GOLD

[Compounded]

Investing in gold for me is a way to protect my savings in uncertain times so I am definitely a buy and hold investor.

I am happy make small loss for the case of security.

However I must say I have been surprised by the rapidity of the rise in gold the last couple of months and wonder if it is sustainable.

I expected a much more gradual rise.

 

I am the same, I expect a gradual rise with increasing volatility, the rise in the last two months fits in with this expectation as would a £200 sudden plunge.

 

I do not think gold can become the dog of an investment it was in the 80's and 90's unless the financial system is fixed, I don to believe that to be possible if I am wrong and it does turn out the system is OK it would be a better outcome for me overall even though my investments would be halved or worse.

[wren]

Investing in gold for me is a way to protect my savings in uncertain times so I am definitely a buy and hold investor.

I am happy make small loss for the case of security.

However I must say I have been surprised by the rapidity of the rise in gold the last couple of months and wonder if it is sustainable.

I expected a much more gradual rise.

About every 2 years or so gold has had a massive upleg. When it moves like this it really moves and many of the gold bulls are surprised at the speed.

 

See the 2 articles I posted earlier to put it in the context of the whole bull market. This has happened before in the winters of 07-08 and 05-06.

 

If it goes like the 2 previous big uplegs this could continue until the spring with some minor corrections along the way.

[routemaster]

About every 2 years or so gold has had a massive upleg. When it moves like this it really moves and many of the gold bulls are surprised at the speed.

 

See the 2 articles I posted earlier to put it in the context of the whole bull market. This has happened before in the winters of 07-08 and 05-06.

 

If it goes like the 2 previous big uplegs this could continue until the spring with some minor corrections along the way.

 

A thing I found interesting on the Gold - Continuous Contact chart on your post #1377, was that both uplegs in 05/06 and 07/08 were subjected to pullbacks midway, like now, and then gold continued to achieve its target on the upper trend line.

[romans holiday]

Why wouldn't they hyper-inflate? It's certainly a possible outcome. I don't know why you are so quick to dismiss it and frequently present your opinion on this as fact. IMO they will cling to their reserve currency status until it's `prised from their cold dead hands`, to default is acknowledging they can't service the debt, but they can...

Well, whenever we present our opinions they tend to come across as "facts".... this is just the nature of argument. I am sure you would agree that arguments for hyper-inflation also comes across as a "fact". I always try to make it clear that my opinion is theoretical and not a dogma... that I could be wrong. I think this is an important point, that we should be pragmatic about our opinions and only hold them as provisionally true until future experience either corroborates or falsifies them. I also put the principle of uncertainty at the centre of my investment strategy.

 

I would be the first to admit that hyper-inflation is a possibility... but I think it is also unlikely.

[sylvester]

Really enjoying this debate. Thanks for the 'alternative' viewpoint and sticking at it RH, it's good for everyone to firm up or get rid of ideas they may have about the gold market. Just remember everyone, if RH is suggesting alternatives to what you think it can help you clarify your views in your own mind as well as it does help RH clarify things in his. He's doing us a favour here so every be nice and polite... :-)

 

(spot the man who saw the Dali Lama yesterday) - peace out!

[azazel]

About every 2 years or so gold has had a massive upleg. When it moves like this it really moves and many of the gold bulls are surprised at the speed.

 

See the 2 articles I posted earlier to put it in the context of the whole bull market. This has happened before in the winters of 07-08 and 05-06.

 

If it goes like the 2 previous big uplegs this could continue until the spring with some minor corrections along the way.

My view exactly. +40% from $1000. Although I doubt it will be as predictable as I predict.

[duckwomanloulou]

Has anyone else seen the Royal Mint ad's now running on tv? Only noticed it today but thought it was interesting as this is the first tv ad I've seen talking about buying Gold and Silver rather than selling. They may just be running them pre Christmas as that was how the ad was positioned (Xmas gift for loved one etc). It was on NickJr

 

Lou

[routemaster]

Has anyone else seen the Royal Mint ad's now running on tv? Only noticed it today but thought it was interesting as this is the first tv ad I've seen talking about buying Gold and Silver rather than selling. They may just be running them pre Christmas as that was how the ad was positioned (Xmas gift for loved one etc). It was on NickJr

 

Lou

An interesting report.

