First-time buyers often wonder whether to start with gold, silver, or another metal. Gold is generally seen as a stable, long-term store of value, while silver is more affordable and has higher industrial demand, giving it more value in economic applications than other precious metals.
At Stokvel Gold we like to keep things simple. Bars are usually bigger than coins and can offer some price advantages to coins, however coins such as Krugerrands in gold and silver are government-issued, easily recognizable, trusted and simple to trade. Bars generally have lower premiums per ounce, but many precious metal scams focus on bars while coins are generally safer to buy.
Bullion coins are valued based on their precious metal content. So, for instance, the Silver Honey Bee in our catalogue is minted by an independent South African Mint. Its value is based purely on the amount of silver it contains, being 1 ounce of fine silver. Numismatic or collectible coins have an additional value based on rarity, condition, and demand, which can be much higher than their metal content. For instance historical coins which are no longer easily found can be priced higher than their metal value due to them being rare. For a first-time investor, Stokvel Gold recommends bullion coins such as Krugerrands as the most straightforward choice for beginners.
A common recommendation is to allocate 10-15% of your portfolio to precious metals for diversification. However, this can vary based on individual risk tolerance and financial goals.
The spot price is the current market price for one troy ounce of a precious metal. It fluctuates throughout the day based on supply and demand in the global markets.
The price you pay includes a "premium" over the spot price. This premium covers the costs of manufacturing, minting and distribution of a coin as well as the dealer's profit margin for providing the service.
Besides the premium, other potential costs include packaging – if you want special packaging - and storage fees - if you choose to use a Stokvel Gold’s authorised storage services.
Gold Krugerrands are bought without any VAT while Silver Krugerrands attract VAT at the prevailing VAT rate in South Africa. In addition should you sell your coin in future, a capital gains tax may be payable at that point in time.
It is crucial to buy from an authorised dealer. In South Africa, the South African Association of Numismatic Dealers (“SAAND”) is the industry body that lists all authorised dealers in South Africa. Authorised dealers are required to be registered with the Financial Intelligence Centre (“FIC”) under the South African Ministry of Finance. Stokvel Gold is registered with both the FIC and is an authorised member of SAAND.
You have several options for storage, including a home safe and a bank safety deposit box. Stokvel Gold also offers a storage service using A-grade high security premises.
Self-storage gives you direct control over your assets, but you are responsible for security. Stokvel Gold’s high security storage service comes at a fee, but offers professional security and your product is insurance from loss
Precious metals are a hedge against inflation and economic uncertainty. When other assets lose their value in a crisis, gold and silver maintain their value. This has been proven for over 5000 years of history. They are considered a "safe haven" asset that can hold its value when other assets are declining.
Precious metal prices can be volatile. However, unlike some other investments, they have intrinsic value. Many investors hold their metals for the long term and are not overly concerned with short-term price fluctuations.
While ETF’s do give you exposure to price movement in gold and silver markets, you do not own the physical metal, only a share in a fund that holds it. Physical bullion gives you direct ownership and control of the metal and eliminates counterparty risk.
When you buy, Stokvel Gold will require a copy of your national identity document. For companies and organisations, we will provide a list of FICA documents required that will confirm the identity of the organisation. Always keep the receipt from your purchase. This documentation is important for insurance purposes and for calculating any capital gains or losses when you sell.
Stokvel Gold will buy back the products we sell to you. You can also sell to other dealers or online. Gold and Silver are highly sought after metals, with a large number of individual and institutional investors ready to buy them at any given time.
Buying from Stokvel Gold or any authorised dealer is the best way to avoid scams. We also recommend that you educate yourself on gold and silver products and market. Be wary of high-pressure sales tactics and promises of guaranteed high returns.
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