Gold - worth a punt?

TRUSt_NO_1_2

samclam wrote: »

I've gone for an ETF backed by Physical Silver PHSP (same as PHAG but in £s) as Silver is massively undervalued and unlike Gold there is an industrial need for it. Trading with HoodlessBrennan.com only costs £8 / trade. ETF Securities Physical Gold is PHGP & PHAU.

I'll bet you that the ETF has not got physical silver to fully back investments.
It is probably being loaned out to short silver,which will suppress the price of silver.
The reasoning is simple:

Banks rely on peoples faith in 'money'.
They can create endless amounts of money at the 'click' of a mouse.

If people lose faith in 'money' and revert back to gold and silver..they are screwed.
So they put an 'easy' investment vehicle to fool people and divert their investment back into 'paper'....an ETF.
These people buy into an ETF,that supposedly then goes into the market and buys and stores phsical silver..and holds it.
Right now there are physical shortages of gold and silver.
Who's selling 'paper contracts' so much to drive the price down ?
The banks.
Get out of an ETF and buy physical...if you can find any.
When you do ,you will not get it at spot price.

TRUSt_NO_1_2

alchemistkevin wrote: »

All good for physical info but does anyone have pointers on which providers (brokers?) to use for ETF's? I'm interested as a short term gamble and don't want to block money in the long term in form of physical gold.

BullionVault.com.
It's a 'brilliant' site (and as easy as it can get)
It's real gold they buy.Allocated.
Not the sort that comes on a roll of 240 sheets (ETF)

TRUSt_NO_1_2

pumpndump wrote: »

If you think that there is going to be hyperinflation, then gold is just the kind of thing. It is better to use gold as a means of preserving your wealth rather than as spending money. For spending money, buy as many cigarettes as you can. Tights/stockings are also good currency.

Electronic cigarettes are here.
They will in time out sell the real thing.

as an example see Gamucci.
If you find the parent company,and they are 'public', and your a long term investor..load up.

MrExample

Just for balance, the other major gold holding service is goldmoney.com (I've used neither this nor bullionvault).

Personally, I'd be very wary about gold as an investment. Unlike stocks and shares, the value of gold doesn't change -- its price does.

It's great for wealth preservation, on the other hand...

ManAtHome

So things go really t1ts up, you contact your bullion-storers to send you your bars, and they send them on rather than legging it..?

Out of interest, just how much (as a percentage of total wealth) are people investing in gold - would have thought it would have to be significant (40%+) to make a difference?

dougz_2

ManAtHome wrote: »

So things go really t1ts up, you contact your bullion-storers to send you your bars, and they send them on rather than legging it..?

It is your personal property so if they did that they would have committed the crime of theft, and you could pursue them accordingly. If a bank goes tits up with your paper money you can only beg.

ManAtHome

Think you missed the "really" - how would you pay the lawyers..?

pjala

A gold etf recently became untradeable, as the "counterparty risk" for the etf was AIG, who would have gone bankrupt had not the US loaned them $80 billion to tide them over.... The etf was frozen for about a week, until market makers were prepared to deal in it again.
The sweet irony of this was that, I bought the etf to counter exactly this kind of risk, and when it happened I could not trade in the risk to provide me with a liquid profit as the etf was not tradeable.

So gold is really quite useful as an investment for dangerous times, but dangerous times mean that the usual process of investing can be also wrought with danger, which means you could loose your ability to trade the gold, or even loose all of your investment due to a problem with the "counterparty risk" of the investment.

The only real alternative is to buy the physical gold bullion in some way as stated above, but if you do that there is a wider spread - up to about 5 to 10% bid offer spread - than buying etf equivalents, as they are less liquid. Also if you buy actual physical gold, it will also detract in value as it is not kept in pristine condition due to it being under your bed.

The third problem is the illiquidity of the actual physical gold under your bed. If the **** actually does hit the fan, and the dollar becomes like the Zimbabwe currency, then how do you get liquid funds from it to buy stuff with it?

There is also a danger in this situation in that burglars can nick it all. If you keep it somewhere else for safekeeping, how can you trust that process in an extreme situation where it may be needed?

Lastly, I bought into the blackrock gold fund through HL, as it seemed like a good idea. But gold went up and it went down in value... Why? because it holds predominantly gold mining shares, which were panic sold as much as other mining/banking/anthything else shares - so undermining the reason for buying the thing in the first place.

The whole gold thing is full of irony, but in the end we have to go along with the system, and hope that it kind of hangs together enough for us all to keep any savings we have....

StevieJ

GOLD.
What is going on? It should be rising in price not falling Willy Wombat must be well hacked off.

dougz_2

ManAtHome wrote: »

Think you missed the "really" - how would you pay the lawyers..?

Which "really"???

You do not pay your own lawyers if you are the victim of theft, the police etc will deal with it for you.