Gold Hits Fresh Most-Active-Record High

kabayiri

I'll be honest here. I've got a bit of gold.

Not much logic in my buying plan, just took the advice of my bro-in-law who is a commodities trader on the other side of the pond.

dopester

tommy75 wrote: »

So you think we are at a peak for gold?

Tommy, the way I look at it, with £690 cash or in my deposit account.... I'm seeing more and more things to buy at value in the real world. Gold at £690 a kruger doesn't look value to me personally.

Increasing numbers of people are counting the pennies and the pounds to get by each day. There is less money chasing goods and prices of many items (not all) are falling, or can be bargained on. Deals to be had if you have cash to buy, and hopefully more to come.

Also I needed to liquidate my (small) gold holding as I need to have as much real money set aside when it comes to buying my first home, but I am expecting further house price falls during the next 3 years. So I personally wouldn't want to exchange money which is becoming ever more precious, for gold bullion at these prices.

On the otherside though, huge deficits, huge levels of personal debt, scenarios where we could have serious collapse of money itself, possible banks going under with further deflation, wealth taxes, or money becoming cheapened fighting deflation to the end until hyperinflation.... those risks do exist. Who am I to claim gold is totally over-valued when many an extraordinary risk exists?

I've got a very small 5oz holding of gold and a few hundred pounds worth of 1oz Silver bullion coins for that eventuality, which I hope never to see pass - because it really would be seriously difficult times indeed if we saw near total economic collapse.

treliac

dopester wrote: »

Regulars here know I'm honest....

I think we'd grant you that dopester.

kabayiri

I should qualify my gold comment.

The same bro-in-law who suggested gold to me, didn't think much of a purchase I made of a 'modern art painting' in Toronto (for modern art, just substitute 'pretentious crap'!).

That painting sold recently for just under 8000 cdn dollars, 3 times the purchase price. Makes the return on gold look paltry.

(....still a crap painting though)

HAMISH_MCTAVISH

dopester wrote: »

I've got a very small 5oz holding of gold and a few hundred pounds worth of 1oz Silver bullion coins for that eventuality, which I hope never to see pass - because it really would be seriously difficult times indeed if we saw near total economic collapse.

The thing is, in the event of total economic collapse, gold and silver would become worthless. Food, fuel, salt, ammunition, firearms, etc would become the currency of choice.

Shiny metal? Not much good for survival purposes.....

So it's only of use if we get "near" economic collapse, such as a zimbabwean hyperinflation episode. But even then, I'd rather have a house. Gold doesn't keep you warm and dry at night, and you can't charge people to live in a Krugerand....

tommy75

dopester wrote: »

Tommy, the way I look at it, with £690 cash or in my deposit account.... I'm seeing more and more things to buy at value in the real world. Gold at £690 a kruger doesn't look value to me personally.

Increasing numbers of people are counting the pennies and the pounds to get by each day. There is less money chasing goods and prices of many items (not all) are falling, or can be bargained on. Deals to be had if you have cash to buy, and hopefully more to come.

Also I needed to liquidate my (small) gold holding as I need to have as much real money set aside when it comes to buying my first home, but I am expecting further house price falls during the next 3 years. So I personally wouldn't want to exchange money which is becoming ever more precious, for gold bullion at these prices.

On the otherside though, huge deficits, huge levels of personal debt, scenarios where we could have serious collapse of money itself, possible banks going under with further deflation, wealth taxes, or money becoming cheapened fighting deflation to the end until hyperinflation.... those risks do exist. Who am I to claim gold is totally over-valued when many an extraordinary risk exists?

I've got a very small 5oz holding of gold and a few hundred pounds worth of 1oz Silver bullion coins for that eventuality, which I hope never to see pass - because it really would be seriously difficult times indeed if we saw near total economic collapse.

While I would look to pick up a few sentimental birth year coins at some point, I still don't want to lose big amounts of money that could of gone towards a bigger deposit to a home. Priorities are a home but its getting boring looking into the abyss of fast increasing amounts of hard earned to put down on a unafordable small box. As you mention, extraordinary risks in all markets exist as everything seems to be at peak and only deflation should prevail. Only Injin can explain why deflation never existed and never will but thats another story I don't really understand. If we are in extraordinary times and this government seems hell bent on printing funny money forever, gold doesn't look so peaky after all and £695 ish still just the start?

rl290

Really2 wrote: »

I cant live in bullion. (or you would need a fair bit to live in it)

Houses hold a different kind of value.
I think has a comparison BTL is more like shares than gold. (go up and down but also pay a dividend (rent)
Owning to live in is like neither.

Agreed
We are talking about INVESTING. The house you live in is a financial LIABILITY and not an asset*. The ONLY exception to this is if you plan to downsize later on in life. Of course, I am not saying that owning a house, and paying off a mortgage, is not a worthy thing to do - it is. But it is not financial investment - it is "life" investment, like buying an air conditioning unit. Costs money, but increases standard of living and security.

Investing in property means either buy to let, property renovation projects (which you then sell on), or any other property scheme where you spend money to gain an income-making asset/increase the value of an asset to sell it.

R

* Before accountants tell me that it's a balance sheet asset, I'd like to point of that so are many other things that lose money for companies.

rl290

Forgot to say, I think they're still plenty of money to be made in gold, but mostly from miners' shares.

dopester

tommy75 wrote: »

If we are in extraordinary times and this government seems hell bent on printing funny money forever, gold doesn't look so peaky after all and £695 ish still just the start?

I've made my decision in selling and moving to cash, but do remain uncomfortable with the extraordinary risks.

Time will tell. Perhaps not a lot of time either because the pressure-levels in the economic system are so forceful, so serious, so constantly upon us. Keep trying to inflate and suffer it's own miseries, or succumb to rebalancing deflation.