Buying in to Gold

vishpatel

$670 now.

It might sound expensive relative to its price recently.. but gold is still cheap compared to other assets.

The bull is strong

Chrismaths

Cheap by what measure?

vishpatel

"As a point of reference, it is important for investors to realize that the real all time high for Gold is not $850 an ounce. Although the nominal all time high is indeed $850, the inflation adjusted all time high for Gold is closer to $2150. Comparing today’s price of Gold with the price of Gold in 1980, fails to take into account the rise of inflation over the last 25 years. Simply put, $850 could buy you a lot more in 1980 than it can today. In 1980, you could buy a house for under $100,000, buy a cup of coffee for less than a dollar, and put gasoline in your car for under a dollar. Having this perspective, allows you to realize that the price of Gold is still cheap at these levels."

http://www.freemarketnews.com/Analysis/201/4509/2006-04-13.asp?wid=201&nid=4509

Chrismaths

Believe everything you read?

Gold peaked at $850 for one day (21st Jan 1980). The next day it closed at $737. Go to http://www.kitco.com/charts/historicalgold.html then tick 1980 yearly gold, then click charts and data. The average price in Jan, even taking into account the spike, was $675. In Feb 1980, the average price was $665. Be very wary of people who say the peak price of gold was $850 without mentioning this fact.

So in fact what you are saying is that gold is cheap relative to a 1-day spike 26 years ago. Why not say potatos are cheap today compared to what they were during the Irish potato famine?

The equivalent in 1980 money to today's price of $673 is $260-265 /troy oz.
Surprisingly enough what gold cost in mid 1979!

vishpatel

Found this link which discusses the previous spike in 1979/80 and compares it with today
http://www.bullnotbull.com/archive/gold-comments-1.html

From what I can tell, the reasons for the upward push in gold price will continue to be valid for some time to come

amosworks

lol @ bullnotbull :rotfl:

Chrismaths

Actually I've been a gold bull since 2002 - It's made my clients very handsome returns. But I'm taking some money off the table currently, as it seems everyone and his dog wants gold at the moment. When the papers all start writing articles on gold, and the man in the street wants to buy gold, it's time to start thinking about risk - and if this is the beginning of the end of the bull run.

I'm not convinced either way yet - so it's only prudent to take some profits and a watching brief, methinks.

stevo84_2

This is a very interesting thread. I am thinking of investing in gold, again as some measure of insurance rather than an investment and have a couple of Questions's. I have never purchased / nor sold gold (apart from a chain from argos 2 years ago .

OK, if I purchased say £1K's worth of gold coin now (real gold i can hold in my hand), when I want to take it out of my safe in say 20 years time and sell it, how easy do you think it would be to sell? and how would I go about selling it?

Also I noticed this link http://www.goldmoney.com. Is there a simmilar website I can buy gold off but actually have the gold delivered to me?

Thanks to all in anticipation.

Stevo

cheerfulcat

Hi, Stevo,

Baird and Chard are two reputable bullion merchants. Chard is slightly cheaper. They can deliver; Baird also offers a storage service, at a price. There is a useful beginner's guide to buying gold here.

You shouldn't have any trouble at all selling the coins twenty years down the line.

HTH

Cheerfulcat

stevo84_2

cheers cheerful,

I will take a look. I think i need to look in to it a little more to make sure its a good decision but like I say it will be more if an insurance rather than an investment. You can never realy trust computers!

Stevo