Warning over gambling with Mandela coins

Cape Town - Buying a Mandela medallion to make a quick buck could cost you dearly, SA SA Gold Coin Exchange chairperson Alan Demby told Fin24.

Demby was responding to a query by a Fin24 user who felt cheated after taking a R40 000 gamble.

"I bought a 1 ounce Mandela Liliesfontein coin through SA Gold Coin Exchange about 2.5 years ago as a bit of a gamble", the user said.

He was under the impression that the coin could be sold back but claims the market leader in gold coins will do so only after about 4 to 6 years. He also claimed that a value of his coin could not be estimated.

"I asked another gold coin trader the value and was told it is about R11 000.00."

The user said he understands that he took a risk, but believes that his experience could serve as a lesson to potential investors with an interest in gold coins and medallions.

SA Gold Coin Exchange chair Demby responds:

"It is rather unfortunate that the client bought Mandela medallions as a gamble - this is not the type of buyer that we encourage, not the type of clients that we nurture, if the client had disclosed his motives to us, we would have advised him accordingly," Demby told Fin24.

He said generally clients who hold on to coins only for a short period actually lose money. "If you buy one coin looking to make a fast buck, it is a gamble and it will cost you", he cautioned.

The gold coin exchange company encourages clients to keep their coins for five to seven years, Demby said.

"We have bought R400m in stock back from clients over the past five years and almost all of our clients have made a profit."

He added that their clients, usually collectors over a period of time, accumulate on average 10 coins each.

 - Fin24

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