What makes a bullion round collectible?? Is it because the dealer/mint says it is or markets it as such? Is it because it has a limited mintage? Or is it deemed collectible by demand/market and secondary market?
Artistic value. The new kook is a beauty. Might buy a one kilo and keep it on the mantelpiece as a piece of art.
who knows what makes it stuff collectible, i brought a 10 oz bar.. (can't remember the brand at the second) .. royal maybe? a flat style 10oz thing.. it was the lowest premium at the time, i sold it on to a friend who wanted to get into silver, cos it seemed out of place with my stack, i sold it as a low premium.. soon after i saw one sell for like close to double spot. kinda kicking my self, but thems how the dice roll. \
Depends whom you ask. Many stackers are not really collectors and so to them, buying a higher premium bullion round boils down to two significant concerns. For these stackers, hype is the main driver whether or not to buy a particular product. Secondly is flipping potential. For me, quality of design (which includes things like aesthetic appeal and what message is being presented) is generally highest priority on my list in terms of buying a bullion round for collecting purposes. My favorite silver rounds come from a new series from Elemetal Mint, the American Landmarks series. They're 2 oz each of silver stuck in ultra high relief with a proof-like finish. The designs are kick ass especially the most recent release, Liberty Island..... .
OK, so it seems the Market - customer - consumer - investor - collector, decides on weather a piece of bullion is collectible based on various factors?
Here's how I see it: I would say the individual ultimately decides for him/herself what is and what isn't collectible. Collectively, individuals make up "the market" and if enough individuals find certain bullion rounds appealing (for various reasons), then it could be argued to some extent that "the market" favors certain rounds over others. But "the market" is never, ever unanimous (of one mind) in its opinions. And, what "the market" favors today it could be sour toward next year. Additionally, "the market" here in the U.S. is a different beast than "the market" in Australia....which is different from "the market" in England....which is different from "the market" in China.....and so forth and so on. For example, "the market" here in the States just a few short years ago was very hot toward Chris Duane's SBSS bullion rounds. Then, nearly a couple of years ago a kerfuffle broke out between Mr. Duane and the mint producing his rounds, each side blaming the other for the problems. In the end, both the mint and the SBSS series of rounds suffered. So, hot as heck one year and not so hot the following year. Individuals collectively lost some/a lot of interest in the series from what I understand. The SBSS series was only big in the U.S. from what I gather. I hope this clears up a little about what makes a bullion round collectible.....ultimately, various reasons individuals have toward liking a product. .
I don't think there is a clear formula, I think people just like 'new' things, maybe the opportunity to make some money in the future. What makes a collector buy a whole tube or roll of rounds? If they like the design they only need one. Proofs etc. I only have one of each that I like, but Bullion I tend to throw a couple of each type in when I buy. I hope to offset the cost of my hobby by selling the extras in the future, maybe. Fashions come and go, this year it was skulls wasn't it? I think the true collectors are the people who are trying to get one of each type of a certain series, they don't care how much they have to pay to get the last round they need for their set, they just want to complete the set. I am a recovering collector.
What makes them collectable is the collector nothing else! I would never have believed I was a collector of anything until I started stacking silver! But you have to be realistic, I may pay on the odd occasion $40-$50 au per ounce of pretty pretty that takes my fancy but I realize its only ever going to be worth buy back or spot price unless somebody else wants it or has to have it.
right, our goods are only as valuable as someone else is willing to pay. period, end of story. At the end of the day, a 3,000 1 oz silver chinese medal (i.e. 1985 Great Wall Error Medal) is a hunk of silver worth 14.00 (spot). But people are willing to pay 3K for rarity, history, error, etc...in the future they pay much more than 3K or a lot less than 3k. who knows the ways of man/woman. I sure don't. )
Going by the logic that something is worth only what someone is willing top pay would mean not only are collector items only worth what someone is willing to pay you, but any silver blob is only worth what someone is willing to pay and if no one wants to buy it, it's value is zero. People might not buy your silver blob even if it's priced at spot. I'd argue there are different ways to value a coin/medal/round. One way is to say that it's worth only what someone is willing to pay for it. Would I value today an old rare silver coin my grandfather gave me at $15 USD if that's all someone is willing to pay me for it? Probably not. So what someone is willing to pay for something is NOT the only way to assign or attach a value to a coin/medal/round. There are millions of silver coins and blobs that go unsold every single day at eBay, various auction houses, and coin and bullion dealers around the world because the sellers value their products in a different way than the buyer does. .
