The best way to acquire gold

The best way to acquire gold is through Krugerrands (KR’s). It is seen as legal tender and not subject to VAT or income tax, if it is not traded.

 You may ask about the “DOWNSIDE of gold.”

 ·       The first reason would be initial costs of a Krugerrand. If purchased today and sold back tomorrow, there would be cost of 8% that would be lost.

·       The purchase price of a Krugerrand is the spot price of gold plus 4,5%. This covers the melting, refining and striking of the coin – the Rand Refineries’ costs.

·       Then there is the marketing costs by the shops and distribution channels. This is typically between 3 to 4% of the value.

·       In my instance, as I do not have the overheads, I am able to reduce it to 2% for you. This is a savings of 2% for you on the purchasing price.

·       Similarly, when you wish to sell your Krugerrand, a shop will offer you the spot price of gold. I am able to offer you spot plus an additional 2% as a bonus.

·       This means your downside through me would only be a loss of 4% instead of 8%.

 What about the "UPSIDE of gold?"

 ·       Gold is not an investment, as it does not change in its nature, it will always only ever be an ounce of gold. It does not pay dividends nor interest, it is not designed to do so.

·       It is primarily a way of protecting your purchasing power. With a weakening rand due to inflation, caused by the increase in the money supply.

·       In 1967, when the Rand Refinery started striking one ounce coins, gold was fixed at $35 or R 27 an ounce. Today it is R 33 000+, that is more than 1 000 x increase over the 55 years.

·       Gold was fixed at $35 an ounce until 1971 when Pres. Nixon closed the gold window and the world went off the gold standard.

·       This mistrust in governments and central banks caused gold to increase to $850 per ounce over the next nine years, a return of 42% per annum.

 Storage options

 ·       Your Krugerrands can be stored in a safe at the vault in Cape Town. There is no charge.

·       Alternatively, one can take possession and store them at home in a safe place.

 The price of a Krugerrand (KR) at present on promotion

 The spot price of gold is a moving target.

·       Raw gold: $1785 x R 17,57                = R 31 362

·       Melting, refining & striking 4,5%       = R   1 411

·       Marketing fee of 2%                           = R      655

                                                                        ----------------

Total                                                               R 33 428

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