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Gold price rising…..The Perfect Storm?

As gold hits a 5 month high (at time of writing) Investment commentators worldwide are all agreeing on one thing: it appears that the ‘perfect storm’ is on the horizon for this safe-haven asset.

Most investors will know, historically the price of gold rises in times of Political and Economic unease.  With Geo-political tensions currently rising throughout the world due to tensions between the U.S., North Korea and Russia, investors seem to be running to the safe-haven asset of gold.

Let’s not forget the element of Brexit, also in-motion but with no clear roadmap as to how that will pan out yet.  In France, Le Pen and the upcoming elections there, will further shake up the economic landscape depending on that outcome.

This uncertainty is supporting physical demand for gold, with holdings in SPDR Gold Shares, the largest exchange-traded fund backed by gold, rising 4.2 metric tons to 842.4 tons as of Tuesday. That’s the highest in more than a month.

The simple fact is in times of turmoil gold tends to go upwards in price. The past has shown that gold is a great hedge, when stocks & shares markets are falling your gold should then be performing well…this is the very essence of a good financial hedge.

When it comes to precious metals though, the most regular advice is to buy and own PHYSICAL metals.  With what appears to be ‘the perfect storm’ forming for the price of gold to increase, the Bulls are on the prowl and smart investors are following suit putting their money on gold.

As J.P. Morgan once said – “Money is gold, and nothing else.”

 

Nigel Doolin

Head of Trading

Merrion Gold.

 

For further information on Merrion Gold call: +353 (0)1 254 7900 or go to: www.MerrionGold.ie  

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How to Buy and Store Gold Bullion in Ireland

How to buy and store Gold and Silver Bullion in Ireland, Scotland and mainland UK with Nigel Doolin, Head of Trading at  Merrion

Nigel Doolin is Head of Trading for Merrion Gold in Ireland, Scottish Bullion and Newcastle Bullion in the UK. Having been a long-term personal investor in precious metals and coming from the business background of running a Vault facility, Nigel was involved in the starting-up of Merrion Gold in 2013. Since then the company has grown to include trading desks in Scotland and mainland UK. With a keen eye and interest in world economics and politics, Nigel and the team at Merrion Gold have rapidly built up a reputation for straight-talking, transparent dealings and educating investors in what is best for them when purchasing or investing in precious metals.

Where does gold / silver derive its value from?

The answer to this question stretches back thousands of years! There are Egyptian hieroglyphs from as early as 2600 BC describing gold as a valuable item. Some of the first minted gold coins to be used as currency were found to be from around 600 BC in Asia. The basic reason gold has come to be so valuable must surely derive from the fact that from days past it was an easy way to move around or travel with your wealth. Of course, it could be worn as jewellery, it is hugely resistant to corrosion and it is (relatively) light. Today the world usage and consumption of new gold produced is about 50% in jewellery, 40% in investments, and 10% in industry.

A lot of the above can be said of silver also, except the world usage and consumption figures are quite different with about 60% of silver being used in industry and teh remainder in jewellery and investment. A little known fact and probably a good way to put the price of gold and silver into perspective is that there is more Silver mined every DAY than there has EVER been gold mined in the history of records!

In general, what is the nature of the relationship between the British and Gold/Silver?

We find on the most part the British tend to move towards investing in gold in times of uncertainty – both political and economic. The Lions share of investors will look at gold as a medium to long-term investment (4-5 years+), with most happy to ride out the dips that usually come at some stage along the way and wait for their investment to top the price they bought at. We have more and more smaller investors getting interested in buying gold and these would tend to be 1-5oz buyers who will buy coins as opposed to bullion. No matter which of these brackets the buyers fall in to they tend to be more educated on the safe-haven value of gold these days.

Which is your favourite gold/silver coin and why?

My own personal favourite coin is the 1oz Gold American Buffalo. I think it is one of the most recognisable coins out there and it’s one of the few coins which I like the design on both the front and reverse. It has a great feeling of heritage and nostalgia about it, and I think it very much looks like the kind of coin one would find in a treasure chest of old!

Do you notice any difference in psychology between the silver and gold investor?