Guess it depends on the definition of "bullion". In Australia the ATO has a definition which affects the GST status, AUSTRAC has a different defintion which affects the AML/CTF status, and they don't exactly match. For the ATO, there's a pretty widely known set of characteristics that specify whether something is or is not "precious metals for investment purposes", which are related to recognition and purity. http://forums.silverstackers.com/to...ly-for-a-private-gst-ruling-from-the-ato.html For AUSTRAC, they don't give a rats about the GST status, but they do care about the purity - anything over 9166 fine (which is 22k if gold) is bullion in their eyes, whereas the ATO only considers it "precious metals for investment purposes" if it's over 995 purity. I guess a little known technical loophole is that sales over $5000 of 1966 50c rounds may not be a designated service (but still liable for GST as they don't meet the ATO's fineness requirements). I don't know of any dealers that give this exemption though. Similarly though sales of over $5000 in Back To The Future proofs would not be a designated service, so no ID, but definitely a GST event. http://www.austrac.gov.au/definitions-and-examples-common-designated-services#bullion As a dealer we run into this issue occasionally - for example when the 2015 Pandas were minted, they lacked any weight or purity marks, which created concern that they did not pass the "bears a mark or characteristic accepted as identifying and guaranteeing its fineness and quality" test - however the ATO issued a private ruling stating that the "characteristic" test was passed as they were a legal tender silver coin that dealers would recognise as being of a published weight and purity, so if a dealer accepted that the 10 marking and correct dimensions identified the coin as a 1 troy ounce 999 fineness silver coin, then the characteristic test was passed. This kind of supports the case for ASEs to be GST free, even though they only say "FINE SILVER" with no specified purity. Gold eagles on the other hand fail the purity test, so they are a GST item - but they're not really collectible are they, they are the most heavily traded gold investment coin in the world. But as far as the ATO is concerned, not pure enough, therefore GST applies. Other questions get raised over things like the value of Perth Mint kookaburras that often sell at premiums well over spot. I've discussed this within the industry - the consensus is that if an item was created as an "input taxed supply" as these coins are, then they get sold as input taxed supply, as long as they still meet the test "is usually traded at a price that is determined by reference to the spot price of the metal it contains". This does not mean "traded at or near spot", but "traded in reference to spot". The Perth Mint at time has sold Kookaburras, GST free, at a premium higher than spot. GST was introduced in Australia on 1st July 2000, and until a few short years ago, Kookaburras were always sold at $10 AUD over spot, and have always been sold GST free. See http://www.perthmint.com.au/investment_invest_in_gold_precious_metal_prices.aspx - at EOFY, silver have ranged in value from $6.80 to $9.28 AUD - while the premium was $10, so for five years or so, The Perth Mint likely sold Kookaburras at a price at least double spot, without GST. So if a government owned mint has a track record of selling GST free silver coins at a premium of almost 150% of spot, then I don't think there's an issue with high priced silver bullion coins being sold GST free, particularly if they originated as input taxed supply. If they were to be sold at a fixed price however, then you lose the "reference to spot" characteristic, and they would be GST items. Bit of a sidetrack, but to bring this post back onto answering the original question of what makes a bullion round collectible, I would look to the following tests as a dealer in precious metals to determines whether I need to charge GST or not, which for me as a dealer is the commercial test of "investment form or not", which almost, but not quite, correlates to "collectible or not". 1. Is it a proof? Then yes, collectible, requires GST. 2. Is is below the ATO's purity requirements? Then not an investment form in the eyes of the ATO, and requires GST. 3. Is it below AUSTRAC's purity requirements? Then not an investment form in the eyes of both ATO and AUSTRAC, requires GST, but may be a non-designated service. 4. Is it part of a set? Not a definitive test - Perth Mint has the Lunar series, from which sets can be created, yet these are GST free. 5. Is it sold in original packaging beyond a basic sleeve/capsule and COA? Yes, it's a collectible - if an otherwise bullion coin comes in a clamshell or presentation box, regardless of the finish, it's a collectible. 