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  • FIRST POST
    • ripplyuk
    • By ripplyuk 6th Jul 17, 10:39 AM
    • 1,655Posts
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    ripplyuk
    Is buying gold a good idea?
    • #1
    • 6th Jul 17, 10:39 AM
    Is buying gold a good idea? 6th Jul 17 at 10:39 AM
    I know absolutely nothing about this apart from reading a little on google. My partner wants to buy some gold and I want to find out some opinions before he does that. It isn't so much for the investment value as this isn't a huge amount of money but I don't want him to lose money either. He says he wants something 'physical' rather than investing in stocks/shares etc.

    Is this a good idea? Could anyone recommend somewhere reputable to buy this? I've looked at the Royal mint but then I read it's overpriced there. I'm worried he'll buy from somewhere dodgy and get ripped off. He is talking about krugerrands. Are they the best way to have gold, or is bullion/other coins better?

    Also, would antiques be more worthwhile to spend to the money on?
Page 2
    • _CC_
    • By _CC_ 7th Jul 17, 3:28 PM
    • 270 Posts
    • 260 Thanks
    _CC_
    What does he mean by "physical"?

    If he means physically hoarding it in the house then that brings about its own issues unless it's a fairly minimal amount in which case tell him to fill his boots.

    If he just means gold as a commodity then it's not clear to me why gold is "physical" yet part ownership in companies that have land, buildings, machinery etc. are not.
    • Malthusian
    • By Malthusian 7th Jul 17, 3:36 PM
    • 3,280 Posts
    • 4,980 Thanks
    Malthusian
    He is very likely to leave this money sitting in the bank (in his current account too). So I'm thinking it might be better to buy gold than leave the cash sitting doing nothing.
    Originally posted by ripplyuk
    If he buys gold the money will still be sitting around doing nothing. However if it sits around in a cash deposit doing nothing its value will stay the same (in nominal terms) while if it is sitting around in gold doing nothing (other than being shiny) its value will go up and down at random according to the whims of speculators.

    He wants this gold in his hand, not just a certificate of it.
    So as well as the risk of volatility he wants the risk of it being nicked.

    I've just been googling about forgeries which is worrying. Is there any way to know for sure if the stuff is real?
    Bite it? I'm sure you can pay for someone to authenticate it but you are then at even more disadvantage in terms of making a return, as you now need speculators to drive up the price of gold to recover the money you spent on authenticating it, before you can actually make any money from it.

    Is it safest to buy it from the royal mint?
    Safe is a very relative word here. You are probably minimising the risk of being outright scammed, but that is really the least of your worries.
    • ripplyuk
    • By ripplyuk 7th Jul 17, 4:44 PM
    • 1,655 Posts
    • 1,562 Thanks
    ripplyuk
    He's planning to keep it at home. I assume he'll hide it somewhere. I know the amount he is planning to buy will be under £10,000 so maybe normal home insurance would cover it.
    • redped
    • By redped 7th Jul 17, 5:35 PM
    • 604 Posts
    • 542 Thanks
    redped
    Like others here, I buy one or two sovereigns a year - I've always used bullionbypost, and would recommend them.
    • DiggerUK
    • By DiggerUK 7th Jul 17, 5:44 PM
    • 2,793 Posts
    • 2,681 Thanks
    DiggerUK
    Check with your insurance company. If you avoid "numismatics" then it will be insured as a job lot, not a collection.
    The amount you are thinking about purchasing is not insignificant, and I would suggest that you consider buying over a four to six month period. Prices are trending down for now, and I suspect there may be some more down side to the price. But that's just my opinion.

