Why on earth would anyone buy gold. What can you do with it and just Why really?

Gangstabird

I want to know why people would buy something that in times of crisis is absolutely farking useless.

Gangstabird

I mean it's not like you can eat it or cook with it or do anything with it. Why??????

ad9898_3

Gold is the 'safe haven' when other currencies are being buffeted like the recent times, for instance when the US bailout is agreed, the dollar is likely to be worth the same as toilet paper, the pound has been shakey of late and will be worth less with high inflation and BoE are about to cut rates

Our economic meastro Gordon Brown sold all ours in '99 at the bottom of the market, he is of course a turkey

andys15

Gangstabird wrote: »

I mean it's not like you can eat it or cook with it or do anything with it. Why??????

and you are trying to advice people on these rooms about massive financial issues. did you think it was because people were running out of bling, so they needed more gold bars gangsta.

johnycoldears

Gangstabird wrote: »

I want to know why people would buy something that in times of crisis is absolutely farking useless.

Look, if you've got any you want to get shot of just let me know.

Obviously since it's so useless shall we say £10 per lb ?

amcluesent

>I mean it's not like you can eat it or cook with it or do anything with it. Why??????<

LOL. Another MSEer on the ignore list...

zappahey

andys15 wrote: »

and you are trying to advice people on these rooms about massive financial issues. did you think it was because people were running out of bling, so they needed more gold bars gangsta.

OK then, rather than throw out insults, why not share your wisdom and explain just why gold is seen as a safe haven in troubled times.

I like to think of myself as being reasonably intelligent and I can't see why a chunk of metal that has little intrinsic value should be seen as safe. It seems to me that the value of gold is as much based on sentiment as any other asset or commodity but I'm happy to be enlightened.

WTF?_2

zappahey wrote: »

OK then, rather than throw out insults, why not share your wisdom and explain just why gold is seen as a safe haven in troubled times.

I like to think of myself as being reasonably intelligent and I can't see why a chunk of metal that has little intrinsic value should be seen as safe. It seems to me that the value of gold is as much based on sentiment as any other asset or commodity but I'm happy to be enlightened.

Basically, Gold has been used as a medium of currency in almost all the major civilisations for thousands of years.

It has a number of properties which make it suitable as a store of wealth:

* There's only a limited amount in the world and new gold is being mined at a relatively low rate, so it's not 'inflating' away and is relatively rare.
* It's inert - doesn't tarnish or corrode. Great for longer term storage. You can even chuck it into a hole in your garden - try that with paper notes.
* Because of the rarity it means you can store a lot of wealth in a very compact form. This is where silver falls down, another precious metal. A small brick of gold would be worth as much as a suitcase full of paper notes.
* There aren't many practical uses (main one would be jewelry) so it's not like the available gold is being consumed. Even when it's used for something like jewelry it's almost 100% retrievable to ingot.
* It's physically attractive and pleasing to the eye.
* Because of the long history of gold, it's universally accepted as being precious.

That's why gold has value.

From a financial point of view it makes sense to hold some gold as it's a good hedge against inflation. ie. You can put your money into gold and the value will be preserved because as the currency devalues, the price of gold will rise to compensate. Also, unlike bank credit, it isn't going to go '!!!!!!' along with the bank that's holding your savings account. - so in troubled times when people are worried about losing their life savings it's very attractive to have some.

Beware - the gold market is subject to massive volatility (it has swung between $750 and over $1000 per troy oz in 9 months). Like property, if you buy in at the wrong time you are going to get burned.

Also, unless you are the gambling sort, it's a good idea to limit your exposure to a small amount like 10% of your savings to act as a hedge. That way if strong inflation hits you have the gold to provide some compensation. If we don't get inflation then the gold may lose paper-money value - but your other holdings should balance that out. (Old saying: Put 10% of your net worth into gold and pray it never pays off).

The thing that worries me is that now mainstream media are carrying stories about it and lots of people are thinking about getting into gold. That's normally the time to get out of a financial product (old anecdote about the shoe shine boy giving stock advice springs to mind.....) :think: Sure enough, gold has fallen quote a bit in the last few days after surging on Monday.....

Realy

!!!!!!? wrote: »

Basically, Gold has been used as a medium of currency in almost all the major civilisations for thousands of years.

It has a number of properties which make it suitable as a store of wealth:

* There's only a limited amount in the world and new gold is being mined at a relatively low rate, so it's not 'inflating' away and is relatively rare.
* It's inert - doesn't tarnish or corrode. Great for longer term storage. You can even chuck it into a hole in your garden - try that with paper notes.
* Because of the rarity it means you can store a lot of wealth in a very compact form. This is where silver falls down, another precious metal. A small brick of gold would be worth as much as a suitcase full of paper notes.
* There aren't many practical uses (main one would be jewelry) so it's not like the available gold is being consumed. Even when it's used for something like jewelry it's almost 100% retrievable to ingot.
* It's physically attractive and pleasing to the eye.
* Because of the long history of gold, it's universally accepted as being precious.

That's why gold has value.

From a financial point of view it makes sense to hold some gold as it's a good hedge against inflation. ie. You can put your money into gold and the value will be preserved because as the currency devalues, the price of gold will rise to compensate. Also, unlike bank credit, it isn't going to go '!!!!!!' along with the bank that's holding your savings account. - so in troubled times when people are worried about losing their life savings it's very attractive to have some.

Beware - the gold market is subject to massive volatility (it has swung between $750 and over $1000 per troy oz in 9 months). Like property, if you buy in at the wrong time you are going to get burned.

Also, unless you are the gambling sort, it's a good idea to limit your exposure to a small amount like 10% of your savings to act as a hedge. That way if strong inflation hits you have the gold to provide some compensation. If we don't get inflation then the gold may lose paper-money value - but your other holdings should balance that out. (Old saying: Put 10% of your net worth into gold and pray it never pays off).

The thing that worries me is that now mainstream media are carrying stories about it and lots of people are thinking about getting into gold. That's normally the time to get out of a financial product (old anecdote about the shoe shine boy giving stock advice springs to mind.....) :think: Sure enough, gold has fallen quote a bit in the last few days after surging on Monday.....

But hav ya got a big rope chain and a knuckle dusta!;)

Treadmill

Nows a good time to go door to door buying up scrap gold, people need cash and will sell it for less than its worth, don't worry about the qualityof the jewellry or whether its an articulated clown pendant, or a pair of boxing gloves on a chunky chain... its still worth the same as any other gold

Generali

Gangstabird wrote: »

I mean it's not like you can eat it or cook with it or do anything with it. Why??????

People see it as a good long term store of value. An oft-cited example is that a Roman citizen could dress well for an ounce of gold. An ounce of gold would still buy you a nice outfit.

The thing is, if you'd bought an acre of land 2000 years ago instead and invested the rents in buying more land then you'd probably own the whole of Suffolk or something if you'd managed to keep hold of it during invasions and whatnot.

I think gold is a pretty lousy investment generally as it pays no income of any sort. I can understand the mindset of the person that wants to keep some and if I was rich then I'd probably have a little stashed away somewhere.