 

The Royal Mint have trebled their run of 2010 sovereigns to 250,000. I have never heard of NickJr. I looked them up on the internet and they broadcast, it seems, children's programmes on satellite/cable TV.

[duckwomanloulou]

An interesting report.

 

The Royal Mint have trebled their run of 2010 sovereigns to 250,000. I have never heard of NickJr. I looked them up on the internet and they broadcast, it seems, childrens programmes on satellite/cable TV.

 

Yep Nick Jr is for kid's on Sky/other satellite channels (my 2 were watching it when I saw the ad). Hence my confused look as hardly your target market but might be syndicated to all satellite channels so might see ads running on more mainstream (adult view) channels too I guess.

[stobar]

Has anyone else seen the Royal Mint ad's now running on tv?

 

Here's the ad...

 

 

 

[duckwomanloulou]

Gold has shone the brightest over the past decade. It traded at $288 an ounce 10 years ago, Barclays Capital said. Last week, the spot price jumped to an all-time high of $1,217 — giving a stellar 323% return, or about 15% a year.

 

http://www.timesonline.co.uk/tol/money/inv...icle6945627.ece

 

Black Rock Gold & General has turned in one of the best performances among unit trusts, with a 733% return.

 

http://www.timesonline.co.uk/tol/money/inv...icle6945632.ece

 

Best performing asset class and best performing unit trust in the last 10 years .... However, Bond warned: “Stay away from gold in the longer term — other industrial commodities, such as copper and oil, are likely to give better returns.”

 

[routemaster]

http://www.timesonline.co.uk/tol/money/inv...icle6945632.ece

 

Best performing asset class and best performing unit trust in the last 10 years .... However, Bond warned: “Stay away from gold in the longer term — other industrial commodities, such as copper and oil, are likely to give better returns.”

 

 

My sentiment as well.

 

 

I know it's like telling GEIs how to suck eggs but, there is this article on timesonline about the worst wasy to invest in gold.

 

The tripling of the gold price since 2004 has predictably led to something of a stampede for the metal among private investors.

But in their hurry to gain a slice of the precious metal, they do not always take the most sensible route, says Adrian Ash, of BullionVault, the gold bullion exchange.

 

Below he outlines five of the worst ways to buy gold:

 

 

1. Buying gold coins in auctions on eBay

 

Mr Ash says the prices can outstrip the true value of gold - the ‘spot’ gold price - by 25 per cent even for the plainest coins. Rarer coins are sometimes bid up to an even higher premium. Mr Ash says you should check out the seller ratings, the full item description and the shipping fees.

 

2. Chasing after ‘rare’ gold coins

 

The US authorities have given warning that investors should beware of dealers charging exorbitant fees for coins that turn out to be anything but rare. In 2004 a British telesales company was shut down for selling gold coins at 700 per cent of true market value.

 

3. Newly minted ‘collectible’ coins

 

As with supposedly ‘rare’ coins, so-called ‘collectible’ coins can cost a lot more than the value of the gold they contain. Mr Ash says the Royal Mint charges mark-ups of 40 per cent plus. The new ‘Countdown to London 2012’ series, priced at £1,295, costs almost twice the value of the coin’s gold content.

 

4. Rank over-pricing

 

Many reputable-looking companies can charge way over the odds for gold, says Mr Ash. “Mail-shots, websites and radio advertisements are now selling gold to UK investors at 15 to 40 per cent above the true ‘spot’ market value. One newly-launched company is selling one ounce bars for more than £800 (spot value £600) and kilo bars for £25,000 plus (spot value £19,400).”

 

5. Unallocated gold storage accounts

 

When a bank sells you gold but holds it in safe-keeping, the account is often unallocated. This means you do not actually own any gold. Instead the bank owes you a certain amount of the metal. This makes you a creditor of the bank.

 

http://timesbusiness.typepad.com//money_we...o-buy-gold.html

[aliveandkicking]

well it's true that the USD supply has entered hyper-inflation, so of course there is no point in you saying that it hasn't.

 

prices haven't gone hyper yet though, so posters can still debate whether prices will go hyper or not.

