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

Max_Headroom_3

!!!!!!? wrote: »

Bullionvault isn't paper gold. You are holding a share of real gold, held in vaults in London, Zurich and New York (you choose where to buy). Well, that's what they say and I believe them Basically, you trade with other BV members and they also buy in gold from the market.

Hmmm... and when you deposit £1,000,000 with a bank they hold that £1,000,000 for you too. Right up untill the point where they fall over and suddenly those bank notes in your name no longer exist.

I wonder if bullionvault did fall over and you turned up at the door and asked the receivers for your bar of gold, whether they'd actually go and fetch it for you..?

WTF?_2

Max_Headroom wrote: »

Hmmm... and when you deposit £1,000,000 with a bank they hold that £1,000,000 for you too. Right up untill the point where they fall over and suddenly those bank notes in your name no longer exist.

I wonder if bullionvault did fall over and you turned up at the door and asked the receivers for your bar of gold, whether they'd actually go and fetch it for you..?

It's somewhat different. Once you buy the gold you own a share of a tangible asset in a vault. Once you give your 'cash' (more likely, bank credit from somewhere else) to a bank it becomes numbers on a computer somewhere and the bank then leverages the new capital as heavily as it possibly can.

That's why when a bank goes bust, depositors generally only get a fraction of their savings back.

In theory, if BV went into liquidation then the gold would be sold at market value and you'd get your share, because it's owned by the individuals who bought it. Think of it like a safety deposit box.

There would be a real risk if the bank running the holding account used to trade (Lloyds) went belly-up with a load of your cash in the trading account though.

Realy

!!!!!!? wrote: »

It's somewhat different. Once you buy the gold you own a share of a tangible asset in a vault. Once you give your 'cash' (more likely, bank credit from somewhere else) to a bank it becomes numbers on a computer somewhere and the bank then leverages the new capital as heavily as it possibly can.

That's why when a bank goes bust, depositors generally only get a fraction of their savings back.

In theory, if BV went into liquidation then the gold would be sold at market value and you'd get your share, because it's owned by the individuals who bought it. Think of it like a safety deposit box.

There would be a real risk if the bank running the holding account used to trade (Lloyds) went belly-up with a load of your cash in the trading account though.

Also is there not a risk they do not have much gold in their vault as they have sold?
Also how much gold in reality is there available? Surely there as got to be a stage or that stage as passed that the gold being sold does not actualy and never will exist.

WTF?_2

Realy wrote: »

Also is there not a risk they do not have much gold in their vault as they have sold?
Also how much gold in reality is there available? Surely there as got to be a stage or that stage as passed that the gold being sold does not actualy and never will exist.

They claim that all gold actually exists - and have various documents and statements of accounts to prove it.

If you're really interested, you can go to their site and read the info.

Personally, I'd prefer to have real physical gold but that introduces a lot more complications and problems to worry about (buying, storage, selling) so this is the next best thing. Better than ETFs anyway.

Realy

!!!!!!? wrote: »

They claim that all gold actually exists - and have various documents and statements of accounts to prove it.

If you're really interested, you can go to their site and read the info.

Personally, I'd prefer to have real physical gold but that introduces a lot more complications and problems to worry about (buying, storage, selling) so this is the next best thing. Better than ETFs anyway.

Sorry I think my question was a bit unspecific.
In the world as more gold been sold than available? If you know what I mean.
So is it possible gold is oversold?

Dithering_Dad

!!!!!!? wrote: »

They claim that all gold actually exists - and have various documents and statements of accounts to prove it.

If you're really interested, you can go to their site and read the info.

Personally, I'd prefer to have real physical gold but that introduces a lot more complications and problems to worry about (buying, storage, selling) so this is the next best thing. Better than ETFs anyway.

I saw in the news that sales in safes are going through the roof. I'm assuming most of this is to store cash savings withdrawn from banks, but I'd imagine a few people are also buying gold coins (free of VAT and Capital Gains) and storing them in their new safes.

Could be a boom time for safe crackers

lotto-dreamer

What about buying gold shares instead of buying bullion? (Okay, bit late, stock is going up too quickly perhaps)


Just read this article:

"JOHANNESBURG, Oct 10 (Reuters) - South African gold stocks soared on Friday, led by a 10 percent rise in Gold Fields (Brussels: GFLB.BR - news) ' shares, powered by a strong jump in gold prices, while most other stocks fell on the spreading global credit crisis.
'There's a bit of a scramble for gold in this environment of uncertainty. There's a lot of capital chasing gold,' said Ferdi Heyneke, a portfolio manager at Afrifocus Securities"



http://uk.biz.yahoo.com/10102008/323/s-african-gold-shares-soar-tracking-metal-s-price.html

Gangstabird

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.

This was a joke, like camping, you either love it or you don't. Many people have bothered themselves putting me right whilst I would buy gold.

It was about having potatoes in one field and onions in another, the next in lambs, then gold.

No good buying Gold if you can't feed your family.