In my experience I find gold investors tend to be a little more relaxed in their attitude to their precious metals investments – most are happy to wait out a longer timescale for their investment to mature – silver investors tend to look for a quicker ‘turnaround’ on their investment. I also feel the silver investor would be more willing to take a higher risk.

What are the most common mistakes of physical Gold and physical Silver investors?

I think the most common mistake first-time investors will make is automatically opting to buy coins – we always ask the purpose of the investment so as to be able to give the best precious metals advice to the client. Clients should understand that with coins there are minting charges and you must also take into account that some coins are more in-demand than others, therefore it is possible that someone purchasing a 1oz gold coin could end up paying a lot more for that 1oz coin than they would a 1oz bullion bar. When they go to sell back to a bullion dealer it will almost always be just valued on the weight, therefore (unless you sell a coin to a coin collector) you will rarely make this difference in price back when you go to sell. There are other pitfalls involved when purchasing gold for the first time, which is why at Merrion Gold we strive to educate our clients as well as serving them in the most efficient manner possible.

Are there any tax advantages in Ireland when investing in Gold or Silver?

The most obvious is that gold is VAT Free, whereas there is VAT applied to all silver sales.

In your experience which silver/gold coin is the most difficult to fake?

The most difficult coins to fake are the newer coins – the likes of the 2017 Britannia and the Canadian Maple (from 2015 on) – these coins have laser-precission waves on the face of them which are practically impossible to fake. It must be noted however that no coin is completely impossible to fake – this is why here at Merrion Gold we have a 6-level testing set-up in-house. Buyers should always be wary of any dealer who does not have sufficient testing set-ups in their business.

Can you describe your 6-level testing set-up?

At Merrion Gold, we have a 6-level testing set-up at our disposal in-house. This enables us to test every precious metal that comes through our company, when either buying or selling. Even though we only trade in LBMA approved refineries, this testing ability means we can ensure all precious metals through our company are 100% as they should be. It is worth noting that some companies will use 1 or 2 methods of testing (some listed below), but we find when all of the testing variations below are used together, the result is as definite as you can get.

Our testing set-up includes:

  1. Digital Weighing scales
  2. Digital Caliper and dimension matching
  3. Magnetic Balance Weighing – this measures the (apparent) weight change in the metal by use of a super-strong test magnet positioned on a digital balance.
  4. Electronic Conductivity measuring apparatus
  5. Fisch testing implements (for coins and used only in-conjunction with the above)
  6. Use of Bullion code matching system.

Can you briefly describe the History of Merrion?

Nigel Doolin

When we started Merrion Gold in 2013, we wanted to create a world-class gold bullion and coin trading service. We offer our clients the complete privacy and security they deserve, this is why we are housed within an actual vault facility. This not only offers clients an environment with total security – but we also offer them the ability to purchase, collect and store their precious metals in the one place.
Our trading volumes have increased year on year, proving to us that if you offer the right service and value to clients they will return time and again. In 2016 we opened our second trading desk in Scotland called Scottish Bullion – and in January of 2017 we opened Newcastle Bullion in the UK.

Can you tell us more about the services you offer?

We buy and sell physical gold bullion and coins. We only deal with LBMA approved refinery’s so our clients can be sure that all gold we sell is ‘good-delivery’ gold. We also have a 6-level testing set-up at Merrion Gold, where all gold moving through us (in OR out) is fully tested and verified. We do not offer any financial advice as we are not QFA’s – however we will give you the very best precious metals advice that you can get.
We also offer safe deposit box rental within the vault (through our sister-company Merrion Vaults) where you can store your precious metals and/or any other valuables you may have.

Why do customers choose Merrion?

I think customers chose Merrion because we are completely transparent and honest in our dealings. The security of being housed within a vault is also a huge plus for us. Our traders have a wealth of knowledge and we try to educate new clients as to what is the best product/s to suit their requirements. Some clients who have given us reviews and feedback online always state that our professionalism and efficiency is second to none. We enjoy what we do here at Merrion Gold and this obviously comes through in our dealings with clients.

Do you sell gold outside the UK / EU?