 

rather than making personal attacks on posters who say that prices will go hyper; why don't you put forward your arguments as to why you think prices will not go hyper.

 

If only you could agree to say hyper increases in money supply might lead to hyper inflation

 

Related to this style of debate we have:

 

1. Moderator goldfinger saying it is irrational to give any reasons why hyperinflation cannot be prevented.

 

2. Moderator RH saying that hyperinflationists are irrational nutters

 

Do people want a debate?

 

 

 

 

 

[Schaublin]

My sentiment as well.

 

 

I know it's like telling GEIs how to suck eggs but, there is this article on timesonline about the worst wasy to invest in gold.

 

 

 

http://timesbusiness.typepad.com//money_we...o-buy-gold.html

 

 

Adrian Ash is trying to trash all the ways to acquire physical gold in order to steer you into Bullionvault. Bullionvault has some advantages especially for those wishing to trade a bit but allocated or not, the gold is not in your possession.

[Pixel8r]

For all you complacent Gold bulls information there is a new forum which has recently opened up, come and give it a try and filter out some noise.

 

[aliveandkicking]

and why would deleveraging be deflationary or even cause prices to fall? it is simply a transfer of money from the debtor to the creditor.

 

That is only true for full reserve banking which is pretty well not practised anywhere on earth in reality.

 

Our banks are fractional reserve banks which are allowed to lend money they borrow from others.

 

By defininition if no fractional reserve bank had any leverage then only cash the bank already owned could be lent to customers and it would be a full reserve bank.

 

A fractional reserve bank cannot create credit without creating savers deposits with that bank.

 

Credit is created by matching savers rates to borrowers rates for a profit.

 

Eg the bank with 1 dollar borrows 99 from a saver to lend 100 to a borrower to be levered 99:1 or whatever the leverage is.

 

Or it creates credit of 100 which is spent by a buyer of things sold by a customer of that bank who then has savings of 100 with the same bank.

 

If the 'saver' wants to be repaid the bank has to borrow from another source and might chose also to delever by not rolling over loans or by not issuing new ones as old ones expire.

 

As the bank delevers people who wish to borrow money are turned away or must pay higher interest rates which discourages borrowing for many.

 

If all the banks delever fully there will be something like 97% less money in the world. So prices will presumably fall 97% also or some huge amount.

[Jake]

Adrian Ash is trying to trash all the ways to acquire physical gold in order to steer you into Bullionvault. Bullionvault has some advantages especially for those wishing to trade a bit but allocated or not, the gold is not in your possession.

 

I would skip ebay.

 

Ditto unallocated accounts or bank looking after my gold.

 

New coins-depends on what you buy. Low mintages push up the value. eg Gold Trafalgars had a mintage of 1805 pieces. These were 495. Now they top 1000 at least. They will only gain in value.

The olympic countdowns might be worth getting if you think the olympics 2012 may be cancelled due to unforseen geopolitical/financial events..

 

Skip dodgy companies advertising left right and center. Stay with trusted coin dealers.

 

DYOR on BV or GM. Are we sure their allocated accounts aren't tungsten filled gems supplied by dodgy central bankers? Are we sure they'll never be somehow confiscated/banned/suspended.

 

I would skip numismatic rarities unless you really know what you're doing and have wods of cash. Nobody will give a hoot what your mint mark is in a BFC situation. Being a quarter, half or full oz will be easy to explain to the public rather than ducats or sommat.

 

Having metals to hand fulfills one of the most basic criterion for owning gold IMO. Slip them in your pocket/luggage and transport them wherever you go, however you go. Worth the price of the premium IMO.

 

BV wont give you ready to go coins on delivery. You get smelly bar segs which could, as I suggested, be Tungsten friendly. Ask the Chinese for details.

 

I know my preferred route.

[Schaublin]

I would skip ebay.

 

Ditto unallocated accounts or bank looking after my gold.

 

New coins-depends on what you buy. Low mintages push up the value. eg Gold Trafalgars had a mintage of 1805 pieces. These were 495. Now they top 1000 at least. They will only gain in value.

The olympic countdowns might be worth getting if you think the olympics 2012 may be cancelled due to unforseen geopolitical/financial events..

