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fs42

bullion silver in SA?

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fs42

Hi there, is there no way to buy bullion silver bars or coins at a mark-up of less than 10% above spot value in SA? And how the VAT thing work, can the entire VAT paid really be claimed back again when selling the bullion silver? Will there ever be a non-VATable bullion silver coin product by SA Mint like the Krugerrand is for gold?

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PBGold

Doubt there will ever be a silver version of the Krugerrand. Shame really.

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republikein

I have actually send an e-mail to a previous governer of the SA Reserve Bank and made the recommendation that they must look into minting a silver .999 Kruger Rand, like the silver Eagle, silver Maple Leaf, etc. There is a market in RSA for a silver Kruger at a small premium above market value. But deafening silence.

 

I agree, why can't a SA mint company not mint silver rounds in bulk for sale to the public. The overseas bullion coins for sale on BOB sometimes comes with a 100% premium!!!

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Cold Sea

You can always try a refiner and buy bullion bars, gold, silver and even platinum. They sell 100g, 1kg. However, their mark-up is about 30% above the spot price. I had a look on the net and somebody like Metcon will sell you a 1kg fine bar for about R10 500.00 + vat (I do not know these guys, just Googled them).

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jwither

I would not expect the SA Mint to issue a silver bullion coin unless I am incorrect and they can procure the metal more easily and cheaply than I believe. If you look at the largest producers of silver bullion coins (the US, Canada and Australia) they all have access to a domestic supply because they either mine it, refine it or both. I'm not aware that South Africa produces a large quantity of silver locally which likely means they would either have to have it shipped or use other sources such as coins.

 

For the South Africa buyer who has the capability to buy it in large quantities, the best option known to me is the SafeWealth SafeStore system. But the minimum is USD $250,000 and the fees are up to 2.5% of the value (less for larger quantities). The benefit of this option is that it is stored in the safest custodial structure in the safest political jurisdiction and they are provide advice on acquiring and liquidating it as part of the fee.

 

For smaller amounts, there are depositories in the US, Canada, Australia (Perth Mint) and presumably others not known to me. I used to consider the Perth Mint a viable option but the last time I checked, there refining fees which are required for segregated accounts were exorbitant and I will not pay them. Between teh US and Canada, I would prefer Canada.

 

The last option is what I presume most in South Africa choose which is to store it at home or in a bank safe deposit box. I would not choose this option other than for nominal amounts.

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Patricia_Gert

Good day all,

 

The SA Mint only mints the Proof Kruger Rands of which quantities is limited each year, as this as seen as a Numismatic coin.

 

The bullion Kruger Rands is produced in quantities as market demand dictates by Rand Refinery. Rand Refinery is an independant, unlisted company that is owned by some big SA gold miners. The SA Mint and the SA Reserve bank has no interest in Rand Refiney.

 

Based on the above, and like jwither stated that SA does not have large quantities of silver (Silver is produced in South Africa mainly as a by-product of gold), I seriously doubt that the SA Mint will start minting Bullion silver coins. However, if there is a viable market demand, nothing stops a silver refiner to start minting silver coins. In my opinion though the mark up over spot will make the business not viable. E.g. will you buy a silver coin at 30% over spot knowing that if you want to sell, you will probably get less than spot? That means for your "investment" to just retain it's value the spot price of silver has to increase more than 30%. Large volumes can reduce the premium over spot (due to economies of scale) but the SA market demand is probably not that big to introduce these economies of scale.

 

Kind Regards

Gert

Edited by Patricia_Gert

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Guest Guest

The Perth Mint

 

The Perth Mint supply silver bars and coins at a tiny premium over spot.

 

At the moment they are sold out of 20oz and 100oz bars but do still have 10oz and 1kg bars... you can also buy their silver rounds (Koala).

 

See: Investing in Gold & Silver Online at the Perth Mint Bullion

 

If you want the Perth Mint to store the physical metal for you, you can via this link

 

Hope this helps

 

Kind regards

 

Scott Balson

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jwither

Scott,

 

You and I have a completely different definition of "tiny" I just checked the link you provided and though I did not see the prices for the 100oz, the price spread for the 20oz is 10%. That is hardly "tiny". I consider it a colossal rip-off. California Numismatic Investments sells 100oz bars at $1.60/oz over spot or 3%. The price spreads USED TO BE reasonable but changed at some point in the past though the date escapes me. There is of course, the option of buying metal through the Perth Mint without having it fabricated at no premium and with no storage fee but this is for unsegregated accounts only. Personally, I would not recommend that option though I consider the risk of default much lower than with other providers offerring the same arrangement.

Edited by jwither

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PBGold
Good day all,

 

The SA Mint only mints the Proof Kruger Rands of which quantities is limited each year, as this as seen as a Numismatic coin.

 

The bullion Kruger Rands is produced in quantities as market demand dictates by Rand Refinery. Rand Refinery is an independant, unlisted company that is owned by some big SA gold miners. The SA Mint and the SA Reserve bank has no interest in Rand Refiney.

