Investing in Gold

bendix

C_Mababejive wrote: »

So are we saying that Gold isnt an investment. Its simply a hedge against inflation? But Gold prices have rocketed recently. You cant spend gold in the shops. you have to swap it for currency so it is inextricably linked to paper money. If gold price drops as quickly as it has risen,then surely you loose money?

Not strictly true. Gold prices priced in weak currencies like the US dollar and Sterling have increased, but that's more to do with the currency weakness, not the inherent demand for gold.

If you lived in Australia and had to buy gold in Aussie dollars, you would not say it had rocketed at all.

DiggerUK

C_Mababejive wrote: »

So are we saying that Gold isnt an investment. Its simply a hedge against inflation? But Gold prices have rocketed recently. You cant spend gold in the shops. you have to swap it for currency so it is inextricably linked to paper money. If gold price drops as quickly as it has risen,then surely you loose money?

Gold can be thought of as the ultimate short against all currencies.
Don't forget, there is a difference between monetary inflation and price inflation.
Gold prices have boomed because the currencies they are priced in are debased.
You can always get paper for gold, and do the shopping.
If gold price drops, you are right.

JamesU

DiggerUK wrote: »

Lloyds and HSBC just allow you to place a locked box with them. Insurance is your problem.
We viewed someone tunneling in to a bank as low risk, but will review insurance cover if we see a spate of bank robberies by tunnellers!!!

But it is a real issue if there was a substantial amount stored in a deposit box at a bank. Only you know what is in the box and have to prove it, boxes do get lost, given to the wrong people by mistake etc etc.......link below for one of many examples......

JamesU


http://www.thisismoney.co.uk/savings-and-banking/article.html?in_article_id=499685&in_page_id=7

DiggerUK

JamesU wrote: »

......boxes do get lost, given to the wrong people by mistake etc etc.......

Receipts. Negligence by the bank is recoverable. They do have a duty of care with the box after all.
I have never checked if it is limited though, will next time I am in branch. Thanks for making me worry!!

JamesU

DiggerUK wrote: »

Receipts. Negligence by the bank is recoverable. They do have a duty of care with the box after all.
I have never checked if it is limited though, will next time I am in branch. Thanks for making me worry!!

Not trying to make you worry, assumed you could enlighten given your situation. During a move I enquired about holding a deposit box at Lloyds (albeit for non-gold purposes) and for sure no problem, approx £50/yr. But when I asked about insurance to cover for loss, fire, flood etc they were clueless and could not give me an answer.

JamesU

DiggerUK

JamesU wrote: »

......But when I asked about insurance to cover for loss, fire, flood etc they were clueless and could not give me an answer.....

Insurance is your problem.
ps, in your link it was a Barclays bank box. We did not go with them, they provide the box, Lloyds and HSBC, you provide the box.

Nothing in paper work to say cover is limited. Just checked.
Normal phrases "We undertake...reasonable care....unless by negligence of our staff"
Losing a box seems negligent to me, but then again moral hazard is not what it used to be.
Not allowed to put anything "offensive" or "radioactive" in box either, so keep your !!!!!! and dirty bomb at home in the shed!!!!

sabretoothtigger

Petropavlosk (POG) and Centamin Egypt (CEY). However just seen a news item on Australian taxes

neither has assets in australia so you should be ok. The other thing is chinese slow down possibly which is causing fear is assets prices i think. I have heard barrick gold called the cheapest miner, they recently floated their African arm here

I've identified 3 ways to do this:

also there is investment and unit trust funds run by various companies. One etf would lcty which owns all commodity future contracts including gold and silver as well as oil and wheat, etc

cheerfulcat

Cardinal-Red wrote: »

And does anybody have any general ideas/comments on gold investment anyway?

Hello again, Cardinal-Red,

I would agree with bendix' comment that gold - physical gold, that is, not in shares or ETFs or unit trusts - is not an investment as such. More like insurance against everything going horribly wrong; so IMO it shouldn't form more than a very small part of the overall portfolio.

You might find Bill Bonner's site entertaining, especially the posts from the Mogambo, latest here.

shaun_from_Africa

This firm
http://www.wardrop.co.uk/index.php

Will insure bullion when stored in a bank vault for £1.25 per £1000.
The policy is underwritten by Lloyds insurance.

greenface

where is "the ash" this post is nearly(now) on page 2