Gold up North
January 7, 2009 2:15 AM Subscribe
What's the best way for an American Citizen to:
1. Buy Canadian Gold
AND
2. Secure it (store it) in Canada?
I would like to buy Canadian bullion and safely store it in Canada. Own the hard coins and keep them somewhere safe across the border where I can access them on demand, pure and simple. Since I haven't purchased them yet, I would appreciate advice on where and how to buy them and where to keep them. What are the tax/customs implications of buying in the US versus buying in Canada?
Thanks in advance.
I would like to buy Canadian bullion and safely store it in Canada. Own the hard coins and keep them somewhere safe across the border where I can access them on demand, pure and simple. Since I haven't purchased them yet, I would appreciate advice on where and how to buy them and where to keep them. What are the tax/customs implications of buying in the US versus buying in Canada?
Thanks in advance.
Best answer: The best place to purchase gold is in the state of California because there are no taxes on bullion purchases, if memory serves. This is why most spot-gold sellers are from there--I would dare say all just because there's simply no way to compete since the margins are so slim on bullion sales.
Most have minimum purchases of 5 or 10 oz. for free shipping, and on very large orders you can arrange a personal pickup. Keep in mind, this only goes for Platinum or Gold... Silver is just too heavy per dollar to be practical bullion, even though most dealers will sell it.
I'm a bit confused as to why you need them to be Maple Leafs. If you're only interested in the bullion value, it should make no difference whether they're Maple Leafs or Pandas or Kuggerands or Swiss bars.
posted by Civil_Disobedient at 5:08 AM on January 7, 2009
Most have minimum purchases of 5 or 10 oz. for free shipping, and on very large orders you can arrange a personal pickup. Keep in mind, this only goes for Platinum or Gold... Silver is just too heavy per dollar to be practical bullion, even though most dealers will sell it.
I'm a bit confused as to why you need them to be Maple Leafs. If you're only interested in the bullion value, it should make no difference whether they're Maple Leafs or Pandas or Kuggerands or Swiss bars.
posted by Civil_Disobedient at 5:08 AM on January 7, 2009
Best answer: Sorry, meant to add a dealer I have previously used: The Tulving Company. More about them, in case you're curious.
posted by Civil_Disobedient at 5:16 AM on January 7, 2009
posted by Civil_Disobedient at 5:16 AM on January 7, 2009
To follow up on Mutant's comment about HST, it's a combined GST/PST (federal/provincial) that's only in place in Newfoundland & Labrador, Nova Scotia, New Brunswick (and I'm not sure about) P.E.I. Since odds are that you'd need to be in a reasonably large locale for buying Maple Leafs, you won't be interacting with any of those provinces, so don't worry about the HST.
posted by Lemurrhea at 6:51 AM on January 7, 2009
posted by Lemurrhea at 6:51 AM on January 7, 2009
The best place to purchase gold is in the state of California because there are no taxes on bullion purchases
...if the purchase is over $1000. You'll still be paying a (2-3%) commission, however.
posted by Rash at 1:44 PM on January 7, 2009
...if the purchase is over $1000. You'll still be paying a (2-3%) commission, however.
posted by Rash at 1:44 PM on January 7, 2009
Response by poster: Thanks all for your excellent input/advice. To answer a few questions posed:
1. Live in Boston, can drive/fly North without too much trouble.
2. I just like the Maple Leaf coins, willing to pay a little bit more for them (as it seems the market is skewed that way). Is it true that uncirculated are just a little bit more?
3. Not buying too much, just a little hedge/investment, have never owned metals before. I'm thinking about starting with 10 ounces, maybe average in up to 20, 30+.
4. Probably paranoid/wrong thinking, but I'm concerned that maybe the US may not want citizens owning gold in the next couple years, so the little premium for owning it and storing it conveniently just out of the country might be a good move?
5. As it seems like California is the place to purchase the bullion from, do I have to "declare" anything at customs on the way up or the way back? I'm absolutely a play by the rules guy, but ala Mark Donohue, I'm always looking for the Unfair Advantage. Am I missing something thinking that having reasonably small bullion ownership stored in another country is pretty much OK?
If I can jam another question within a question, I'm also kind of keen on these bags of "junk" silver to keep at home. Thumbs up or thumbs down?
Thanks again!
posted by Rafaelloello at 5:43 PM on January 7, 2009
1. Live in Boston, can drive/fly North without too much trouble.
2. I just like the Maple Leaf coins, willing to pay a little bit more for them (as it seems the market is skewed that way). Is it true that uncirculated are just a little bit more?