    This is my favoured site for checking the price. Play around with it. You can track the price back to 1973, pay particular attention to the price movements over the last ten years. As you will be buying and selling in pounds, follow the pound price. USD is just the international pricing currency. http://goldprice.org

    Lastly, these two sites are consistently best value. I have used both. Remember to check for delivery and p&p charges.
    http://www.elminvestments.co.uk/gold-coins.html
    https://atkinsonsbullion.com/gold/gold-coins
    Of the other sites recommended I can also vouch for Coin Invest, Hatton Garden and Bairds..._
    I am not now, nor have I ever been, a Financial Adviser.
    Forward, to the 'British Spring'
    • EdGasketTheSecond
    • By EdGasketTheSecond 7th Jul 17, 10:20 PM
    • 283 Posts
    • 163 Thanks
    EdGasketTheSecond
    Yes it's a great idea. A gold ETF is the most cost effective way to own gold.
    • Eco Miser
    • By Eco Miser 8th Jul 17, 12:29 AM
    • 3,146 Posts
    • 2,906 Thanks
    Eco Miser
    I've just been googling about forgeries which is worrying. Is there any way to know for sure if the stuff is real?
    Bite it?
    Originally posted by Malthusian
    If you do this, note that pure gold is soft and will show the teeth marks if you bite hard enough.
    Eco Miser
    Saving money for well over half a century
    • Geoff1963
    • By Geoff1963 8th Jul 17, 1:13 AM
    • 1,056 Posts
    • 677 Thanks
    Geoff1963
    What if your house burns down
    Gold melts at 1064 deg C. It is quite hard to destroy, and quite easy to find.

    Gold is free of VAT ; and legal tender gold coins ( Sovereigns + parts, Britannias and parts ) are CGT free.

    Keeping it in the house, doesn't make your house more likely to be burgled ; but people thinking you have it in the house, makes you more likely to be tortured. For that reason alone, I'd say it's a bad idea.
    • atush
    • By atush 8th Jul 17, 9:40 AM
    • 16,333 Posts
    • 10,081 Thanks
    atush
    Yeah, try looking for gold coins in a tower fire?

    While the gold may not be destroyed in a fire, it can be unrecoverable for the owner.
    • Geoff1963
    • By Geoff1963 8th Jul 17, 2:36 PM
    • 1,056 Posts
    • 677 Thanks
    Geoff1963
    While the gold may not be destroyed in a fire, it can be unrecoverable for the owner.
    I was comparing gold to other at-home physical investments, such as currency notes or fine art.
    • atush
    • By atush 8th Jul 17, 4:32 PM
    • 16,333 Posts
    • 10,081 Thanks
    atush
    i was comparing with savings in a bank, or equities.

    This guy wants 10K in gold in his house.

    To me, bad investment (produces no income, and all eggs in one basket) and unsafe.
    • cashbackproblems
    • By cashbackproblems 9th Jul 17, 11:27 AM
    • 1,705 Posts
    • 662 Thanks
    cashbackproblems
    I have a safe in the attic and keep mine in there and as mentioned it can be covered by contents insurance mine was the same as i only have 6 coins ie 6k. Just keep all the purchase receipts
    • phillw
    • By phillw 9th Jul 17, 11:33 AM
    • 912 Posts
    • 545 Thanks
    phillw
    Also, would antiques be more worthwhile to spend to the money on?
    Originally posted by ripplyuk
    Only if you like them and don't mind the value going down. The same for gold, if you like having gold then buy gold. Just don't expect it will be worth more when you come to sell it.

    https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/File:Gold_price_in_USD.png
    • cjv
    • By cjv 9th Jul 17, 8:40 PM
    • 104 Posts
    • 57 Thanks
    cjv
    I thought about buying a little gold as an investment but was always put off by an ounce coin costing say £1000 when the current gold price is £950. It confused me a little and I always assumed that meant an instant £50 loss on an investment.

    I might do some research into it to better educate myself
    • phillw
    • By phillw 9th Jul 17, 9:55 PM
    • 912 Posts
    • 545 Thanks
    phillw
    I might do some research into it to better educate myself
    Originally posted by cjv
    Like any investment, you have to pay brokerage fees/commission/whatever they call it every time you buy or sell. The buy price is £50 over the actual price, the sell price could be £50 below. You'd need to make 10% before you break even. If you're going to keep it for multiple years then it might be worth it. Especially if sterling crashes in 12 months time.

    Gold should be bought at scrap value. When you buy coins/bars/etc sold above scrap value then you are just paying into someone elses pension for them.

