Want To Buy Gold in Harrods?

Most of Harrods’ customers are so unbelievably rich that paying high premiums on the purchase of gold bullion wouldn’t bother them in the least. But for anyone who is not so rich, Harrods is an extremely expensive place to buy gold and they would find it very easy to get a much better deal in Hatton Garden or the bottom of Charing Cross Road where there are two small shops close to the National Portrait Gallery.

I was there yesterday and found the downstairs gold shop to be rather dark. There was an old style casino or bank teller’s cage and to its left, at a height which wasn’t exactly convenient, was a modestly sized display case with very thick glass i n which all the various items of gold Harrod’s sold were on display. They were not easy to see and the whole place had rather a sterile and uninteresting atmosphere. In fact, I didn’t think the man behind the bars would be impressed if a customer asked to see and maybe even handle some sovereigns or krugerrands before deciding whether or not to buy some.

Nevertheless, here are the figures to show that only the rich can afford to buy gold in Harrods.

With a spot price of £689.75 Harrods charges £194 for a sovereign which equals a premium of 19.4% and added to this there is a surcharge of £20 for people spending less than £5,000. This would make the purchase of a single sovereign £214 or a gigantic premium of 31%!!!

Krugerrands, Maple Leafs and Britannias cost £765 which is a very high premium of just over 11% with the added £20 for any purchase of less than £5,000.

A single gram ingot costs is £31 which is a 39% premium (not counting the extra £20) while a 5 gram ingot is $127 which is a 14% premium - again not counting that horrible £20 charged to those who are not big spenders and therefore shouldn’t be buying anything in Harrods anyway.

However, it seemed to me that a one ounce ingot at £745 cost quite a bit less than a Krugerrand but then a gold ingot isn’t generally as easy to trade as a gold coin.

Also, anyone paying with a credit card will be hit with a 2.5% surcharge which is considerably more than credit card companies charge Harrods for the transaction.

Finally, and perhaps most importantly, it should be remembered that despite the extremely high profit margins and despite the fact that Harrods proudly claims to accept debit and credit card payments of up to £99,999.99p; there are, you should note, no Harrods' reward or loyalty points for buying gold in Harrods. (Outrageous!)

---December 19, 2009---

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