investment in gold

buddy143

Hi,
I have got about 1000 pounds as savings which I am planning to invest on gold. Not sure how ?? Is there any online account like shares where I can buy bit of gold and can sell it as and when required.
the gold prices seem to be goiing high day by day.
what do people think??
any advice much appreciated.

Lokolo

Ask DiggerUK or Asheron

You can buy gold 3 ways, through buying the actual gold, or through ETFs. Or you can go for a commodities fund.

But, not meaning to sound rude, but you do not seem to have a clue about investing but are going for commodities, which are quite risky, no matter what DiggerUK says!

I am literally about to go home from work now so can't explain anymore atm, someone else might come along and give more info.

dunstonh

I have got about 1000 pounds as savings which I am planning to invest on gold.

Isnt that a bit risky?

he gold prices seem to be goiing high day by day.

Yes. That often happens with bubbles. Its when they burst that you need to worry. What goes up 70% in a short time can go down 70% in a short time.

kingmonkey

Why not set up a company asking people to send you their gold. Then you send a cheque back to them for 30% less than what it is worth in gold, and immediately sell the item at what is is worth in gold.

If the price of gold crashes then at least you'll have watches and attractive jewellery to admire.

cloud_dog

Lokolo wrote: »

You can buy gold 2 ways, through buying the actual gold, or through ETFs. Or you can go for a commodities fund.

Hmmm, isn't that three ways

Lokolo

cloud_dog wrote: »

Hmmm, isn't that three ways

Ha I added the extra one in edit

dunstonh

Why not set up a company asking people to send you their gold. Then you send a cheque back to them for 30% less than what it is worth in gold, and immediately sell the item at what is is worth in gold.

Dont forget the need to run stupid adverts on telly to encourage all the naive people watching to prance around the house to look for gold to put in the jiffy bag.

Aegis

buddy143 wrote: »

the gold prices seem to be goiing high day by day.
what do people think??

I think this is the worst possible reason to invest in something. It's all well and good if the fundamentals support that growth and more, but more often than not when something shoots skywards it's being buoyed up purely on sentiment. Gold doesn't generate an income, industry demand is actually down from this time last year and more and more is dug up and released into the market each year. There's no real reason for the price rise other than the fact that it's seen as a hedge against all the current market turbulence. As soon as confidence returns to the market and large institutions start selling their gold to get into other assets, the bubble will burst, and huge losses will end up being imposed upon people who bought towards the end of the upwards swing.

I believe that today Goldman Sachs increased their prediction of where the spot price of gold will be in about a year, and it's still more than $200 lower than where it currently stands.

Be very careful, you stand to lose a lot and could end up with an asset worth much less than you bought it for that produces no income and which turns over no business to justify large increases in real value.

fablad75

There's a website that you can go to called Bullionvault.com - it works the same way as Betfair. You can buy or sell gold by having people match your offer. Nothing physical actually changes hands, but Bullionvault does have gold in its vaults..

In March I put about almost £2.5k into it. Price went down for a long time, but it picked up again last week so I sold, and made over a hundred pounds. Not bad for 8 months.

Aegis

fablad75 wrote: »

There's a website that you can go to called Bullionvault.com - it works the same way as Betfair. You can buy or sell gold by having people match your offer. Nothing physical actually changes hands, but Bullionvault does have gold in its vaults..

In March I put about almost £2.5k into it. Price went down for a long time, but it picked up again last week so I sold, and made over a hundred pounds. Not bad for 8 months.

About 6 months ago you could have invested into a simple unit trust and could have made more with less ongoing risk. £100 on a £2.5k investment is only 4% growth, after all. An investment into the L&G UK 100 tracker would have resulted in 51% growth in the same time frame.

Sorry if that's really negative, but given how much pro-gold propaganda we get on the forum, it's useful to point out the cons of it from time to time.

cheerfulcat

buddy143 wrote: »

Hi,
I have got about 1000 pounds as savings which I am planning to invest on gold. Not sure how ?? Is there any online account like shares where I can buy bit of gold and can sell it as and when required.
the gold prices seem to be goiing high day by day.
what do people think??
any advice much appreciated.

Hi, there, buddy143,

Is this £1000 the sum total of your savings/investments? If so I would strongly advise against buying gold. The standard advice is to put around 5% and not more than 10% of your portfolio into gold.

If this is just punt money then fair enough. With that amount you'd probably be best off with an ETF.

Having said that, I agree with Aegis and dunstonh; your reasoning here is not sensible ( sorry, not meaning to be harsh ). " It's gone up so I should buy some " is not a good investment strategy!

There's a board on TMF for gold and precious metals investors which might be of interest.