    The cheapest way of buying gold is to advertise in the newspaper "cash for gold".
    Last edited by phillw; 09-07-2017 at 10:04 PM.
    • DiggerUK
    • By DiggerUK 9th Jul 17, 10:38 PM
    • 2,793 Posts
    • 2,681 Thanks
    DiggerUK
    As a rule of thumb, you will find buyers will pay 3.5%, and sellers 2%. Any dealers outside that range should be avoided..._
    I am not now, nor have I ever been, a Financial Adviser.
    Forward, to the 'British Spring'
    • qwert yuiop
    • By qwert yuiop 10th Jul 17, 1:30 AM
    • 2,087 Posts
    • 1,215 Thanks
    qwert yuiop
    Gosh - a man who works for a company that buys and sells gold thinks that you should buy gold.

    I wonder why he thinks that?

    I'm sure it must have been because he has your particular best interests at heart. There can't possibly be any other reason can there?
    Originally posted by AndyT678
    You go to a barber and he tells you that you don't need a haircut?
    • TrustyOven
    • By TrustyOven 10th Jul 17, 2:08 PM
    • 668 Posts
    • 706 Thanks
    TrustyOven
    You go to a barber and he tells you that you don't need a haircut?
    Originally posted by qwert yuiop
    What a silly comparison. You're not really helping AndyT678!

    You go to a barber and they say "what would you like? I can do a wide range of different styles." and you either get cut there or go elsewhere.

    Not: "you definitely need a haircut! look, everyone will be laughing at you and bullying you if you dont have your haircut here."
    Goals
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    • bowlhead99
    • By bowlhead99 10th Jul 17, 8:10 PM
    • 6,868 Posts
    • 12,369 Thanks
    bowlhead99
    What a silly comparison. You're not really helping AndyT678!

    You go to a barber and they say "what would you like? I can do a wide range of different styles." and you either get cut there or go elsewhere.
    Originally posted by TrustyOven
    Well it's a fair analogy.

    If you go to a barber and ask how to improve your look, he probably won't recommend you get a tattoo from next door, or a spray tan from the place next to that, or sign up for classes at the gym across the road, or buy some new shoes or a whole outfit at the shoe shop or boutique down the street... until you've handed over your cash for a haircut. Though all could be useful. Depending on your start point, the best improvement you could buy with this week's pay packet could be from a bunch of other options and leave the hair to grow another few weeks.

    Similarly you won't get unbiased ideas on building a portfolio that grows and protects your wealth across a range of long term economic conditions from someone who runs a gold research and trading firm, because they'll mostly be incentivised to be telling you about things that they know about and that will help them.

    Still, if you've decided that gold is definitely what you are going to get regardless of all the more suitable alternatives, so you need an article that explains gold ETFs vs Brittanias, or Pandas Vs Krugerrands, or the effect of drip feeding versus lump sums for a given theoretical price movement... it makes sense that the guy from the gold company writes the article. He probably know more about it than the guy who can advise on crew cuts Vs short backnsides, or the optician who knows that you should go for squarer lenses as they fit your round face. They could all write articles on their own specialist subject and you might get a better set of articles than if you got generalists to write them.

    Obviously it is still somewhat "buyer beware" if you are reading an article about buying specialist assets written by someone whose salary and investment returns only exist because of demand from people buying those specialist assets. In that sense, its a bit like, if you are looking for wholly unbiased advice on hosting a dinner party, don't expect the guy running the chicken farm to plan your menu entirely impartially and your vegan guests may not be too happy.

    But if you know you definitely want poultry, then he'll probably have some good hints and tips on how to get the skin crispy without overcooking the white meat. You might of course still get nudged towards a particular type of bird that suits his stock levels rather than your wallet or tastebuds.
    • Vaskor
    • By Vaskor 11th Jul 17, 3:52 AM
    • 8 Posts
    • 6 Thanks
    Vaskor
    Just thought I'd throw in two ideas. I'd rather invest in shares or funds long term, but if I had to buy gold, I'd probably do it through a reputable FCA regulated spreadbetting company such as IG.com, whereby you're protected by the FSCS if it folded. Alternatively BullionVault.com has been around since 2007 at least, and has arrangements whereby you can pick up your physical gold from its vaults in London, NY or Zurich if you wanted.
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