6. Is it sold at a fixed price? Not definitive, depends if the "fixed" price gets updated as spot moves - a dealer that advertises a 1oz silver coin at $30 when spot is fluctuating around $20, but adjusts the price up or down relative to spot occasionally (say only every $2 in spot movement) could argue that they are selling "relative to spot" with a slow update interval, but a 1oz silver coin that is advertised at $50 flat price when spot is $20 or $16 or $24 and never changes the price is a collectible, and likely should have GST charged. There's nothing that says prices have to be floated against market spot that's less than 1 minute old etc, that has only arisen because of the internet and competition. Once upon a time gold and silver were simply priced according to the latest fix price that might be hours old, and that was the price for the day. 7. Is the mintage limited up front? Not a definitive test - Perth Mint regularly limits the mintage of GST free bullion coins such as 1oz gold and silver lunars, and 1oz Kookaburras. But if the mintage was extremely low, resulting in a lack of market recognition, was this deliberate? Mintage could be low because of lack of demand (like any of the rare Perth Mint lunar coins, some have mintages in the hundreds or even fewer), but if the mintage was deliberately restricted to a quantity that could not allow reasonable trade as a bullion item, and was hyped as a marketing point, then that would make the item collectible, and require GST. But if the mintage is tiny as a result of market forces (i.e. demand did not warrant subsequent mint runs) then that's not an intentional restriction, and in my mind would not make it automatically GST eligible. So this is a question of intent - was the upfront limited mintage created because of production scheduling ("ok, so we'll knock out 300,000 Lunars, that should be enough for the market, and then we can meet any remaining demand with unlimited Koalas") or to deliberately create rarity ("ok, we'll only knock out 500, people will fall over themselves to buy them")? 8. Marketing - is the item marketed as a collectible? One could argue this applies to almost every bullion coin and round as dealers need to market product - but if the coin or round is not "generally available" for investment purposes, and is only sold as a hyped collectible, then it probably falls into the collectible category. Think Silver Bullet Silver Shield - hyped as a collectible series by the creator, but sold by the fabricating mint as a bullion item, and readily available in bulk tube/monster box quantities at bullion prices, so not a collectible from a GST perspective - it was still generally available for bullion investment purposes, and still circulates today as "bullion" rounds - I know we've sold plenty of buybacks through our low premium category, they're just another 1oz silver round to turn over. If they had been artificially limited and promoted as an item to buy just 1 of (e.g. through dealer restrictions), then they would be in a very grey area. Proofs for example were sold with GST - these had a number of characteristics as collectibles with limited mintage, proof finish, display box packaging, certificates, limited distribution, fixed pricing - but the bullion rounds of the same design were unlimited mintage and sold for normal bullion premiums. 9. Is the margin over spot excessive? Not a definitive test - see the Perth Mint's $10 over spot Kookaburra example. As long as it moves "in reference" to spot, then no, not likely a collectible. 10. Is the item already being sold elsewhere with or without GST? Generally the industry follows a bit of group think here - if the widespread consensus is that the item is being sold without GST, then it's not a collectible, it's bullion. The trouble with all of these tests is that many are subjective. If someone came to me with an otherwise bullion round in a clamshell and COA with an upfront fixed mintage at a fixed price, I would call it a collectible - if someone came to me with exactly the same design, but as a high volume mintage bullion round available in bulk without the packaging for spot plus X, then it's not a collectible. Anything in between is subjective. Note that not once does the design or legal tender status of an item come into question in determining the GST status of an item - thousands of different design bullion rounds have been an internationally recognised investment form, particularly for silver, for many decades. A