My analysis is after the removal of GST on precious metal, there is either no difference in price or a spike in price.
Unlikely the price of gold will drop much.
What I wrote in another forum:
My own personal opinion is there won't be any much different in price before and after the removal of GST as it will definitely benefit retailers more than consumer. The retailers will profit more from the removal of GST if they maintain current pricing and say that the large premium is due to the demand for precious metals is so high. The only game changer is if buying overseas and not having to pay GST at customs for purchase over $400. If buying overseas precious metals above $400 is not subjected to GST,I forsee people will organize more mass orders and group buys if the price of purchasing locally is more expensive than purchasing overseas. When this happens,local retailers will try to discourage people from buying overseas due to cost of shipping and reliability and whether the precious metal purchased overseas are real. In the end, the older generation who are not as tech savvy will continue to purchase from local retailer huge premium and local retailer increase their profit from them.
If the removal of GST and customer still need to pay GST for overseas purchase of precious metals,we consumers are screwed either way as local retailer will profit by increasing premium to a level like before GST removal and buying overseas incur 7% GST. If that situation arise, I would much rather consumer purchase overseas if price remains the same or cheaper than buying locally.
The local shops also have other local bullion coin which might not be exempted from GST and if the price of this coins is so much higher than those exempted from GST,who in their right mind will purchase the one not exempted from GST if the coin is strictly bullion with no numismatic values?They need to increase the price through premium or even increase the price above the GST non-exempted coin to push the sales of the non-GST exempted coin. How would they ever justify the pricing of GST exempted coin to be more expensive than the price of non-GST exempted you might ask? They can either hold the stocks of the GST exempted stocks and say that due to strong demand they are sold out or they can simply justify the huge premium by saying that the GST exempted coin are in demand and they have limited supply.
It is heads I win and tails you lose.