 

Skip dodgy companies advertising left right and center. Stay with trusted coin dealers.

 

DYOR on BV or GM. Are we sure their allocated accounts aren't tungsten filled gems supplied by dodgy central bankers? Are we sure they'll never be somehow confiscated/banned/suspended.

 

I would skip numismatic rarities unless you really know what you're doing and have wods of cash. Nobody will give a hoot what your mint mark is in a BFC situation. Being a quarter, half or full oz will be easy to explain to the public rather than ducats or sommat.

 

Having metals to hand fulfills one of the most basic criterion for owning gold IMO. Slip them in your pocket/luggage and transport them wherever you go, however you go. Worth the price of the premium IMO.

 

BV wont give you ready to go coins on delivery. You get smelly bar segs which could, as I suggested, be Tungsten friendly. Ask the Chinese for details.

 

 

I know my preferred route.

 

 

Agreed Jake, I advise sticking to sovereigns or one ounce bullion coins I would never buy a proof coin unless it was priced the same as a standard coin and I am not interested in numismatic value.

 

I would not dismiss ebay completely - if you have patience, you can find local sellers and arrange to pick up in person and pay cash - there may be more available than the one piece advertised. Of course, all due diligence should be observed - I don't use ebay much now but I advise looking at the wording of the ad - is there some history? Is the ad well written etc? The seller can be contacted and a telephone chat before the end of the auction should be able to tell you what kind of person you are dealing with. I would also advise buying from a coin dealer - especially if you have never bought before - you will get a feel for the real thing and will be unlikely to be cheated when buying privately.

 

It is not rocket science - when you have handled some sovs or one ounce bullion coins you will be able to feel a copy immediately.

[routemaster]

Adrian Ash is trying to trash all the ways to acquire physical gold in order to steer you into Bullionvault. Bullionvault has some advantages especially for those wishing to trade a bit but allocated or not, the gold is not in your possession.

 

I feel the same.

 

I do like the way James Turk promotes the purchase of physical bullion, including coins and explains now his own company works, and leaves the ball in your court - no hard sell.

 

PS: I am off to watch Kelly's Heros, which has just started on channel 5.

[azazel]

Agreed Jake, I advise sticking to sovereigns or one ounce bullion coins I would never buy a proof coin unless it was priced the same as a standard coin and I am not interested in numismatic value.

 

I would not dismiss ebay completely - if you have patience, you can find local sellers and arrange to pick up in person and pay cash - there may be more available than the one piece advertised. Of course, all due diligence should be observed - I don't use ebay much now but I advise looking at the wording of the ad - is there some history? Is the ad well written etc? The seller can be contacted and a telephone chat before the end of the auction should be able to tell you what kind of person you are dealing with. I would also advise buying from a coin dealer - especially if you have never bought before - you will get a feel for the real thing and will be unlikely to be cheated when buying privately.

 

It is not rocket science - when you have handled some sovs or one ounce bullion coins you will be able to feel a copy immediately.

 

I have never been ripped off on ebay. I have bought a few one ounce gold items and worried about it.Worst case was a woman who sold me a crown as a sovereign but she refunded me the money. Best to stick with lower priced sovereigns and half sovereigns from sellers with reasonable feedback. I would only use paypal unless the seller had very high feedback. Also, it would have to be recorded or special delivery post. Beware of sellers charging £5+ for sellers standard rate postage as that might be second class 30p stolen jobbie. I have bid on loads of stuff in the past and only won a fraction of the items I bid on, but had some bargains. Its more of a recreational thing though.

[Garincho]

Agreed Jake, I advise sticking to sovereigns or one ounce bullion coins I would never buy a proof coin unless it was priced the same as a standard coin and I am not interested in numismatic value.

 

Hi,

 

I am wanting to buy a bit of gold as a hedge against inflation/hyperinflation. I have looked into it over the past few days and am thinking about buying gold sovereigns from ATS Bullion or Coinvest, would you recommend either or both of these dealers? Also, I haven't been able to find out why different Gold Sovereigns with the same gold content are priced differently on the same site (there are some at £180 and some at £190 on coinvest), is it worth paying the extra £10 (would I get back more than the approx. 2% extra I paid for the £190 coin when I came to sell it) or is it just the rarity value that increases the price?

