Investment in gold???

Bigguy201_2

I have about £2000 to invest, but I dont really know much about gold, just that it comes in bars etc. Is it a wise investment? would a good return be expected if I bought it from a company like goldline?

I think martin lewis will be talking about it on friday (6th) on the Tonight program ITV1 but I wanted to get ahead of the rush.

I also got £23,000 in an ISA that matures in June, its it worth taking it out and investing in gold etc?

Thanks in advance for your help

mw2655

hi,

gold is as i type about $915 and oz and about £625 an oz.

think of gold as a way to preserve you capitol rather than a
way of making money.

eg with the recent devaluation of the £ by 40% ish if you had had
money invested in gold in the form of GBS shares the dollar price
would have stayed about the same but the pound price would have risen.
so it look like you've got more money, more pounds but they are worth less
now...


your options with regards to gold are...

physical gold, eg 1 oz gold coins eg krugerrands

but you'll pay a premium above the spot gold price,
andyou've go to store them somewhere.

shares, eg PHAU(can be held in shares ISA) or GBS

or a fund eg blackrock gold and general, which invests in gold
mining companies and goes up and down more than the spot
price.


cheers matt.

these are basically 1/10 of an oz shares

Bazn

people have short memories.

It does not always preserve capital. gold can go down as well as up. from 1980 to 2000 it declined from about $800 to less than $300. in other words, a slow painful death. don't buy gold without keeping this in mind.

Having said that, gold does look like its on the up right now.

however, other safer places for capital preservation would be NS&I index-linked certificates, or alternatively, index-linked gilts.

sh856531

Everyone was talking about how everyone would stampede to gold due to the crapness of the dollar, and how it was about to collapse due to all the debt the US administration was about to take on. I even thought about buying gold briefly as the band wagon went past.

The thing that stopped me was the gradual realisation that the dollar may be in the brown stuff, but more importantly, so are all the other currencies. And given that most of the important currencies trade freely relative to one another, if they all go down, the dollar will retain its relative purchasing power.

So, in short, a jump to gold seems a bit pointless (IMHO) due to the fact that all the major currencies are in roughly equal amounts of "$%^. Another little (pointless) factlet is that I actually only know people who have lost money on gold - I don't know anyone who has made any money (though clearly there are some!). As Bazn said above - gold is not a sure bet so go in with your eyes open...

Best Regards

S

cloud_dog

sh856531 wrote: »

So, in short, a jump to gold seems a bit pointless (IMHO) due to the fact that all the major currencies are in roughly equal amounts of "$%^. - As Bazn said above - gold is not a sure bet so go in with your eyes open...

I think you are confusing two aspects. One being gold as a store of value, with its value being reflected as a fiat monetary number (USD or GBP), and the other with exchange rates.

As you say a lot of currencis are in the brown stuff and so currency parity will to a lrger or lesser extent remain similar but........... if currencies weaken then assets will inflate.

sh856531 wrote: »

Another little (pointless) factlet is that I actually only know people who have lost money on gold I don't know anyone who has made any money (though clearly there are some!).

Well my daughters CTF (invested in Gold & Silver) is at its highest GBP value even though Gold & Silver are off their peaks. This is primarilly down to the GBP falling against the USD but proves how it can retain value.

Would very much agree with your last / Bazn point.

cloud_dog

tradetime

Gold is pretty pricey here imho. Don't think I'd chase it.

cloud_dog

Since Merrill exec recently came out with a gold will hit USD1500 in the next 12-18 months (again - like they did last October) I'm waiting for the wheels to momentarilly fall off the gold bus.

sabretoothtigger

gold is like no other investment and operates to its own logic

For rich people 5% in gold is the standard advice I've seen.
So your 2k would have to represent 40k you have on the market presently invested otherwise people would say you are gambling not investing which is fine if thats what you want to do

Gold is a commodity and apparently also the worlds reserve currency. If the american dollar were to collapse it would rise greatly I presume. USA has 11 trillion of debt, spends 20% of its tax revenues on paying interest and is proposing to spend a trillion more.

I think to consider investing in gold especially if your over 5% you have to be thinking of all those factors in play. If you've no idea then just admit that and limit your involvement and stops


http://moneycentral.msn.com/content/invest/extra/P143352.asp

Another little (pointless) factlet is that I actually only know people who have lost money on gold - I don't know anyone who has made any money (though clearly there are some!). As Bazn said above - gold is not a sure bet so go in with your eyes open...

If gold falls 10% and the markets fall 30% on average then its a successful investment imo


Commodities and and currencies are like black magic to me, a combination of the two must be a nightmare to predict tbh and highly volatile since its real basic worth is 100 dollars an ounce?

Bigguy201_2

bit of a mixed bag of opinions then

sh856531

> 2008: The year in markets

That's a quality table Sabre - very helpfull

If gold falls 10% and the markets fall 30% on average then its a successful investment imo

It's a good point, but lets bear in mind that the gentleman is talking about investing *now* not 2 years ago. I'm definately no expert, but I'm guessing alot of the market/currency uncertainty has already been priced into gold right now meaning its not necessarily such a good buy as it was a while back...

Best Regards

S

Asheron

If you put that £2000 in Gold 5 Months ago you would be up £600 Today

It has gone from £550 oz (5 months ago) to £750 oz (today) Physical not Paper

And people said I was crazy when I told them to buy it, lol

a crazy conspiracy theorist, LOL

Get in now, its hard to get, it's going Up UP UP probably $2000 oz by August