 

The S.A.Mint also mints the normal bullion Krugerrands. The Refinery sends the blanks to the Mint via helicopter, where the Mint mints the Krugerrands and then they are transported back to the Refinery for distribution. This has to be done because the Krugerrand is Legal Tender and by law, only the South African Mint may produce legal tender coinage, unless authorization is given to some other entity.

 

But yes, the Mint only sells Proof Krugerrands.

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jwither
Scott,

 

You and I have a completely different definition of "tiny" I just checked the link you provided and though I did not see the prices for the 100oz, the price spread for the 20oz is 10%. That is hardly "tiny". I consider it a colossal rip-off. California Numismatic Investments sells 100oz bars at $1.60/oz over spot or 3%. The price spreads USED TO BE reasonable but changed at some point in the past though the date escapes me. There is of course, the option of buying metal through the Perth Mint without having it fabricated at no premium and with no storage fee but this is for unsegregated accounts only. Personally, I would not recommend that option though I consider the risk of default much lower than with other providers offerring the same arrangement.

 

I need to clarify what I just wrote. The premium to spot at the Perth Mint for the 20oz is less than I said, as I mixed it up with the price spread.

 

However, as of Friday (June 3), the premium to spot on one oz coins is about $10 versus $4 at CNI. And the buy/sell price spread is $12 versus $2.50. For the 100oz bar, CNI price spread is actually $2 or 5.5%. The premium is $1.60.

 

Whether silver bought through the Perth Mint can be sold to a third party, I do not know. Maybe as an Australia resident or some one who is dealing in very large quantities, it would be a minor obstacle since the owner could take physical delivery and then sell it. But for someone dealing in "small" quantities or who does not live there, I do not see it as a practical option given the difference in the Perth Mint buy/sell spread.

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fine999
Hi there, is there no way to buy bullion silver bars or coins at a mark-up of less than 10% above spot value in SA? And how the VAT thing work, can the entire VAT paid really be claimed back again when selling the bullion silver? Will there ever be a non-VATable bullion silver coin product by SA Mint like the Krugerrand is for gold?

 

No, is there no way to buy bullion silver bars or coins at this price in SA, or in any other country that does not mine significant amounts of silver AND has low or no taxes on silver. These conditions are currently most evident primarily in the US, Canada and Australia.

 

South Africa does not produce a low-price-relative-to-spot silver bullion coins due to, I believe, these two factors (low silver availability and taxes). The silver bullion coins South Africa does produce are premium priced, limited-edition coins aimed at the premium investor market - a specific marketing strategy that capitalizes mostly on Mandela as a brand. If SA did produce a low-premium bullion coin, I don't believe we could mine silver in the quantities and prices that would make it internationally competitive.

 

Availability of silver in SA:

South Africa is not a primary silver producer and is only 20th on the list of world silver producing nations. Silver is mined as a byproduct of gold, copper and zinc mining in SA. There is therefore a local scarcity of silver relative to gold. Contrary to popular belief, South Africa's mines are not producing at full capacity, but have been either reducing production or closing down. When the gold price rises to historical and profitable norms, and when the uncertainty regarding nationalization of mines is cleared up, gold mining will start up again and South Africa will once again be producing silver as a buy-product of gold mining.

 

Taxes on silver:

Silver is VATable in South Africa. You can't claim VAT back unless you are buying as a VAT registered business. You can of course buy second hand silver without paying VAT as VAT is deemed already payed. VAT is also deemed already payed on Krugerrands, so is available at much lower premiums to the public. When VAT is up to three times higher than a manufacturers after cost profit, this tends to drive up handling costs and retailers markups. To illustrate this, in the UK, silver bullion (which attracts VAT at 20%) is readily available at about 75% above spot. Gold (VAT free in EU) is available at 8-15% above spot.

 

The markup on silver is also the result of all other taxes that effect the bottom line of a business: business taxes, dividend taxes, business rates, income taxes of staff, tariffs on capital equipment, lack of tax breaks, legislation compliance costs etc. Taxes limit the size of the silver market, and discourage mints and wholesalers from competitively reducing their prices. In the US, there are many mints competing for business which drives down the markup. In California, if you buy silver in quantities over a certain threshold, you pay no local state tax. If SA were to make silver VAT free, I believe this would massively increase the size of the silver market in SA. Larger market size means higher tax revenues which would compensate SARS for their VAT revenue losses. Money (silver) flows to where it's treated best. Lower taxes would attract world silver to South Africa which would enrich our nation immeasurably over the future years.

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collectors investments

There are still opportunities on Bid or Buy to buy silver at bullion-spot value.

People just need to take time and go through the Bid or Buy listings.

 

Once such example is a 60 coin medallic South African History set where the starting price of the auction is at spot silver price.

Each medallion weighs about 38g and is made of sterling silver (.925)

 

Medallions - ## 60 Proof Silver Gold Plated Medallions - Ons Geskiedenis in Beeld, Die Africana Herdenkingsmunt## for sale in Pretoria / Tshwane (ID:39387622)

Edited by collectors_invest

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