 

I am a novice and so would appreciate any advice anyone thinks is relevant to my situation. I live in the UK and as I say I am doing this to (hopefully) protect part of my savings as I am saving for a house but with the way things are going it looks like I may be waiting a year or more before prices come down to a reasonable level.

 

Thanks in advance.

 

 

[Bosworth]

Hi,

 

I am wanting to buy a bit of gold as a hedge against inflation/hyperinflation. I have looked into it over the past few days and am thinking about buying gold sovereigns from ATS Bullion or Coinvest, would you recommend either or both of these dealers? Also, I haven't been able to find out why different Gold Sovereigns with the same gold content are priced differently on the same site (there are some at £180 and some at £190 on coinvest), is it worth paying the extra £10 (would I get back more than the approx. 2% extra I paid for the £190 coin when I came to sell it) or is it just the rarity value that increases the price?

 

I am a novice and so would appreciate any advice anyone thinks is relevant to my situation. I live in the UK and as I say I am doing this to (hopefully) protect part of my savings as I am saving for a house but with the way things are going it looks like I may be waiting a year or more before prices come down to a reasonable level.

 

Thanks in advance.

 

If your motive for buying is as an inflation hedge then "gold is gold is gold" so go for the physical form that you are interested in and go for the version that gives you the most gold for your money.

 

I have used both ATS Bullion and CoinInvestDirect.com. Both were great. In future I would probably use ATS Bullion on the basis that I can pop there in person to do the deal (very average little office to the side of the Savoy Hotel in London) and would not have to wait for delivery etc.

 

 

[Schaublin]

Hi,

 

I am wanting to buy a bit of gold as a hedge against inflation/hyperinflation. I have looked into it over the past few days and am thinking about buying gold sovereigns from ATS Bullion or Coinvest, would you recommend either or both of these dealers? Also, I haven't been able to find out why different Gold Sovereigns with the same gold content are priced differently on the same site (there are some at £180 and some at £190 on coinvest), is it worth paying the extra £10 (would I get back more than the approx. 2% extra I paid for the £190 coin when I came to sell it) or is it just the rarity value that increases the price?

 

I am a novice and so would appreciate any advice anyone thinks is relevant to my situation. I live in the UK and as I say I am doing this to (hopefully) protect part of my savings as I am saving for a house but with the way things are going it looks like I may be waiting a year or more before prices come down to a reasonable level.

 

Thanks in advance.

 

 

I used coininvestdirect recently and found it offered a good service with tracked delivery. As for which Sovs, - I know there is a slight premium on older ones - I class this as numismatic interest so I would not pay the extra but some are willing to pay a few more pounds for them. Also the 5g, 10g, 20g, 50g ingots are worth a look - for the continentally minded!

 

Also, look here http://www.greenenergyinvestors.com/index.php?showtopic=3782

 

 

Regarding house prices: I think there will be some nominal falls (priced in GBP) to come but I think to understand how the UK housing market will unwind, have a look at Goldfinger's graph of OZ gold/UK houseprices

[routemaster]

If your motive for buying is as an inflation hedge then "gold is gold is gold" so go for the physical form that you are interested in and go for the version that gives you the most gold for your money.

 

I have used both ATS Bullion and CoinInvestDirect.com. Both were great. In future I would probably use ATS Bullion on the basis that I can pop there in person to do the deal (very average little office to the side of the Savoy Hotel in London) and would not have to wait for delivery etc.

That is why I prefer to do business with ATS and Bairds as opposed to coininvest, because you can walk in and buy or sell face to face.

 

You could try getting in touch with the Royal Mint Business 2 Business dept if you are interested in buying 50+ sovereigns. The more you buy the bigger the discount, which will start at about £8 to £10 cheaper than even the most competitive dealer for brand new sovs

 

Also this is a useful article from MoneyWeek entitled "Why you should buy British sovereigns".

 

http://www.moneyweek.com/investments/preci...igns-16088.aspx

 

 

[signofthetimes]

anyone know what the fees actually are to sell coins on ebay ? presumably there's a listing fee plus a final value fee if you sell it. Is the % the same as selling some old toys or is it different for coins?