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

moanymoany

One could always invest in green. I remember the rapture on Sir Percy's face when he showed Blackadder his 'finest lump of green'.

What about investing in diamonds?

Max_Headroom_3

Diamonds is an excellent example!

Given that the properties are similar to gold (pretty, used mainly in jewellary but some commercial applications, limited number and supply), why don't people do on about investing in diamonds like they do gold?

Apart from the historical link to money for gold (now no longer valid), what's the difference?

Realy

moanymoany wrote: »

One could always invest in green. I remember the rapture on Sir Percy's face when he showed Blackadder his 'finest lump of green'.

What about investing in diamonds?

Or turnips? (Baldric)

Diamonds are a great one the strongest thing known to man, virtually indestructible and can not be recreated.
I do not think diamonds have many competitors in usefulness compared to gold.

Good point I presume you mean gold could of been anything, we could have turned to turnips in troubled times if they were held in such high regard.

sdooley

Sovereigns are exempt from CGT - which is generally seen as a good thing. But they are more expensive as a result.

Also, being exempt from CGT means that if you have to sell them at a loss you can't set that capital loss off against any other investment gain you have made that year.

jim83

Diamonds aren't equatable to gold because they are not divisable. If you take a diamond and chop it in half, it is no longer worth as much as it was when intact. Precious metals are valued by weight.

Gold can be regarded as a de facto currency in itself, thus it is valuable in the same way that pounds or dollars are. On the face of it, they are just a lump of metal and pieces of paper, but they have value relative to their scarcity. The only real difference between paper currency and gold is that you cannot print more gold and as such gold does not devalue over time.

Personally, I am very bullish on gold (physical, not necessarily ETFs) and in the past 6 weeks I have shifted over 20% of my cash savings into it. I plan to shift a further 5% tonight if the stock markets spike as a result of the US bail-out passing in the house. I also have a small stash of silver coins as an emergency fund.

Max_Headroom_3

jim83 wrote: »

Diamonds aren't equatable to gold because they are not divisable. If you take a diamond and chop it in half, it is no longer worth as much as it was when intact. Precious metals are valued by weight.

That is a good and interesting point.

Cleaver

I for one am sick of all these people now buying gold as an 'investment' with little or no regard to others.

Ten or twenty years ago your average joe in the street could buy enough gold for their own personal usage, but all these people buying up gold here there and everywhere stops people getting their first small gold ring, or necklace, which they are entitled to.

FTJ (First Time Jewelers) are finding it harder and harder to get enough gold together to open up a shop as all these sepculators, who know nothing about gold, pile in to make a quick buck.

Personally, I blame all these C4 programmes such as 'Other People's Gold', 'Gold, Gold, Gold', 'Gold Ladder' and 'Gold in the Country'. It is these irresponsible shows that create the image that gold only goes in one direction (up) and encourages people who know nothing about the precious metals world to think they can overstretch themselves.

I'm off to set up www.goldpricecrash.co.uk.

martinman3

Realy wrote: »

Or turnips? (Baldric)

Diamonds are a great one the strongest thing known to man, virtually indestructible and can not be recreated.
I do not think diamonds have many competitors in usefulness compared to gold.

Good point I presume you mean gold could of been anything, we could have turned to turnips in troubled times if they were held in such high regard.

Diamonds are actually very easy to destroy, as it is just carbon they burn like graphite does. They are also very common and naturally occur in many locations in the world. The market price of diamonds is directly controlled by limiting supply. They can also be created artifically. All reasons why they cannot be safely used as money.
What is not common is a flawless natural diamond but how would the man/woman on the street tell a flawless diamond from a flawed one to be able to safely use it as money ?

Cleaver

jim83 wrote: »

Gold can be regarded as a de facto currency in itself, thus it is valuable in the same way that pounds or dollars are. On the face of it, they are just a lump of metal and pieces of paper, but they have value relative to their scarcity. The only real difference between paper currency and gold is that you cannot print more gold and as such gold does not devalue over time.

Is there a danger with gold that someone might find a great big massive heap of the stuff underground somewhere which devalues it?

I ask as someone who knows nothing about gold, not as someone who's doubting what you're saying.

Realy

martinman3 wrote: »

Diamonds are actually very easy to destroy, as it is just carbion they burn like graphite does. They are also very common and naturally occur in many locations in the world. The market price of diamonds is directly controlled by limiting supply. They can also be created artifically. All reasons why they cannot be safely used as money.
What is not common is a flawless natural diamond but how would the man/woman on the street tell a flawless diamond from a flawed one to be able to safely use it as money ?

One more common flaw is your post.
If you have got the sun handy you could melt one at 3550C.:eek: Or 300,000 atmospheres of presure you could crush one (but only if you did not apply it slowly):eek:
We can not re create a diamond, try to cut a diamond with a diamante ring.:rotfl:
We can not create the presure or the heat to turn coal in to daimonds!
I like your effort but at least base it on fact.:rolleyes:
I think you should have taken notice that science lesson as it was more than likely ruby's. (aluminium oxide based I think)