Condition of Coins

Note: Grading can be described as being between two grades, ie VF-EF

The Fix

The fix is the international method recognised and used for determining the gold price. It is based on a bizarre tradition that took place in the offices of the bank of N. M. Rothschild in London. Analysts and traders who were talking to large buyers and sellers around the world would sit in a room with a small flag which they hold raised. They lowered the flag when they were happy with the gold price. The chairman declared the price fixed when all the flags had been lowered. This tradition has now been taken over by a panel of banks chaired by Barclays Capital. Traditionally, this price was used around the world, but with the development of other gold markets the significance of the London fix has diminished and the days trends tend to be set by the Hong Kong Market which opens eight hours earlier and services the worlds biggest consumer of the metal – China.

Click here to view the current fixes

The Gold Standard

The use of gold as the standard value for the money of a country.

If a country will redeem any of its money in gold it is said to be using the gold standard. The U.S. and many other Western countries used the gold standard during the early 1900’s, but Britain abandoned it 1931; the USA followed suit in 1971, breaking the last tie between gold and circulating currency, resulting in our modern financial system which is called a “floating currency” system.

Holdings of gold are still retained because it is an internationally recognized commodity, which cannot be legislated upon or manipulated by interested countries.

Since 1976 gold the U.S. government no longer sets the gold value of a dollar. The price of gold rises and falls in relation to the demand for the metal. Gold coins have not been minted as legal currency since 1933.

Troy Ounce

Avoirdupois Ounce

The Avoirdupois system is the everyday system of weight used in the United States, and was used in the United Kingdom and elsewhere until metrication. This system is not, however, used in the precious metal industry, which utilises the troy ounce.

1 avoirdupois ounce = 28.3495 grams

The London Bullion Association

Market Bar

The standard trading unit for wholesale gold dealing is the 400oz bar (12.4kg). As this is out of the reach of most private investors, a wide range of smaller bars are also available.

Gold

History

Gold is the oldest, and most trusted, investment of all. This unique metal has been prized throughout time by advanced cultures and primitive societies alike, and has been the cornerstone of the world’s economies and banking systems since they were first developed.

For a full history of the metal, go to http://www.goldinstitute.org/history/

Properties:

Historic Prices:

Silver

History:

For a comprehensive history of the metal, go to http://www.silverinstitute.org/facts/history.php

Properties:

Historic Prices:

Platinum

History:

For a comprehensive history of the metal, go to

http://www.platinuminfo.net/pgm_pt_histo.html

Properties:

Historic Prices:

Palladium

History:

For a comprehensive history of the metal, go to

http://www.platinuminfo.net/pgm_pl_histo.html

Properties:

Historic Prices:

VAT

VAT of 17.5% is currently payable on all precious metal purchases, except for Gold, which is exempt.

Gold is classed as an investment metal and is consequently exempt (much as you would not pay VAT if investing in US Dollars)

The necessity of paying VAT when purchasing Silver, Platinum and Palladium makes those metals prohibitively expensive as direct investments. However, it is possible to invest in these metals without paying VAT by opening a metal account or betting on the future value

For detailed advice, please click here

Tax

Tax issues (especially regarding VAT) can become a little complex and ambiguous regarding precious metals.

If in doubt, please seek advice from the Inland Revenue.

Hedge

An investment made in order to reduce the risk of adverse price movements in a security or commodity, by taking an offsetting position in a related security, such as an option or a future

Futures

A future is an agreement to buy or sell a set amount of a commodity or security in a designated future month at a price agreed upon today by the buyer and seller. A futures contract differs from an option because an option is the right to buy or sell, whereas a futures contract is the promise to actually make a transaction. You can close your position at any time prior to the expiry date by transacting the opposite sum on the current future price.

Options

There are two kinds of Option ; a Put and a Call. Buying a Put Option means buying the right, but not the obligation, to sell the underlying security or commodity at a defined price (the strike price) before a defined date (the expiry date). Buying a Call Option means buying the right, but not the obligation, to buy the underlying stock or commodity at a defined price before a defined date. Options differ from futures because a future is a promise to make a transaction, whereas an Option merely gives you the right to buy or sell if you wish to. The maximum downside potential for an option is the cost of the option itself (ie you do not have to buy/sell the underlying if it is not beneficial)

Assay 

Platinum, Palladium, gold and silver may be assayed. This means that the purity of the metal is tested to protect consumers. Once an item has been assayed, it is usually hallmarked (this is done by the assay office in the UK), clearly showing the relevant standard of the metal. When dealing in bars, the hallmark gives the investor comfort that the product is genuine

Investment metal

Gold is unique as the only metal which is classified as in ‘investment metal’. This means that purchasing Gold is seen as an investment (rather like buying shares or US Dollars) and VAT is therefore not applicable.

Although it is an investment metal, the Financial Services Authority does not class gold or other precious metals classified as specified investments, meaning  that there are no specific regulatory restrictions when investing in precious metals (whereas there are for many other forms of investment).

Delivery terms

For Physical Metal, once the metal is ordered, the only additional charges are for insured P&P, these charges are……….

Tolas

The old Indian unit of weight .1 Tola = 11.66g

Taels

The ancient Chinese unit of weight. 1 Tael  = 37.429g

Weight conversion table

Account Options

Customers who trade with The Stephen Betts Group can trade on credit subject to rigorous credit control checks. This service is available at a cost. Please contact us for further information

Postal Rates

The Stephen Betts Group uses Royal Mail’s Special Delivery for all valuable goods. Price varies depending on weight.

London Good Del.

London good delivery bars. A good delivery bar is a 400 troy ounce (12.5kg) which has been stamped by a member tof the LBMA