We can transact with any client anywhere around the world – however when you purchase from us you must collect from one of our vaults. We have vaults currently in Ireland, Scotland and UK. We do not ship to anywhere except to our vaults. If the client cannot make it straightaway for their gold collection, we will securely hold their purchase for them in our company safe deposit box within our vault for up to 30 days at no extra cost.

What are the storing costs after the first 30 free days?

We can store clients purchases within our company vault box for up to 30 days at no cost to the client, to enable them sufficient time to collect their purchase. After 30 days the cost is capped at €45 per month.

Where can potential customers find more about your services?

Potential customers can call me directly at: +353 (0)1 254 7901 – Nigel Doolin – Head of Trading or you can view our website at: www.merriongold.ie

Originally published here

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Brexit vote sparks rush to secure gold and cash in Dublin

The owner of a safe deposit vault in Dublin said new clients from Northern Ireland had trebled in recent weeks amid uncertainty surround Brexit.

Séamus Fahy, founder of Merrion Vaults at Merrion Square in the city said fears over the UK’s exit from the European Union and the impact of negative interest rates across were driving factors behind the growth.

He said there was increased demand for safe deposit boxes to store cash and gold at the Merrion Vaults and another facility in Glasgow in recent weeks.

“However, following the referendum result favouring Britain to leave the EU, we are inundated with calls from new clients in Northern Ireland who are either storing cash in the vaults or investing in gold,” he added.

“The bank service charges cost more to keep the cash in bank accounts compared to putting the cash in safe deposit boxes.”

Among fears to arise from the shock outcome of the EU referendum was a possible lowering in interest rates – already at a historic low of 0.5 per cent in the UK.

Read the whole article here

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Gold Coins V Gold Bars

Gold Coins V Gold Bars

 

People often ask what the difference is between buying gold coins and buying gold bars, or bullion, as it is known in the industry. There are a number of differences and reasons why investors buy one over the other. Whether you are starting out as a gold investor, or whether you are a seasoned investor, our main piece of advice is always: do your research first.

 

We must preface this editorial with the fact that we are not giving financial advice here, we are purely giving advice on which type of gold product to buy to suit your needs.

Gold Bars/Bullion

Gold bars or bullion come in a variety of sizes and weights from 1 gram all the way up to 1 Kilogram bars.  There are larger bars than 1 Kilogram, but these are generally only traded between banks and governments.  The most common size for starter investors would be 1 ounce bars – there are 31.1 grams in 1 Troy ounce of gold.  Bullion is always 24 carat gold 999.9 (Four-nines) purity. One should always only buy bars from LBMA (London Bullion Market Association) approved refinery’s.  If you are looking to buy gold purely for investment purposes we would always recommend buying bullion. Some reasons for this are as follows; not only is the gold bar attractive in terms of appearance but the premiums are lower on bars when compared to coins as the production costs are lower. This lower premium also applies to the different sizes of the bars, as a one kilo gold bar will include a lower manufacturing cost than 10 x 100 gram gold bars. In this example, purchasing a 1 kilo bar opposed to 10 x 100g would save about 1%-1.5% in monetary terms.

Although the size of the bar you decide on will have an influence on the price you will pay, you should also take into consideration how flexible you want to be in terms of realising your assets. Smaller bars such as 1 ounce, 50g or 100g can be beneficial when re-selling gold bars, such as releasing some of your investment or part-selling.  Additionally when buying/selling one big amount of gold, you will face larger exposure to market risk as you will typically be trading on one gold price. When purchasing smaller bars such as the 1ounce gold bar, you will again face the higher premiums as packaging, serial and matching certificates will need to be produced.

Gold Coins

There are many different types of coins to choose from.  This gives you greater choice in sizes, carats and designs.  Coins are also very flexible in terms of re-selling, as smaller units of gold are easy to release when in need of quick access to cash. Another benefit with certain coins such as Britannia’s and Sovereigns are  that they are CGT (Capital Gains Tax) Free.  Selling coins also give you more flexibility as you do not have to sell everything at once, which gives you lower market risk as you are not selling on one gold price. Certain coins such as the Gold Sovereign also hold collectible value and over time these coins may accrue numismatic value which can increase your original investment.  There are many other coins including the Krugerrand, which is one of the most widely traded coins in the world, that tend to attract a smaller premium when buying.

