investing in gold?

kidmugsy

brendon wrote: »

Except that stocks and shares do give you income in the form of dividends, which is what share price is predicated on. The price of gold is based on nothing but scarcity.

The three thousand year bubble.

paddyrg

Personally I think precious metals will bounce a little soon (although not to anything like the frenzy of 2012 massive hype and fashionable overvaluation). The current trendy hype equivalent is bitcoin, you'll hear variations of the same arguments as to why it can only go up... yet it's already proved it is so speculator driven and in complete bubble phase. People wanting an easy buck are investing/speculating heavily, I can't help feel there's an almighty correction coming.

planteria

with gold, though....how much of 'the bubble' was the price being pushed up by speculators in the West? are the Chinese and Indians and other nations not buying up real, physical gold still, reducing the amount available all the time?

grey_gym_sock

are you implying chinese and indians can't be speculators?

ChesterDog

They are not necessarily 'reducing the amount available' as that doesn't take into account the supply side and the economics of mining.

planteria

grey_gym_sock wrote: »

are you implying chinese and indians can't be speculators?

sorry, no. but from my understanding they are often buying to hold for the long-term, rather than as speculation. the jewellery industry is using a lot of gold.

ChesterDog wrote: »

They are not necessarily 'reducing the amount available' as that doesn't take into account the supply side and the economics of mining.

i agree...but they are using some of the available supply, consistently.

grey_gym_sock

a vague understanding of the intentions of other market participants is not something to rely on. even if it's right, they might change their minds!

cathybird

Would a physically backed ETF covering several precious metals including gold be a better bet? ... As a small part of a wider portfolio, of course?

I mention this because I had been thinking of this myself, though have only just started building the investments up and am not going to rush into it. It would be more diversified than just buying gold.

DiggerUK

cathybird wrote: »

Would a physically backed ETF covering several precious metals including gold be a better bet......

I view gold as being a different kettle of fish to other precious metals (pm). Less than 1/8th of yearly gold production goes into industrial applications.
The vast bulk of other pm's goes straight to manufacturing, only a small amount is put in coins, bars, jewellery, and a 'hole in the ground'
To me this shows that pm's other than gold, need a healthy economic environment to serve your portfolio well.
If you see the economy set to do well this won't be a concern if you go with pm ETF's, as opposed to a purely gold backed ETF.
..._

cathybird

Thanks, DiggerUK. All food for thought.