Investments

thebladerunner

on the subject of investing in gold does anyone have any experiance of
organisations such as the bullion vault compared to purchasing bullion or coins independantly?

jon3001

thebladerunner wrote: »

on the subject of investing in gold does anyone have any experiance of
organisations such as the bullion vault compared to purchasing bullion or coins independantly?

No experience as such - I'm in silver myself.

Most of my holdings are through an ETF (symbol PHAG). HSBC hold the silver bullion which is allocated to the ETF. You can then buy/sell conveniently throught your stock broker. You pay usual share dealing costs and a 0.5% annual fee but the prices are pretty close to spot.

I also hold some 1oz American Silver Eagle coins which I bought in Las Vegas. Premiums over spot are a lot higher (there is a cost involved in producing/trading such coins) although it's largely retained on resale. Buying/selling is more involved - through coin dealers/Ebay etc.

So - returning to your question on gold. I'd say systems like Bullion Vault are probably cheaper and more convenient than trading bullion coins. But some people feel they acutally want the gold in their own possession - particularly after seeing many major financial institutions going under lately. And if you hold British gold bullion coins then there are tax advantages as I mention.

thebladerunner

Thanks for the reply jon3001 but i must have missed your mention of tax advantages when holding British gold bullion coins and what do you feel the attraction is in holding silver rather than gold . After the events of the last few weeks like many people i dont feel comfortable with paper even when its
supposedly guaranteing my ownership of metal

jon3001

thebladerunner wrote: »

i must have missed your mention of tax advantages when holding British gold bullion coins.

Post #2. Basically no CGT liability which could be a potential issue if you hold, say, Krugerrands.

thebladerunner wrote: »

what do you feel the attraction is in holding silver rather than gold .

The movements of the two metals are strongly correlated but there's also something called the gold:silver ratio (Price of Gold/Price of Silver). The average over the past 40 years or so has been 55. Today it's about 80 so on a historical basis silver is cheap compared to gold.

Whether silver will appreciate or gold will decline further to narrow the ratio - who knows?

Silver is much more volatile though. The market is smaller and the metal also has industrial and hi-tech applications. So with the current recession this could play against the metal. But as things improve demand will increase and, with the market being small, supply will be squeezed - so you'd expect an appreciation in prices.

Personally I'm taking a long-term approach with this and precious metals have a small role in my portfolio. If silver should appreciate then I may well be selling some of those holdings and diversifying into gold.

If you do consider silver though then one drawback (compared to gold) is that it's liable for VAT. That's why I bought my physical bullion in the US. The ETF holds its silver offshore so they got around it.

Reaper

If you want more tax free options there are Friendly Society savings, but the tax free advantages tend to be wiped out by charges and a small life insurance element.