Buying in to Gold

Browntrout_2

http://www.galmarley.com/framesets/fs_commodity_essentials_faqs.htm

How much gold is there ?

In the world there are currently somewhere between 120,000 and 140,000 tonnes of gold ‘above ground’. To visualise this imagine a single solid gold cube with edges of about 19 metres (about three metres short of the length of a tennis court). That's all that has ever been produced.
Divided amongst the population of the world there are about 23 grams per person, about 1.2 cubic centimetres each. This equates to about $250 - $350 worth per person on Earth, depending on the current price.

$654 today, hoarding/holding physical coins (bars are too heavy) would be good for portability, i.e. you could buy your way out of trouble, pay the ferryman etc, however you'd also need a firearm to hold on to it!

I currently trust in the system and hold it virtually in the shape of Specialist Unit Trusts, searching Citywire for 'Gold Funds' shows these four;


Merrill Lynch Gold & General Inc

Nucleus Global Gold & Resources Inc

Investec Global Gold A Acc

CF Ruffer Baker Steel Gold O Acc

carnet

Browntrout wrote: »

I currently trust in the system and hold it virtually in the shape of Specialist Unit Trusts, searching Citywire for 'Gold Funds' shows these four;


Merrill Lynch Gold & General Inc

Nucleus Global Gold & Resources Inc

Investec Global Gold A Acc

CF Ruffer Baker Steel Gold O Acc

These are essentially equity funds (Nucleus has a "MOB" of £5K) investing in the shares of gold miners and, as such, performance could exceed or lag the actual gold price - and rely, to a certain extent, on the individual manager's skill.

A purer (and cheaper) play might be an Exchange Traded Fund such as ETFS Gold (BULL) which is based on gold futures (but thereby having some counter-party risk) or, as an even purer play, one which actually holds the physical metal such as Lyxor Gold Bullion (GBS), ETFS Physical Gold (PHAU) or BullionVault.

Whilst currently holding a sizeable gold weighting I am tending to favour silver as having even more upside potential in the medium term - ETFS Silver (SLVR - futures), ETFS Physical Silver (PHAG), Central Fund of Canada (CEF - 50/50 gold/silver).

You could even hedge your bets with ETFS Physical Basket (PHPM) which is 42% gold, 26% silver, 20% platinum and 12% palladium.

Bazn

i really dont subscribe all of this spiel about gold being "real money" and everything else being paper.

gold is only worth what we want it to be worth. it is governed by supply and demand. it is actually not that useful a metal... there are a few specialist applications, and of course jewellery. why are people so obsessesed by its supposed "intrinsic value"? what good it a big block of gleaming metal ever going to do for you?

it only has value because people ascribe value to it. which makes it little different to the £10 pound note in my wallet.

furthermore, it yields nothing at all, so if the price stays the same you actually lose money in real terms.

in conclusion, all the hype about gold is pure speculation... i would much rather invest in shares of companies that actually DO something, or property, which actually has some intrinsic value (albeit inflated at the mo)

cloud_dog

Bazn wrote: »

it only has value because people ascribe value to it.

But, isnt that the WHOLE point (sorry to shout). The fact that Gold (PM's) physically have a value attributed to them is the absolute difference of fiat money. Fiat money, technically, has no value, it is a promise to deliver the face value.

Bazn wrote: »

furthermore, it yields nothing at all, so if the price stays the same you actually lose money in real terms.

I agree BUT, fiat currency including the GBP but especially the US$ is actually loosing value, i.e. it takes more to but the same physical item.

I know I'm focussing on fiat money, as opposed to stocks etc, but people in the western world are expereincing a situation where they feel as though they are (realtively) wealthy because a lot of the products they buy are (relatively) cheap - China etc - but in reality the value of their GBP / US$ etc in their pocket is depreciating considerably. At some point this will come home to roost, although I may not be around to see it - so it could be a while

cloud_dog

cheerfulcat

Bazn wrote: »

i really dont subscribe all of this spiel about gold being "real money" and everything else being paper.

But it's true - gold has been a universal medium of exchange more or less since Man first discovered it. Paper is just paper. Don't forget that the gold standard for that paper was abolished within living memory...

gold is only worth what we want it to be worth. it is governed by supply and demand. it is actually not that useful a metal... there are a few specialist applications, and of course jewellery. why are people so obsessesed by its supposed "intrinsic value"? what good it a big block of gleaming metal ever going to do for you?

The trouble with fiat money is that the supply is unlimited - governments ( and of course forgers ) can print any amount of it. There is only a finite amount of gold in existence.

it only has value because people ascribe value to it. which makes it little different to the £10 pound note in my wallet.

Your £10 note is losing value as it sits there in your wallet.

furthermore, it yields nothing at all, so if the price stays the same you actually lose money in real terms.

See above...

in conclusion, all the hype about gold is pure speculation... i would much rather invest in shares of companies that actually DO something, or property, which actually has some intrinsic value (albeit inflated at the mo)

Gold is a " safe haven " for when things go pear-shaped, as they will sooner or later ( they always do! ). It is not a bad thing to have a small amount of exposure to gold in a wider portfolio of investments.

free4440273

cheerfulcat wrote: »

Gold is a " safe haven " for when things go pear-shaped, as they will sooner or later ( they always do! ). It is not a bad thing to have a small amount of exposure to gold in a wider portfolio of investments.

can someone - yourself perhaps cheerfulcat - just let me know, once and for all, what this 'exposure' should consist of: is gold coinage acceptable as a good, worthwhile exposure. also, if yes, why do people keep banging on about only buying British Britannia coins? Surely, the American Gold Eagle would be worth even more? Also, from my limited knowledge, I have been told that with regards to gold coinage, the aesthetic (i forget the proper word, it begins with N) of the coinage matters. With this in mind, I actually favor the American Eagle and also the Australian kookaburra coins. Am i just misinformed or ignorant or both? Also, should one demand a certificate from the supplier stating the actual gold content, authenticity etc? Thanks all for your help.

cheerfulcat

Hello, free,

Physical gold is ( purely IMO ) the best way to invest in gold. It is unfortunately also the most expensive, as the gold needs to be stored somewhere, and there is quite a wide ( 5% from memory ) spread in the price. I am wary of the trackers because I'm not quite sure how they work and there is no proof that the ones which claim to hold the physical actually do so. If a fund is using derivatives that can get pretty risky.

I suppose the Britannias are suggested because they are bullion coins.
You can read about investing in gold on Chard's website, here.

HTH

Cheerfulcat

free4440273

Thanks cheerfulcat.

ramellous1

Free, I think the "N" you are thinking of is numismatic value. Also British coins are exempt from any capital gains tax made on large profits as they are a coin of the realm.

free4440273

ramellous1 wrote: »

Free, I think the "N" you are thinking of is numismatic value. Also British coins are exempt from any capital gains tax made on large profits as they are a coin of the realm.

yes, indeed. thank you!