I havent sold any scrap gold for a while and went to see the prices at the usual gold buying houses. Some used to buyback at spot plus about 7%. The effect of the GST etc. Now I see gold is about AUD 50/gram and most gold buyers are advertising prices around $47 to $47.50 / gram which is about spot less 6%. So going from spot PLUS 7% to around spot LESS 6% is a 13% reduction in the buyback price of spot gold. Is there any reason for this? Curious to know why the sudden and dramatic change.
Im not really into the scraping business, but why would anyone pay 7% over spot for scrap gold when most of the 9999 gold from bullion dealers are less than 7% over spot
Thanks Bullion Barron. I dont quite follow however. If the GST law remains unchanged, then the gold buyers will still be claiming their 10% input tax credit therefore the buyers have simply upped their profits by 13%? Or are the scrap gold buying companies no longer claiming a GST input credit even though the law entitles them to do so? It seems quite odd if the law says the gold buyers can claim a GST credit but the gold buyers would choose not to do so?
Dealers buying gold for spot + 7%, i smell porkies and they always seem to be from members who have just a few posts. The only surprising aspect of your comment is that you did not claim to scrap 100k worth of gold each month, but i dare say that was coming
MAK Precious metals in Collins St Melbourne used to buyback scrap gold at about 7% above spot. They are now 6% under spot. W Davis is still advertising buying gold at about spot +2%.
The only reason a dealer now would pay above spot is because they plan to sell it as jewellery. If a dealer tried to claim scrap lol, they would want to make sure it didn't run foul of ATO smell test and bulldozer.
All this hubbub about the GST rip off of bullion being palmed off as scrap to attract the 10% GST input credit is nothing new. Here's an article I found from 2014 about GST on scrap/bullion. I guess something must have happened between now and July when I last sold scrap gold to the bullion dealers in the OP I mentioned who paid spot +7%. http://www.smh.com.au/national/rive...xpayers-an-estimated-200m-20140712-3btv8.html
I dont know about that. Buy $100 worth of scrap gold for $107, receive your 10% lawful tax credit thus in reality you get $110 for the scrap gold and you have made a $3 profit or 3%. Governments and big corporations are masters of manipulating a system (a system they actual rig in favour of themselves as they write the laws) but when others lawfully use the laws available for their own gain suddenly you get the AFP/ATO involved simply because these powers that be "dont like it". Well if these powers dont like it, they can go to their political masters and have the law changed. Till then I see no reason why a person buying scrap gold and operating within the law has anything to fear. Palming off bullion as scrap on the other hand is of course tax fraud and is not what Im referring to here.
The powers that be don't like it. Basically because dealers were rooting system. Basically buying pure gold bullion at 3% premium, scrapping it and pocketing the gst refund. 100% with you, Do it legitimately, document it, alll good. Do it like a crook and get burnt.
