Gold - Worth buying?
Discussion
In these uncertain times, is gold worth buying? I know gold is at an all time high right now and appears to be at the top of a spike, but when it comes back down to sensible levels, is it pretty recession proof?
Looking at gold prices over the last 30 years, aside from a spike in the 70's and one now, it looks to be a pretty safe long term appreciating asset and more importantly from what I can see immune to exchange rate fluctuations. Gold is gold, no matter what currency you buy or sell it in.
Anyone here dabble in the gold markets?
Looking at gold prices over the last 30 years, aside from a spike in the 70's and one now, it looks to be a pretty safe long term appreciating asset and more importantly from what I can see immune to exchange rate fluctuations. Gold is gold, no matter what currency you buy or sell it in.
Anyone here dabble in the gold markets?
Gold is priced in USD so by buying gold one is buying an asset priced in dollars and is therefore exposed to to movements of the dollar as well as the asset
When you say "when it comes back down to sensible levels, is it pretty recession proof?" what do you see as sensible levels? are you waiting for it to get back to $600 before buying or $950?
i cant make up my mind on the direction i think gold is headed, but if it were to go down to $600 you would still be at break even if the USD hits parity with the GBP. on the other hand if gold went to $1350 and the dollar took a tumble, then there would be no profit. of course you could always hedge against currency movement and just take the full bore of the asset price movement
Vlad the easiest way to buy gold is with ETF's through any good stockbroker, or by spread betting
When you say "when it comes back down to sensible levels, is it pretty recession proof?" what do you see as sensible levels? are you waiting for it to get back to $600 before buying or $950?
i cant make up my mind on the direction i think gold is headed, but if it were to go down to $600 you would still be at break even if the USD hits parity with the GBP. on the other hand if gold went to $1350 and the dollar took a tumble, then there would be no profit. of course you could always hedge against currency movement and just take the full bore of the asset price movement
Vlad the easiest way to buy gold is with ETF's through any good stockbroker, or by spread betting
matsmith said:
Gold is priced in USD so by buying gold one is buying an asset priced in dollars and is therefore exposed to to movements of the dollar as well as the asset
When you say "when it comes back down to sensible levels, is it pretty recession proof?" what do you see as sensible levels? are you waiting for it to get back to $600 before buying or $950?
i cant make up my mind on the direction i think gold is headed, but if it were to go down to $600 you would still be at break even if the USD hits parity with the GBP. on the other hand if gold went to $1350 and the dollar took a tumble, then there would be no profit. of course you could always hedge against currency movement and just take the full bore of the asset price movement
Vlad the easiest way to buy gold is with ETF's through any good stockbroker, or by spread betting
Over the next few years when the western economies get back on track, gold prices will surely fall, no? Don't people buy gold as a safe haven when economies/currencies start faltering?When you say "when it comes back down to sensible levels, is it pretty recession proof?" what do you see as sensible levels? are you waiting for it to get back to $600 before buying or $950?
i cant make up my mind on the direction i think gold is headed, but if it were to go down to $600 you would still be at break even if the USD hits parity with the GBP. on the other hand if gold went to $1350 and the dollar took a tumble, then there would be no profit. of course you could always hedge against currency movement and just take the full bore of the asset price movement
Vlad the easiest way to buy gold is with ETF's through any good stockbroker, or by spread betting
dvs_dave said:
Over the next few years when the western economies get back on track, gold prices will surely fall, no? Don't people buy gold as a safe haven when economies/currencies start faltering?
Traditionally it's seen as a hedge against inflation. And if your a gold bug stories like this are good for the soul.
"Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".
"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.
"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said"
And the important bit:
""Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.
The comments suggest that China has become the driving force in the gold market and can be counted on to
buy whenever there is a price dip, putting a floor under any correction."
http://www.telegraph.co.uk/finance/economics/61469...
So the OP and China wanting to buy on the dips. Who do you thinks got the most cash??