3. Not buying too much, just a little hedge/investment, have never owned metals before. I'm thinking about starting with 10 ounces, maybe average in up to 20, 30+.
4. Probably paranoid/wrong thinking, but I'm concerned that maybe the US may not want citizens owning gold in the next couple years, so the little premium for owning it and storing it conveniently just out of the country might be a good move?
5. As it seems like California is the place to purchase the bullion from, do I have to "declare" anything at customs on the way up or the way back? I'm absolutely a play by the rules guy, but ala Mark Donohue, I'm always looking for the Unfair Advantage. Am I missing something thinking that having reasonably small bullion ownership stored in another country is pretty much OK?
If I can jam another question within a question, I'm also kind of keen on these bags of "junk" silver to keep at home. Thumbs up or thumbs down?
Thanks again!
posted by Rafaelloello at 5:43 PM on January 7, 2009
2. I just like the Maple Leaf coins, willing to pay a little bit more for them (as it seems the market is skewed that way). Is it true that uncirculated are just a little bit more?
Yes, and they will come in a small circular plastic box which is openable with a credit card or fingernail. My dealer in London charges about 5% to 10% more for these proofs, depending upon the metal and the particular coin.
4. Probably paranoid/wrong thinking, but I'm concerned that maybe the US may not want citizens owning gold in the next couple years, so the little premium for owning it and storing it conveniently just out of the country might be a good move?
Not paranoid at all, there is historical precedent to our concern. In terms of storing it outside of the country and specifically what to do if bullion ownership is ruled illegal - well that, my friend, is a rather delicate question indeed. I'd be in the same position, and I've got very large positions (physical and ETFs) with my broker so that ownership is indisputable and a matter of record. If I even got a whiff that the United States was going to outlaw private gold & silver ownership again my Dutch wife would rather suddenly become very, very happy. It wouldn't surprise me at all if the US outlawed / confiscated private ownership of bullion again, but if they do they damn well better pay a lot more than $300 / oz for gold and $8 / oz for silver.
5. As it seems like California is the place to purchase the bullion from, do I have to "declare" anything at customs on the way up or the way back? I'm absolutely a play by the rules guy, but ala Mark Donohue, I'm always looking for the Unfair Advantage. Am I missing something thinking that having reasonably small bullion ownership stored in another country is pretty much OK?
I think owning small quantities of bullion is very prudent. Placing those assets in a foreign domicile complicates things, especially so in your case as this act could only be construed as an attempt hide or otherwise secret your bullion. Keep in mind my previous comments about US Citizen residing abroad and the requirement to declare liquid assets on deposit. But double plus prudence if you can pull it off.
If I can jam another question within a question, I'm also kind of keen on these bags of "junk" silver to keep at home. Thumbs up or thumbs down?
I'm not totally sure what a bag of junk silver is (assuming cutlery and jewelry, yes?) but thumbs up if I'm reading you correctly. However I'd suggest having some items that will be more easily valued, should the shit hit it and you have to visit Bartertown someday.
To this end, I keep a combination of Aussie silver coins - some Kookaburras and other coins my dealer no longer lists. In any type of negotiation the value of these coins would be much less open to dispute than a largish silver chalice. For gold I like 1/10th oz Kruggerrands but I notice you can also get 1/10th oz Maple Leafs as well. You'll pay a little more by the ounce for the smaller coins, but they probably won't be making change in Bartertown.
If your dealer is anything like mine do a few smallish transactions first, get to know them and once you're comfortable go in large. On silver proofs I've been able to negotiate discounts of about 5% to 6% or so (depending upon when I've bought) by asking for one when purchasing in excess of 25 oz at a time. Those who ask get, yes? By contrast the gold market seems tighter, I've never been able to get as large a discount.
Yeh, good on you for thinking of keeping bullion in close physical proximity. I moved about one third of my brokerage assets into bullion in 2004/2005, but only last year starting seriously purchasing physical.
posted by Mutant at 12:43 AM on January 8, 2009
Yes, and they will come in a small circular plastic box which is openable with a credit card or fingernail. My dealer in London charges about 5% to 10% more for these proofs, depending upon the metal and the particular coin.
4. Probably paranoid/wrong thinking, but I'm concerned that maybe the US may not want citizens owning gold in the next couple years, so the little premium for owning it and storing it conveniently just out of the country might be a good move?
