Going to China... considering gold investment... nervous...

I have the unfortunate timing of getting into gold investing while preparing to leave for a long-term work assignment in China, and am extremely concerned about the fraud going on (e.g. tungsten), and all that goes with it.

From what I'm learning, the bigger bang for the buck comes in quantity dealing, and some of the best values I'm seeing are for bars weighted at 1kg, or higher; then again, the larger gold pieces are also susceptible to more risk (tungsten-filled), but I want to acquire with best possible margins.

Like any investment, I accept gold investment isn't a method of getting rich quick, but my real and equity investments are beginning to bore me. It was fun at first, then you start to run out of things to learn. I simply find this stuff fascinating, and it doubles as a way to know a great deal about what I'm investing in, so it's less likely I'll get ripped-off.

...but alas, I'm a noob, and feel there are things that are going to go right above my head in the arena... at least while I'm still learning.

My other concern is that in a best-worst case scenario, I'll get a real 999.9 piece, but it's stolen, so I won't be able sell it, or it will be confiscated, or something to that effect. What happens? What kind of authentication/ownership document(s), if any, do I need to insist on from a seller/broker?

I know, I know, work with a reputable dealer... but their margins aren't worth the time, and I find after I've studied a commodity, I tend to thrive... but I have to start SOMEWHERE!

Is there, perhaps, a checklist of some sort to go by?
Is it too much to demand the seller to cut the bar? Is it even feasible?
Can I do it myself, then recast the bar? If so, where do I have it recast?
Ideally, I'd love to be able to make arrangements hold payment in escrow, cut the bar to be SURE, if it is in fact genuine, release payment, recast the bar, and be on my way.

What is a reasonable demand?

Please don't flame me. Any feedback is GREATLY appreciated. Thank you for reading.

 

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If you could buy directly from the Chinese mint that might be a good idea.

 

So, simple, you want a way to get into gold cheaply but with no risk...let the rest of us know if you find that way.

 

You'll have to find out how much a refiner will cost to melt and recast the bars and how much the escrow service will be. Then determine if you'd actually be saving much money.

 

I'd imagine those that are willing to invest ~$40,000 on a singe transaction would devise methods of protecting their interest, even at the cost of ~40k to prevent 1 prospective fraudulent transaction, thereby, breaking even, and come out ahead thereafter.

One of those possible resources might be GE's Phasor series ultrasonic flaw detectors demonstrated here: ,

...or further disclosed here: http://www.ge-mcs.com/en/ultrasound/portable-flaw-detectors/phasor-series.html

Anyone have experience with the product? Are there any flaws GE is NOT considering that destroys their proposed solution?

Thanks.

 

No service fee for escrow through private bank, so non-issue. Problem is getting the seller to agree to this stuff. I'm plainly admitting my ignorance in this field. For all I know, a seller might think I'm nuts; then again, they may understand given the investment risk.

If I'm to melt and recast, and I'll be doing this long-term at high quantity, I'd at least have to consider bringing the process in-house (figuratively speaking).

With the market the way it is (or at least is being reported as), spotting a handful would render an ROI over a conservative 10-year spread.

I'm curious who else may be buying at certain levels that may already be doing this, or has some other arrangement for mitigating risk.

Surely, I'm not the first person consider these options.

 

...all of these ideas also completely pisses on the branding and serialization of the bar, or otherwise authentication by imprint of origin.

Does recasting violate the right to hold and/or future sale? How is ownership determined? A before and after pic? Not trying to be a wise-ass, but I'm finding these questions difficult to answer, hence my presence here.

Thanks.

 

Only a [ insert word ] would, IN HIS WILDEST DREAMS, consider buying gold bars in China and trying to get them home. Quit trying to beat the system for 5%. Buy gold here, stick it in a SD Box, and just forget about it. This is not a flame; it's straightforward advice.

By the way, a big bar is (in my opinion) the very worst way to buy gold. You have to prove to somebody at the other end that it's really gold, there's no way to use a big bar in commerce (the whole point of buying gold), and buyers down the line will have all your qualms and more.

Also, unlikely, but if the U.S. and China get into a trade war, when you return, there may be an import duty on Chinese gold.

Buy Eagles or Maple Leafs in the U.S., figure out how to avoid generating a 1099 and paying sales tax (a 7% LOSS off the top), and they are bullion coins that are recognized worldwide.

 

Although some may disagree, I think the freedom of bullion exchange in China is vastly over exaggerated except in the Shanghai -Hong Kong regions. Mainland ( such as Bank of China) continues to maintain tight reign. Search out Bank of China supposed Bullion accounts where the citizens put their cash in an account booked as gold bullion. Except if and when they close the account, they don't get gold, they get paper. I am surprised some US bank doesn't try it for I am sure it would sell

 

That's all we need, our crooked, greedy banks dabbling in gold, and loaning out YOUR gold to fifty different additional crooks. A safety deposit box is bad enough. Did I read that the locksmith's son married the Bank President's daughter?

And they spent their honeymoon in the vault??

 

There are tons of reputable places that will hold your gold. I know that you can set up accounts with Perth Mint, Suisse Gold and other places that will hold your goods in their vaults or just set up an account and mint to order when you take delivery, IE the 2 I stated, so you don't have to try to buy in large and less liquid items like kilo bars or comex deliverable size bars.

 

just cut thate in half call it a day/...lol

 

???

 

The problem with the Chinese ant foreign market Gold is the fact that the company that is holding a goal to canno be responsible for fraudulent bars

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I would echo others. First, why do most people want to buy gold? Most people wish to have an asset that can protect against inflation and most wish to eliminate counterparty risks to their assets. Well, gold is a decent asset to protect against inflation. For counterparty risk you need to take physical possession, and keep physical possession. Buy gold and put it in a sdb. As to type of gold, I strongly agree buying 1 ounce coins from a reputable US seller. You say you want to get the best deal, I appreciate that, but the way you are going about it you are SERIOUSLY risking getting burned.

About a year back a guy came here asking us about a silver bar he bought on Craigslist. No markings, but he thought it tested for silver. So he spent $500 to "get a great deal" and today he owns a stainless steel bar basically valueless. Many times in life the cheapest price is not the best bargain, and this is one of them. Its MUCH MUCH MUCH more important to be assured the gold is real, and people you may sell to in the future are sure its real, than trying to beat out the last 5% price.

If you were STILL serious, I would say Dubai is where you should go. Dubai is the world's default selection for physical gold for large purchases from what I have heard. I have friends who live a lot closer to China than Dubai but fly to Dubai every couple of months to make their gold purchases. But, that is a game for professionals, not amateurs.

I hope you do not take this as a flame at all, but just go to www.comparegoldprices.com, choose one of those dealers, and buy reputable gold coins from reputable dealers. You are overthinking it sir. Btw, I have no affiliation with that website, I simply use it to quickly compare prices on common gold bullion items.

 

Medoraman sez what I sez, but he sez it nicer.

 

I am not always a cold hearted SOB some people here think I am.

 

I concur with Doug and Medoraman. As I read your initial post, I was thinking of all the things I was going to type, but they beat me to it. Refer to Doug and Medoraman for my thoughts.

 

Is gold really that cheap in China? How much is it?

 

Here's a 2013-2014 chart from the Shanghai Gold Exchange. You can see the premiums (over international prices) were briefly in the 3% range about one year ago, but they have since moved toward "zero," and are currently flat, due to high inventory levels among Chinese banks and other sellers.