Edited by Fittster on Sunday 6th September 23:29
Vlad. said:
How do you go about buying gold in any quantity? I'd be interested to know too.
Try this lot - http://www.goldline.co.uk/bullionCoinsPage.pageEdited by Vlad. on Friday 4th September 18:33
ETFs etc are just a contract, and therefore suffer from counterparty risk. If you buy UK coins (eg Britannias and sovereigns) they are regarded as legal tender, and therefore not subject to CGT. Krugerands etc would attract CGT on any gains. Try www.kitco.com for some more varied views on the bullion market.
I am positive on gold.
For more info.
www.kitco.com (as above)
www.goldseek.com
For back ground in gold (and general investing) - www.zealllc.com
Personally, I think gold will go to 1400 US$ by mid 2010, consolidate for 2 - 4 months, then reach a blow off top in early 2011. A bold claim ? well I've put my money where my mouth is. It'll be interesting to go back to this thread in ~ 1 year to see how I did.
For more info.
www.kitco.com (as above)
www.goldseek.com
For back ground in gold (and general investing) - www.zealllc.com
Personally, I think gold will go to 1400 US$ by mid 2010, consolidate for 2 - 4 months, then reach a blow off top in early 2011. A bold claim ? well I've put my money where my mouth is. It'll be interesting to go back to this thread in ~ 1 year to see how I did.
Gold is a store of value not an investment. Look at the returns over the centuries.
Basically you get your money back inflation adjusted and no more on average.
Of course if you time it right you can do ok. You can also blow out.
On that basis inflation protected bonds are probably just as good.
http://seekingalpha.com/article/174101-fed-sends-g...
"Grice’s chart shows that, over the long run, gold is likely to do no better than protect your purchasing power. An ounce of gold today buys a good men’s suit; in 100 years, it is likely to buy the same.
So gold won’t make you rich. But it may protect you from becoming poor."
Basically you get your money back inflation adjusted and no more on average.
Of course if you time it right you can do ok. You can also blow out.
On that basis inflation protected bonds are probably just as good.
http://seekingalpha.com/article/174101-fed-sends-g...
"Grice’s chart shows that, over the long run, gold is likely to do no better than protect your purchasing power. An ounce of gold today buys a good men’s suit; in 100 years, it is likely to buy the same.
So gold won’t make you rich. But it may protect you from becoming poor."
matsmith said:
Gold is priced in USD so by buying gold one is buying an asset priced in dollars and is therefore exposed to to movements of the dollar as well as the asset
When you say "when it comes back down to sensible levels, is it pretty recession proof?" what do you see as sensible levels? are you waiting for it to get back to $600 before buying or $950?
i cant make up my mind on the direction i think gold is headed, but if it were to go down to $600 you would still be at break even if the USD hits parity with the GBP. on the other hand if gold went to $1350 and the dollar took a tumble, then there would be no profit. of course you could always hedge against currency movement and just take the full bore of the asset price movement
Vlad the easiest way to buy gold is with ETF's through any good stockbroker, or by spread betting
In total agreement with that. And add that generally as the dollar falls, gold rallies - as many if not most buyers are not based in USD. So as the USD falls relative to their currency, gold becomes cheaper (in non-USD terms) so they buy more.When you say "when it comes back down to sensible levels, is it pretty recession proof?" what do you see as sensible levels? are you waiting for it to get back to $600 before buying or $950?
i cant make up my mind on the direction i think gold is headed, but if it were to go down to $600 you would still be at break even if the USD hits parity with the GBP. on the other hand if gold went to $1350 and the dollar took a tumble, then there would be no profit. of course you could always hedge against currency movement and just take the full bore of the asset price movement
Vlad the easiest way to buy gold is with ETF's through any good stockbroker, or by spread betting
So, many pundits are saying that a lot (not all) of the recent gold rally is due to nothing more than dollar weakness.
Gassing Station | Finance | Top of Page | What's New | My Stuff