 

The downside to buying coins are that there is a ’minting charge’ on coins so they will generally cost more than bullion weight-to-weight. The difference is not a lot on small quantities but it will start to add up the more you buy.  For instance; if you buy 3 X 1oz Gold Maple coins they will cost you approx.. €20 per coin more than buying 3 X 1oz bullion bars – think about that: both purchases are 3oz’s of 24 carat gold yet the coins are costing you in total €60 more…purely because they are coins. If you go to sell/or scrap the coins/bars you will get a price on the weight so you will not realise this price difference when you go to sell. Coins also do not come with certificates and not all coins are 24 carat (as many are 22 carat or even less for some coins). This can cause larger difficulty when calculating the worth of the coins. From an investment perspective, coins entitle larger premium when compared to larger bars which means that you will get less gold for what you pay. Investing in 32 x 1 ounce gold coins opposed to 1 x 1kg gold bar creates an obstacle if one wants to store the entire investment in one location (eg. safe deposit box).

 

Our advice on which gold product can be summed up by asking yourself: are you buying purely for investment reasons?  Or are you buying to have a nice collection of gold to look at and keep or give as  gifts?….If your reason is the latter – buy coins. If the former – buy bars/bullion.

 

For any further questions regarding buying bullion bars and bullion coins, or to get an instant price on a gold purchase contact our trading desk on: +353 (0)1 254 7901 or visit us at Merrion Vaults in Dublin.

To view our website please click here: http://www.merriongold.ie

 

Nigel Doolin

Head of Trading

Merrion Gold.

 

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The History of Gold Investment

When The New Gold Rush Started To Happen

Gold has always been a prized precious metal, however, the history of gold investment is not long. It can be traced back to the late part of the 19th century, when many countries in Europe adopted the gold standard.

Gold standard simply refers to a system whereby the value of a country’s currency is based on the quantity of gold held in its reserves. Within this system, the dollar was directly linked to gold. But the system started to be abandoned in 1971, with the US suspending the direct conversion of the dollar to gold.

The Swiss Franc was the last currency to divorce itself from gold, with the gold standard suspended there as recently as 2000.

Since 1919, the price of gold was led by the London gold fixing scale, which was really just a telephone meeting of bullion trading companies in the London bullion market.   Fixing its price and divorcing it from currencies combined to make gold a commodity, not a form of money, and it was only a matter of time before investors cashed in on the highs and lows of gold’s changing price.

You can buy gold in bullion form, or buy it indirectly as a futures contract investment (‘Paper gold’).   But gold is not an investment per se, it is a cushion, or hedge, investment that will protect your portfolio from the volatility of other investments, like the stock market. Because it has intrinsic value and because of its industrial use along with the demand for gold jewelry, the prices of gold are relatively stable – and it’s impossible to see how this precious metal would ever have zero value, unlike stocks that go worthless when a company files for bankruptcy.   Historically, whenever the stock market crashes, gold prices experience an upward rush.

As crashes tend to be cyclical it seems obvious that the value of gold will always be relevant.

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How to Buy Gold

Over the years gold has continued to be a good investment option for many people. Many mutual funds and investment firms have invested heavily in gold in one way or another. There are some that deal directly with the gold and investing in it, while others deal indirectly in gold by investing in mining companies.

The returns on gold can be great if you know how it works and having a strategy that works. There are many strategies out there that you can follow, but they must not compromise what your core investment strategy is.

Once you know what to do, then you will see your investments grow. Knowing how to buy gold is important. There are many different ways to buy gold. Make sure you chose one that is safe and trusted. There are a number of cases where people have bought fake gold (online) and ended up incurring large losses.

Buying from a trusted source makes it easy when you want to sell it on later. If you don’t want to trade actively, then it’s best to own physical gold bullion. This is usually much easier and the costs are lower compared to other alternatives like ETFs.

