Buying precious metals?

cheerfulcat

amosworks wrote:

So can one actually buy gold, platinum or palladium etc and actually go pick it up then come home and bury it in your back garden?
I assume that's what's meant by "holding the physical, and not the paper"?

Yes, that was what was meant and yes, you can do that, at least with gold, silver and platinum. Though it's usually best to keep it in safe storage, either with the merchant or in a safe deposit box.

sambessey wrote:

I would disagree on not seeing gold as an investment. Perhaps I am being naive here, but Its value fluctuates in the same way stocks etc do, and surely money can be made effectively by purchasing and selling bullion at the right time just as easily as shares in Microsoft?

But that is not gold as investment, it is gold as an instrument of speculation on the price of gold - given the wide spreads when buying the physical and the cost of storage, ETFs or spreadbets would be a better vehicle. For investment purposes, a fund would be preferable or, as Ed says, shares in a selection of miners.

cheerfulcat

amosworks wrote:

How does one actually go about buying gold to put in their home safe?

A bullion merchant such as Baird or Chard.

cloud_dog

Oooh, so many points to comment on and soooo many angles to consider..............

Easy one first, buying physical gold.

You could always go down to your local gold bullion merchant (or off the internet - search "gold" "sovereign", found many, try http://www.taxfreegold.co.uk/) and buy gold coins, i.e. Sovereign, Krugerrand, Maple Leaf, etc. If you want to take this route and as you are in the UK I would suggest taking the Sovereign route as they are still legal tender (I believe).

Re funds/ investment vehicles I am a bit of a fan of Central Fund of Canada and also (GBS.L) LYXOR GOLD BULLION.

cloud_dog
(end of part one )

cloud_dog

The commodities bull run................ Soooo many opinions - But I am a bull and see this cycle continuing (no doubt with corrections on the way - need to stress this bit) for at least the next 10 - 15 years. Previous commodity bull runs have, on average lasted 18 years - we are approx 4 or 5 years into this one.

The reason for the long lifespan is that when commodity prices are low business do not invest in exploration or increased production, and when the prices rise the lead times in getting a mine operational (once you've found it) are a number of years.

Price of Gold........... interesting as a number of other factors affect it. As previously mentioned political tension / conflicts are having a large affect on the value of gold at the moment but, there are other factors at play..........

...........Gold Reserves, over the last few decades (but notable recently) governments have been selling / reducing their gold reserves and this has been for one primary reason with one effect:

• Reason - To support the intrinsic value of fiat money (£, $, etc), i.e. remove the link between a currency's value and the country's gold reserves (old gold standard) and allow its value to be a reflection of the economy / strength of that country's finances.

• Affect - This slow release of gold reserves has been to reduce the need to find / mine gold

The other reason the value of gold is rising, and this is linked to the above, is that the intrinsic value of the US$ is falling. You need to remember that the dollar is the worlds currency and everything is priced in it. The US$ is depreciating. From memory (would need to find this info again to be 100%) it is now worth, in real terms, 40% less than it was in 1999, and gold tends to reflect a value of the US$ (this is not absolutely true but a general ‘rule of thumb’) – hence the rise in the value of gold. Unless the new Fed chair (Ben) can pull a rabbit out of the proverbial hat I do not see this reducing, i.e. I think the US will inflate their way out of trouble, again allowing the value of gold to continue to rise.

Other things to consider:

• The reason the US$ has been able to command a value over its real value for so long has been because most things in the world are traded in dollars, i.e. oil, etc, and therefore the demand for dollars has always been there – the Fed just keep printing the stuff. This is likely to reduce, i.e. more trades in the Euro, possibly in a number of years to come the Yuan.

• Additionally, foreign country’s who hold US$ debt (treasury bonds, etc) will / are getting nervous about holding so much of their trading surpluses in dollars that they will begin swapping it for Euro’s, etc, but just as important Gold. China for instance currently holds very little gold (comparatively), even some of the oil rich Arabian states are starting to purchase more gold.

I know this has swung very much to the dollar, what its doing, and what affect will it have but based on my research the loss of belief / credibility / value of the dollar will have a significant affect on the manner country’s do business and the value of certain things, i.e. gold.

As I said I am bullish on commodities (in general) but, would I buy into Gold at the moment – possibly not; I think (hope) there is a correction around the corner – obviously I don’t have a crystal ball so who knows.

cloud_dog
(p.s. I apologise for the essay)

amosworks

Oh my life. All those lovely pictures of gold bars got me salivating. I'd love to save up enough for one of those. Maybe if I stop eating for a year?

Or just wait until I finally get debt free :rolleyes: (2 months now, fingers crossed)

Thanks for the links matey!

cloud_dog

Oooh, I forgot (sorry)..................

One of the other reasons I see it continuing for some time is because of demand (obvious I know) but..........

The industrialisation of the West created huge demand; the industrialisation of the East is going to dwarf that by a factor of (I don't know), a number of times. You think of the population of the East (not just China and India although they are the main ones) and it far exceeds the industrialised West. This is what is going to continue to drive / increase demand for a little while yet.

Edit: forgot to say but, with industrialisation comes wealth; not necessarily a good thig but thats the way it goes.

cloud_dog

Edit 2: Amos how about a couple of Sovereigns dangling of your fingers :-)

amosworks

cloud_dog wrote:

Edit 2: Amos how about a couple of Sovereigns dangling of your fingers :-)

Nah the chav's can keep them. I'd rather have some security later on in life than low-grade bling which I'll have to pawn in at cash converters when my dole cheque is late

ellie14

I dont feel it does no harm to have a little tucked away in gold done it for years ,have reliable source to buy ,and reasonable,we are talking the hard stuff here bars or chain,when the price goes up you cash it in,ask for more info,,,,