etf- physical gold

dunker1

Hi all, looking to purchase a physical gold etf for the long term, question i have is regarding buying in sterling or dollar (phgp/phau). Is there a vast difference in overall performance if currencies fluctuate vastly ?
Anyone else agree that gold looking oversold right now ?

wombat42_2

dunker1 wrote: »

Hi all, looking to purchase a physical gold etf for the long term, question i have is regarding buying in sterling or dollar (phgp/phau). Is there a vast difference in overall performance if currencies fluctuate vastly ?
Anyone else agree that gold looking oversold right now ?

Gold is just entering the "buying season" which is Sept to March so omens are probably good at present.

Dollat gold would get converted into sterling by the broker anyway. Makes little difference if you have sterling or dollar gold but dollar gold may be preferable because of liwer spread.

purch

Is there a vast difference in overall performance if currencies fluctuate vastly ?

There will be a difference in performance, but not vast.

As with all ETF/ETC it is the underlying currency of the Index you are tracking that matters.

If you buy the ETF in a different currency to that of the Index then the exchange will be done by the issuer of the Fund, and if you hold for a long time the monthly rollovers will be done at the exchange rate at the time.

If you buy in the underlying currency then your exposure is slightly different, as the exchange will be done when you enter and exit, whilst everything in between will be in the base currency.

As Wombat has stated, historically Gold has advanced during the Autumn and Winter months, so it could be due for a bounce. The signs are that the recent USD 'surge' which has had a negative influence on the Commodity markets was orchestrated by the Central Banks, so it may be wise to wait until this intervention period has run it's course.

ttfx

Hi I am looking to buy around 5K in gold and/or silver - how do I go about it? Any tips?

jon3001

ttfx wrote: »

Hi I am looking to buy around 5K in gold and/or silver

Bullion or ETF?

alchemistkevin

Is it really wise to get in to Gold at this time?

Prices are falling day on day and there are articles in the press of gold hitting $600 while I'm skeptical of the $600's I certainly think it could breach the $7xx in less than a week.

Yes, historic data points to a rise but it isn't happening and the traditional gold buyers (at this time of the year) don't seem to be biting even at $8xx

wombat42_2

alchemistkevin wrote: »

Is it really wise to get in to Gold at this time?

Prices are falling day on day and there are articles in the press of gold hitting $600 while I'm skeptical of the $600's I certainly think it could breach the $7xx in less than a week.

Yes, historic data points to a rise but it isn't happening and the traditional gold buyers (at this time of the year) don't seem to be biting even at $8xx

It depends on your timeframe. I am prepared to take a 10 year view if necessary. We are still in the slack season. The buying season is early September onwards which should be healthier for gold.

alchemistkevin

wombat42 wrote: »

It depends on your timeframe. I am prepared to take a 10 year view if necessary. We are still in the slack season. The buying season is early September onwards which should be healthier for gold.

That's spot on - makes sense.

wombat42_2

alchemistkevin wrote: »

That's spot on - makes sense.

A thought to consider is that gold went up about 400% over the last 10 years but with extreme volatility. So dont put money into gold that you may need at short notice.

alchemistkevin

wombat42 wrote: »

A thought to consider is that gold went up about 400% over the last 10 years but with extreme volatility. So dont put money into gold that you may need at short notice.

While I'm usually risk averse, I was planning to buy ETF's and then sell them on in a few months time when the price has peaked but can't see that happening this year.

Too much risk for too less a gain.

People won't buy what they can't afford and I might end up losing the punt, so holding tight.

If you read the market otherwise, please do let us know (kindly)

wombat42_2

Gold usually goes up on average 14% on average between Sept and March. It actually went up about 35% during that period last year. There is a fair chance you will make some money if you bought in Sept and sold in say March. Most years this period is good for gold. All i am saying is that I am personally not depending on that as I am taking a 10 year view if necessary.

I just found this:

Gold may rebound from a slump and rally through 2010 as fabrication demand rises and on expectation the dollar will resume its decline against the euro, Citigroup Inc. said, forecasting the metal to average $950 next year and $1,000 in 2010.
``Longer term, we would not be surprised to see gold double,'' the bank's analysts John Hill and Graham Wark wrote in a report. ``We would be aggressive buyers at current levels expecting gold to work higher through 2009/10.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOMuhl.DQSpw&refer=home