Not paranoid at all, there is historical precedent to our concern. In terms of storing it outside of the country and specifically what to do if bullion ownership is ruled illegal - well that, my friend, is a rather delicate question indeed. I'd be in the same position, and I've got very large positions (physical and ETFs) with my broker so that ownership is indisputable and a matter of record. If I even got a whiff that the United States was going to outlaw private gold & silver ownership again my Dutch wife would rather suddenly become very, very happy. It wouldn't surprise me at all if the US outlawed / confiscated private ownership of bullion again, but if they do they damn well better pay a lot more than $300 / oz for gold and $8 / oz for silver.
5. As it seems like California is the place to purchase the bullion from, do I have to "declare" anything at customs on the way up or the way back? I'm absolutely a play by the rules guy, but ala Mark Donohue, I'm always looking for the Unfair Advantage. Am I missing something thinking that having reasonably small bullion ownership stored in another country is pretty much OK?
I think owning small quantities of bullion is very prudent. Placing those assets in a foreign domicile complicates things, especially so in your case as this act could only be construed as an attempt hide or otherwise secret your bullion. Keep in mind my previous comments about US Citizen residing abroad and the requirement to declare liquid assets on deposit. But double plus prudence if you can pull it off.
If I can jam another question within a question, I'm also kind of keen on these bags of "junk" silver to keep at home. Thumbs up or thumbs down?
I'm not totally sure what a bag of junk silver is (assuming cutlery and jewelry, yes?) but thumbs up if I'm reading you correctly. However I'd suggest having some items that will be more easily valued, should the shit hit it and you have to visit Bartertown someday.
To this end, I keep a combination of Aussie silver coins - some Kookaburras and other coins my dealer no longer lists. In any type of negotiation the value of these coins would be much less open to dispute than a largish silver chalice. For gold I like 1/10th oz Kruggerrands but I notice you can also get 1/10th oz Maple Leafs as well. You'll pay a little more by the ounce for the smaller coins, but they probably won't be making change in Bartertown.
If your dealer is anything like mine do a few smallish transactions first, get to know them and once you're comfortable go in large. On silver proofs I've been able to negotiate discounts of about 5% to 6% or so (depending upon when I've bought) by asking for one when purchasing in excess of 25 oz at a time. Those who ask get, yes? By contrast the gold market seems tighter, I've never been able to get as large a discount.
Yeh, good on you for thinking of keeping bullion in close physical proximity. I moved about one third of my brokerage assets into bullion in 2004/2005, but only last year starting seriously purchasing physical.
posted by Mutant at 12:43 AM on January 8, 2009
Response by poster: Not being up on the proper metals vernacular, when I referred to bags of junk silver I was thinking of these pre-1965 bags of dimes and quarters:
here and here, for example.
posted by Rafaelloello at 5:53 PM on January 9, 2009
here and here, for example.
posted by Rafaelloello at 5:53 PM on January 9, 2009
Is it true that uncirculated are just a little bit more?
No, they are quite a bit more. When you think of bullion you have to think about this in terms of raw value—you want to get the greatest quantity of the metal that you can afford. The price you see gold trading for is an imaginary number. The real price is how much you end up paying after all the bullshit (where bullshit is defined as any additional charges including, but not limited to: dealer commission, shipping & handling, perceived collectibility, etc.). You want to keep that bullshit number as low as possible, because every dollar that's going to bullshit isn't going to the raw weight.
Not buying too much, just a little hedge/investment, have never owned metals before. I'm thinking about starting with 10 ounces
Think of it this way: would you rather have 10 Maple Leafs or 11 Whatever-the-Hell-as-Long-as-it's-Gold?
Probably paranoid/wrong thinking, but I'm concerned that maybe the US may not want citizens owning gold in the next couple years
Agreed with the paranoid/wrong thinking (despite the historical precedent Mutant mentions). In this day and age, the logistics of the U.S. government prohibiting ownership of precious metals is so mind-bogglingly vast that it stands to reason that any crisis (economic or otherwise) large enough to warrant such action would likely mean that you'd probably be better off hording canned goods and potable water than shiny, extremely heavy bricks.
I'm also kind of keen on these bags of "junk" silver to keep at home. Thumbs up or thumbs down?
If only I had a third hand so I could give 'em three thumbs down. Silver is bad enough as a store of value (not because there's no demand, but because there's so much supply available). Junk silver might as well be shares in a silver mine—except, instead of being trapped in ore, it's trapped in a coin. The price you see for this "junk" reflects this (actually, it's a bit worse, since you're presumably paying a slight premium for the numismatic value of the coin).
