Investing in Gold

Voyager2002

Helloski wrote: »

Gold has more than doubled in value since 2001. Around 26% per annum. Not a bad return.

Gold is mainly quoted in US dollars per ounce. Currently around $675 per ounce, was $270 in 2001.

Gold has remained steady for the last 12 months.

My opinion is that gold is going to take off again soon. All other commodities have taken off in the last 12 months. Golds turn is not far away.

The best way to take advantage of any move in gold is to buy shares in a gold producer.

Investors generally see gold as a "safe haven" in troubled times. So they buy gold when the economy is generally troubled, when shares, commodities and even property are giving low or negative returns.

So if other commodities "have taken off in the last 12 months" golld is likely to prove disappointing.

Helloski

Voyager2002 wrote: »

Investors generally see gold as a "safe haven" in troubled times. So they buy gold when the economy is generally troubled, when shares, commodities and even property are giving low or negative returns.

So if other commodities "have taken off in the last 12 months" golld is likely to prove disappointing.

Gold does have a flight to quality element to it, but if it has more than doubled in the last 6 years then the economy must have been in some serious trouble...??

Gold is more closely linked to the US dollar, and as I see the US dollar to continue to depreciate gold will continue to rise in value. This coupled with ever increasing demand on all commodities, including gold, should see its price continue to rise. There are plenty of gold stocks out there that have given triple digit rates of return over the last 12 months.

Id certainly want some gold stocks in my portfolio.

Mojo71

I've been thinking about investing in gold lately, and would welcome a few bits of advice to some questions I have.

I have invested a small amount in the Merrill Lynch "Gold and General" fund (I also hold some other resource funds), but obviously this fund comprises of the shares of gold mining companies etc.

So I'd like something that isn't share based.

So I thought about ETFs, but I haven't invested in these before. If, for example, I chose an ETF that tracks the gold price, would this be just as good as buying physical gold (which isn't really something I wanted to do)?

And also, since the ETF is listed in US Dollars (even though it is available to purchase on the London Stock Exchange), how would this perform when pound/dollar exchange rates are taken into consideration? i.e. if the dollar keeps falling in value against the pound, would I'd still lose out unless the price of gold was rising to counteract the exchange rate differences?

Sorry for sounding thick, but I've only really invested in unit trusts or shares before, and those are UK based (even though their holdings within contain foreign stocks, the funds are still purchased in the UK).

Would also like to diversify into some other commodity based ETF index trackers, so any replies to the Gold questions would be relevant to that too.

Thanks in advance...

[Deleted User]

I think theres a few uk bullion merchants which will let you buy a share of there vault stock at todays prices i think they take percentages for storing it but this is prob fairly small in comparison to the market fluctuations. (dont ask me who, i know they exist and have came past there websites though)

Either that or become a gambling spreadbetter, CFDer or what ever else you can do with the commodities market. I think direct trading on the futures is out however, unless you are investing serious money or a mining corp.

dbk-bazee

Mojo71 wrote: »

I've been thinking about investing in gold lately, and would welcome a few bits of advice to some questions I have.

I have invested a small amount in the Merrill Lynch "Gold and General" fund (I also hold some other resource funds), but obviously this fund comprises of the shares of gold mining companies etc.

So I'd like something that isn't share based.

So I thought about ETFs, but I haven't invested in these before. If, for example, I chose an ETF that tracks the gold price, would this be just as good as buying physical gold (which isn't really something I wanted to do)?

And also, since the ETF is listed in US Dollars (even though it is available to purchase on the London Stock Exchange), how would this perform when pound/dollar exchange rates are taken into consideration? i.e. if the dollar keeps falling in value against the pound, would I'd still lose out unless the price of gold was rising to counteract the exchange rate differences?

Sorry for sounding thick, but I've only really invested in unit trusts or shares before, and those are UK based (even though their holdings within contain foreign stocks, the funds are still purchased in the UK).

Would also like to diversify into some other commodity based ETF index trackers, so any replies to the Gold questions would be relevant to that too.

Thanks in advance...

I was searching for dealers to purchase gold in "physical" form. Googled and spent lot of time finding one. There are some who sell in coins but I prefer bars. No credible one for bars. I would be thankful if somebody can post some resources.

cheerfulcat

Chard and Baird are two reputable dealers who deal in bars as well as coins.

Stavros_3

Yant1 wrote: »

sounds very much like a troll to me.

Ever watched Gold finger

Generali

Mojo71 wrote: »

I've been thinking about investing in gold lately, and would welcome a few bits of advice to some questions I have.

I have invested a small amount in the Merrill Lynch "Gold and General" fund (I also hold some other resource funds), but obviously this fund comprises of the shares of gold mining companies etc.

So I'd like something that isn't share based.

So I thought about ETFs, but I haven't invested in these before. If, for example, I chose an ETF that tracks the gold price, would this be just as good as buying physical gold (which isn't really something I wanted to do)?

And also, since the ETF is listed in US Dollars (even though it is available to purchase on the London Stock Exchange), how would this perform when pound/dollar exchange rates are taken into consideration? i.e. if the dollar keeps falling in value against the pound, would I'd still lose out unless the price of gold was rising to counteract the exchange rate differences?

Sorry for sounding thick, but I've only really invested in unit trusts or shares before, and those are UK based (even though their holdings within contain foreign stocks, the funds are still purchased in the UK).

Would also like to diversify into some other commodity based ETF index trackers, so any replies to the Gold questions would be relevant to that too.

Thanks in advance...

I'd get the IShares gold ETF. The ticker is IAU.

wombat42_2

Aegis wrote: »

I think I'm already partly invested in gold through a natural resources managed fund. I prefer that approach to investing directly in it or its producers.

I suspect you are talking about JP Morgan Natural Resources fund (JPMNR) or similar. Yes it is a plus that someone else does the hard work and works out what commodities to invest in at any one time. But the down side is that it invests in commodity producers (mining companies etc). The share price of commodity producers often just largely follows the share prices of the general market (for example they got zapped just as much as any other sector in the recent market turmoil). Also even if commodity prices keep rising for the next decade (largely because of China) the overheads of the commodity producers could also increase so their profits or share price may not increase.

Also the biggest rises in commodity prices at present are in soft commodities such as foodstuffs such as wheat and there is very little of JPMNR invested in
this area.

It makes sense to invest in commodities directly. There are commodity tracker ETF funds but there are so many of them.

The best solution would be if there were an actively managed unit trust that dealt directly in commodities rather than just buying shares in commodity producers but infortunately I dont think there is one.

I have put all my investment into China as the future success of commodities is entirely dependant on China so the two are inseparable.

Jonbvn

shokadelika wrote: »

If you want to own the physical and not take delivery have a look at www.bullionvault.com (I believe this is the cheapest) they will also give you a FREE GRAM of gold to help you learn to trade if you register

or

www.goldmoney.com

Just remember you have no FSA protection when you invest in either of the above.