes of gold mining companies, it probably faces challenges from declining output and increasing costs; so that its share price does not fully track the way that gold bullion rises in price due to its increasing scarcity. And other investment classes like property, oil & gas etc. are often included in the fund and can distort fund performance, limiting your exposure to the actual bullion market.
Nearer to the market are ‘paper gold’ certificates ‘ETFs’ or ‘ETCs’ (Electronically Traded Funds or Certificates) which purport to grant you ownership of the real asset: but the definition of ownership can be cloudy and you need to understand what these concepts actually involve.”
There is the manageable regular purchase of small bars and coins to store in one’s home. There is even the arm’s length method of owning Gold in a Pension Scheme, for example, without taking physical possession while controlling full allocated ownership. But, if you are a reader – or well-known member of our client family thinking of investing further with us – it is worth considering the advantages of buying in bulk.
This may be to take physical possession or to store with Bleyer’s secure facilities, either in the UK or Channel Islands. But either way, let’s focus on the advantages of buying in bulk as a natural antidote to the perhaps understandable financial trepidation of doing so.
Economies of Scale
“It’s true that whether you buy large or small quantities of precious metals, you still need to be relative to the current spot price. However, there are significant advantages to buying anything in bulk. This is a principle known as economies of scale. Bulk or wholesale buying always favours retailers, as they are able to gain certain price advantages based on the entire deal and then offer discounts to retail customers when selling off their stock,” (thanks to an Australian counterpart, Physical Gold).
Buying coins and bars in bulk allows the buyer to benefit from significant savings on factors such as:
- Admin fees
- Postage savings on specific jumps in the weight of your order (ask for details)
- Staff time
These are costs that any buyer incurs even if they are buying smaller quantities, however, when these costs are spread over larger volumes, they are much lower per ounce of that precious metal. The cost of insurance greatly reduces per ounce, while a bulk purchase may well attract free shipping. This creates price advantages and the buyer can enjoy greater savings on every delivery.
What Savings Bleyer Can Give You
So, let’s look at how this could work out to your advantage in practice. The most popular bullion Gold in this country and for Bleyer’s sales is the 1oz Silver Britannia. The Britannia coins are great because they are UK legal tender and hence capital gains tax-free.
At the spot price at the time of writing:
- 1 Silver Britannia Coin would cost £20.34
- But buying 100+ would reduce that cost per coin down to £17.14
- And buying 1000+ reducing the unit cost down to £16.89
- The difference between the first and third option is a highly advantageous 16% savings.
And Why Now?
You won’t find these sorts of sentiments in the tabloids or even mainstream broadsheets yet, on either side of the left-right aisle. But this morning, Zerohedge writes that one prominent CEO comments quietly that the next big move will likely not be in treasuries but “in gold prices which have broken their downtrend line, and are on the verge of breaking out to the upside. It’s getting almost exciting… something big is happening,” he said cryptically.
He then revealed his target, saying that based on classic chart reading, an “explosive, potential energy” of a huge “head-and-shoulders bottom” base was signaling a move of $1,000 in gold prices, and added that “Gold is maintaining an upward pattern above its rising 200-day moving average, which is extremely good.”
As always, we strongly encourage all our readers to conduct their own research. As Forbes Quote of the Day states: “Right now, for the first time ever, a passionate and committed individual has access to the technology, minds and capital required to take on any challenge.” Peter H. Diamandis, Founder of XPRIZE Foundation
And yesterday another profoundly worthy voice sounded the Gold upwards price correction alarm. Olivier Garrett is founding Partner and CEO of Mauldin Economics and Garret/Galland Research, leading publishers of financial research geared to individual investors and institutions. Between 2007 and 2015, he was CEO and Partner of Casey Research, a publisher of financial research focused on the resource sector. And this is what he concluded less than 24 hours ago:
“If You Can’t Afford To Lose 30% Of Your Retirement Savings Today, You Must Own Gold”
A customer of Bleyer who is 55 years old recently asked if it was not too late for him to get into precious metals. The answer is no – it is never too late to invest in gold and make a profit at any age. Quite the contrary, with the market showing the early signs of a correction, it is, in my humble opinion, a perfect time to invest in precious metals.
The first rule of successful investing is to buy assets on the cheap, not when they are peaking. Yet, most investors would rather buy Bitcoin when it hits $19,000…
Call Bleyer on 01769 618618 or email email@example.com to set up a convenient time to talk through your options. Or, if you know which products you would like to buy or are a regular client, simply enjoy using our online buying facility on www.bleyerbullion.co.uk.
We hope you have a lovely week enjoying the gentle arrival of some sunny weather in the UK.