Personally, I think silver bullion makes about as much sense as carrying around a hundred $1 bills in your wallet.
posted by Civil_Disobedient at 7:09 PM on January 10, 2009
No, they are quite a bit more. When you think of bullion you have to think about this in terms of raw value—you want to get the greatest quantity of the metal that you can afford. The price you see gold trading for is an imaginary number. The real price is how much you end up paying after all the bullshit (where bullshit is defined as any additional charges including, but not limited to: dealer commission, shipping & handling, perceived collectibility, etc.). You want to keep that bullshit number as low as possible, because every dollar that's going to bullshit isn't going to the raw weight.
Not buying too much, just a little hedge/investment, have never owned metals before. I'm thinking about starting with 10 ounces
Think of it this way: would you rather have 10 Maple Leafs or 11 Whatever-the-Hell-as-Long-as-it's-Gold?
Probably paranoid/wrong thinking, but I'm concerned that maybe the US may not want citizens owning gold in the next couple years
Agreed with the paranoid/wrong thinking (despite the historical precedent Mutant mentions). In this day and age, the logistics of the U.S. government prohibiting ownership of precious metals is so mind-bogglingly vast that it stands to reason that any crisis (economic or otherwise) large enough to warrant such action would likely mean that you'd probably be better off hording canned goods and potable water than shiny, extremely heavy bricks.
I'm also kind of keen on these bags of "junk" silver to keep at home. Thumbs up or thumbs down?
If only I had a third hand so I could give 'em three thumbs down. Silver is bad enough as a store of value (not because there's no demand, but because there's so much supply available). Junk silver might as well be shares in a silver mine—except, instead of being trapped in ore, it's trapped in a coin. The price you see for this "junk" reflects this (actually, it's a bit worse, since you're presumably paying a slight premium for the numismatic value of the coin).
Personally, I think silver bullion makes about as much sense as carrying around a hundred $1 bills in your wallet.
posted by Civil_Disobedient at 7:09 PM on January 10, 2009
This thread is closed to new comments.
- Travel to Canada periodically, purchase the metal yourself and store in a safe deposit box or other secured facility. Pros: You know precisely what you've purchased, have personally vetted and stored it. Cons: time consuming and perhaps expensive. Considering the sums involved, perhaps risky as well, especially so if you personally take delivery of, hold and transfer large amounts of bullion. Also, I'm not sure about Canadian laws but here in the UK if you purchase more than £10K worth of physical bullion per year HM Customs & Excise get interested.
- Retain a Canadian Solicitor to perform this service. Pros: Time & expense of traveling is eliminated. The involvement of a third party may enhance the transactions confidentiality. Cons: Counterparty risk, in the form of the third party. Also the involvement of the third party may actually increase government interest due to anti money laundering provisions.
Any reason why you've selected Maple Leafs? This is a very tight physical market, and bullion in any form is very, very difficult to come by.I've got a fair amount of physical that I keep close to me (bank lock box) and during Q4 2008 it was almost impossible to get bullion here in London. I ended up with a mixture of Krugerrands and Aussie Kookaburras solely because these coins were all my dealer could source. If the local market in Canada is anything like it is here in London you won't be offered the luxury of being very selective.
Taxes: well, if you source in Canada you'll be required to pay taxes there. I'm by no means an expert (please consult one!) but coin sales in Canada are taxed country wide at the provincial level (except for Alberta which, IIRC doesn't have such a tax), while bullion (i.e., bars) are sometimes free of such taxes. There is something called Harmonized Sales Tax, or HST, that in some circumstances supplants tax at the Provincial level (perhaps a Canadian MeFite can clarify). The last I'd heard, bullion (regardless of form) is exempt from GST or Goods and Services Tax but again, consulting an expert is recommended, especially so if the sums considered are large.
Don't be afraid to call a few dealers and ask about these issues; they will be very helpful and they've heard these queries before.
Sourcing in Canada and importing to the United States would require some paperwork at Customs. There are brokers that can handle this (for a fee) but again consult an expert.
Finally US side paperwork; American Citizens residing abroad (I'm one) are required to report to the US Treasury funds on deposit held in our name. I'd be very surprised if they would allow resident Americans to hold highly liquid assets such as gold outside the United States without reporting. Once again, the size of the sums are key. $10K or so is likely to escape such scrutiny, however I'd suspect the further north of $100K one goes the more attention such transactions (in aggregate) will attract. Best to be squeaky clean at that point.
Interesting question; thanks for raising it. I'd like to hear more about the taxation issues myself, so I'll be watching the thread.
posted by Mutant at 4:14 AM on January 7, 2009 [4 favorites]