particular case I can think of recently - RCM's "$20 for $20" coins - these are 9999 silver coins in a capsule with COA, with mintages of 200k to 350k. Set weight and purity, readily available - but there are GST implications. They are sold at a price NOT in reference to spot - they have a fixed face value of $20 CAD, and a silver content value much lower - RCM sells the coin for $20 CAD. So they fail solely on "in reference to spot" test, and they would need to be sold with GST in Australia. An alternative way of "selling" these coins would be as a foreign exchange transaction with a commission - so the price would be a variable price in AUD depending on the AUD/CAD exchange rate, and the dealer's markup would be the "FX commission" - this would generally mean GST only on the FX commission component. But forex is it's own AUSTRAC designated service with it's own set of rules and regulations, so unless a bullion dealer is also a registered forex dealer, they cannot treat selling them as a foreign exchange transaction. So they fall under the collectibles heading from a bullion perspective, and are slugged with GST.
Thanks GP. So with our series of dissent we limited the mintage to 8888oz on the premise that we would be lucky to sell 500oz due to the high premium over spot, we figured because of the high production price people would buy 1 or 2, not bulk amounts like what we get with generic bullion at say $3-$4 over spot. The reaper sold about 1500oz and is still available. World leaders sold about 650oz and is still available. Too big to fail is somewhere under 500oz and still available Recycle is somewhere under 500oz and still available. Even the double obverse is under 500oz and still available. So we are no - where near our mintage limits 2 years later. If we look at the Perth mint Wedge tail eagle 2014, with a max mintage of 50,000, but only 5000 being made available to the Australian public, with the rest going off shore (now highly collectible), was the number of 5000oz available to Australians freely available? While the perth mint has much larger limits, being a global power house compared to a start up like SGB, would you say our rounds are freely available even with a 8888oz limit?
What makes a bullion round collectible?? I'm not keen on them at all. Depending on the time period, (Buy - Sell) your favourite bullion round could be a forgotten piece of history. For those who just want to stack, perhaps well known coins and bars are a better option, especially for folk who have just entered the precious metal market. Having said that, if folk want to collect rounds..."fill-ya-boots" some of the rounds have seen very good price rises, some not so well. Having said that if I were to buy a round...design, quality of the strike and a limited mintage would be some of the considerations.
I believe the 5000oz was only offered to a single Perth Mint distributor, however it was then offered for sale to the public through their website. I know Perth has been pretty consistent with the party line of "they are bullion coins, not numismatics" whenever quality concerns arise with bullion releases, but they are participating in a global market where most countries don't have GST concerns when they put a bunch of pretty pictures on different coins in the same year - some of their bullion releases are considered collectible by the end buyers. I imagine their thought process is that they are minting investment silver for worldwide demand rather than catering specifically to the Australian market, but there's the question of "why make more than 1 design per year?". Because they're participating in a global market that demands variety. So at what point do Crocodiles with a mintage of 1 million go from being bullion to numismatic? They are an in-demand item now, when at one stage dealers were inundated with supplies that couldn't get turned over fast enough. The issue with GST on precious metals today in Australia is that there is a subjective element as to whether or not it should be applied to some items - people will collect *anything*, heck, even ordinary 1oz blobs of gold have a collector following, so the market can assign a collectible status on an otherwise ordinary piece of precious metal in an investment form, even if the maker did not intend it to be collectible. At what point do you start charging GST on an item that meets every other requirement to be input-taxed? Look at some of the Perth Mint lunar mintages, they're lower than what you're quoting for your Dissent series. They were sold GST free. Is a 10kg Lunar Dragon silver coin with a mintage of 200 really an investment form? They had no GST.