Going for a well-established dealer will enable you to get your investment at a good price, and you will have the knowledge that your gold is legitimate. The dealer you choose to buy from may depend on the volume you want to buy. If you want a kilo gold bar, you will invest more, meaning you have to be more cautious when buying. Always go for a well established dealer and one with a good reputation. The next step after buying the gold is the storage. Storing your gold in a storage facility affiliated with a bank or other financial institutions might not be the best option because there are many horror stories around. Ask your dealer to recommend some options, and then carry out your own research. An independent safe deposit box facility / depository is the best option.

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Gold V Shares… Which Is The Wiser Option For Investors?

The prolonged debate in the world of investing over gold v shares will never end. Varying opinions are offered on a regular basis with people aimlessly switching sides and losing money along the way. To ensure such a mistake is not made, it is important to understand the intricacies of such assets.

Let’s take a dip into this heated debate. Gold v shares which is the wiser option for investors?

Gold Protects ‘Purchasing Power’. Purchasing power is key and gold protects it on the investor’s behalf.

But what does this mean? The value of the asset is not going to depreciate in a way where one will not be able to get a return of some sort on what is in their portfolio.

Shares Are Volatile. The economy has a greater role to play with shares and they can often be extremely volatile. There is a lot of ‘guesswork’ involved with investing into shares. This risk might not be worth it for most people and that is why gold is often found to be more reasonable as an investment choice.

The likes of Warren Buffet have often said Gold is a ‘sterile’ place to invest in because it is not going to pose a massive risk to your portfolio. Most people would think that is the whole point in investing!

It might not grow as fast as you would like it to, but it will grow.   The smart and/or educated answer would be to consider diversification. Gold and shares should both be an integral part of anyone’s portfolio. Those who choose one or the other will have to sift through this piece again to decide which pros or cons fit their needs.

In essence, gold is the wiser option as it is usually going to trend upwards on most occasions, if one was to choose a singular option.   To put it simply, Gold v shares which wiser option is for investors? For security the answer is gold, for greater/quicker possible gains it would be shares.

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Kruggerand Coins

Krugerrands are one of the most well known gold bullion coins in the World. In Europe, they are more famous than US Gold Eagles.
Krugerrands are 8.33% copper and 91.67% gold. As with the US Gold Eagles, Krugerrands come in four sizes, yet the fractional ounce Krugerrands are not generally accessible. More gold Krugerrands have been minted than all other types of gold bullion coins together, with in most accounts 42 million having been stamped following 1967. A large bulk of Krugerrands were minted in the 1970s and mid-1980s to take care of the demand as gold bullion purchasers ran to gold coins as insurance against rapid world inflation.

Minted in South Africa, the Krugerrand was initially foreign to the United States investor initially after Americans recovered the privilege to purchase and own gold bullion on December 31, 1974. The hurry to purchase gold was on, and these gold bullion coins turned into an instant hit with gold purchasers. Today the Krugerrand remains one of the best gold bullion coins minted for trading in.

Krugerrands come in four sizes: 1/10-ounce, 1/4-ounce, 1/2-ounce, and 1-ounce. Every one of the four gold coins convey the same configuration. 1-oz Krugerrands are by a wide margin the most well-known and by and large can be found in vast amounts. The partial ounce Krugerrands are not as easily accessible, but rather when fractional ounce Krugerrands are accessible they are altogether lower estimated than fractional ounce US Gold Eagles, which come in the same four sizes.

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The Gold Bar

As speculation vehicles, gold bullion bars are picking up in ubiquity principally on the grounds that gold bars convey much lower premiums than gold bullion coins convey. Case in point, premiums on kilo gold bars can be as much as €40 every ounce lower than the premium on gold coins.

Genuinely, gold bars are an energising approach to put resources into gold. Hauling extensive gold bars very nearly causes an adrenalin surge. Constantly, individuals holding vast gold bars interestingly asked, “By what means can something so little be so heavy?” A gigantic measure of riches can be put away and covered in gold bullion bars.

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The Gold Market and Spot Cost

The spot cost of gold is the most well known standard used to gauge the going rate for a single troy ounce of gold. The cost is driven by theory in the business sectors, coin values, current occasions and numerous different components including the stability of world economic markets.

Gold spot cost is utilised as the premise for most bullion merchants to focus the precise cost to charge for a particular coin or bar. These costs are computed in troy ounces and change each couple of seconds during business hours.

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