Help to invest in gold?

user1168934

raffs wrote: »

... keyboard warriors!

This is going to be my favourite term for the week :rotfl:

simonineaston

I can't follow your reasoning, raffs. One look at the price of gold, via a search engine, just now, showed me it's been up & down like a fiddler's elbow. On the other hand, if you have a read of Martin Lewis' guide to savings accounts, you'll find a raft of nice safe bank accounts that'll pay you interest, albiet at modest rate. Surely a steady drip, drip of modest interest beats the fiddler's elbow by a country mile? What d'you think? And that's before you start to think about issues like security, storage, trader's fees & what-all!
Having said that, I know a bloke who's got a (surprisingly small) kilogramme bar and it is nice to hold!

Alexland

simonineaston wrote: »

Having said that, I know a bloke who's got a (surprisingly small) kilogramme bar and it is nice to hold!

On my last visit to the Bank Of England visitor center they had a £1m bar you can hold except it's now a lot worth a bit more. They also had a nice corner dedicated to Kenneth Grahame who was the bored ex-employee who created Wind In The Willows.

Alex

Brown_Bear

Alexland wrote: »

On my last visit to the Bank Of England visitor center they had a £1m bar you can hold
Alex

I doubt it's a real gold bar.
Why would they risk that?

The BoE have a history of misleading the public.
When the govt tried to borrow money to fund the war in 1914-18 - not many people wanted to lend.
So the BoE forged loans to the govt - to try to encourage the public to lend.

It's on their official website.

Brown_Bear

simonineaston wrote: »

I can't follow your reasoning, raffs. One look at the price of gold, via a search engine, just now, showed me it's been up & down like a fiddler's elbow. On the other hand, if you have a read of Martin Lewis' guide to savings accounts, you'll find a raft of nice safe bank accounts that'll pay you interest, albiet at modest rate. Surely a steady drip, drip of modest interest beats the fiddler's elbow by a country mile? What d'you think? And that's before you start to think about issues like security, storage, trader's fees & what-all!
Having said that, I know a bloke who's got a (surprisingly small) kilogramme bar and it is nice to hold!

When you 'deposit' money in a bank account - it's not really a deposit. You are lending the bank money. You are a creditor.

Of course if there's a problem - you've got govt FSCS compensation. So you can get your £60 a week or whatever they allow.
But how well is the FSCS actually funded?
What if the govt just decide to print more money to fund it if needed?
Sure - you'll get your banknotes back. But what will they be worth?

raffs

Brown_Bear wrote: »

When you 'deposit' money in a bank account - it's not really a deposit. You are lending the bank money. You are a creditor.

Of course if there's a problem - you've got govt FSCS compensation. So you can get your £60 a week or whatever they allow.
But how well is the FSCS actually funded?
What if the govt just decide to print more money to fund it if needed?
Sure - you'll get your banknotes back.But what will they be worth?

Nail, head, hit!

That is my problem. I do not trust the UK Govt. not to do something like that and my pot comes back worthless.

On that basis I thought Gold would be good - it has a finite amount, it is sought after for cosmetic purposes, its used in electronics and industrial purposes. It is not going to go out of use or fashion in the next decade.

True the price fluctuates as does the Pound, Dollar and Yen, but my rationale was no matter how much it fluctuates it still holds intrinsic value.

I thought if I put my money into Gold it would avoid any devaluation and I would have something to sell off at the end and hopefully make a small (huge would be better ) profit.

From looking at charts like this:


https://www.gold.co.uk/gold-price/gold-price-history/


it appears that Gold has much higher value now than it did 10, 20, 30 or 40 years ago. That consistent and constant rise made it look like a safe, low risk investment. Despite the opinion of some I did look into it. From the chart I have linked to, and yes I checked other sites, it seemed like I could buy Gold, have whatever company hold on to it and then after the madness of Brexit has passed I can cash it in and stick my money in the bank OR hold on to it until needed.

It all looked very simple and straight forward which made me question it hence this thread.

DiggerUK

raffs wrote: »

What is the most economical and safe way to invest in Gold?

Hi raffs, I am MSE's self appointed gold expert. As you can imagine there are a lot of criticisms about to head my way as well.
The most economical way to own physical gold is to buy UK legal tender; Sovereigns or Britannias. The reason being they are tax free going in, and tax free coming out. No VAT, no CGT, and no income tax.
The other way is to purchase via an ETF fund. That way you don't have security to worry about, (unless someone scarpers with the funds......only joshing)

We here at Digger Mansions have all our retirement cash in gold. But unlike you we had purchased our gold in advance of retirement. Our average purchase costs are under £650 per ounce. I would urge you to consider buying in over the next 12 months to get a good average price, the reason being it is back up in price again. You can hold your funds somewhere safe like Premium Bonds and draw down as needed.

Gold is at least a five year plan, I have found no problems or losses with ten years. So keep that warning in mind.

The main concern I have is that you seem to be doing the right thing, without really knowing a lot about what you are investing in. This article will give you some good guidance.
https://moneyweek.com/2342/a-beginners-guide-to-investing-in-gold/
I also have a couple of good dealers for you to check out. I have used both. Check p&p, t's & c's..._
https://atkinsonsbullion.com
https://www.elminvestments.co.uk/gold-coins.html

markj113

I 2nd sovereigns and britannias.


Some well priced and trusted dealers:
https://www.hattongardenmetals.com/buy/
https://atkinsonsbullion.com/
https://www.bairdmint.com/
https://www.chards.co.uk/


Also worth out checking the below UK based precious metals forum, a few well known and trusted sellers there too plus a good source for advice and answers to general questions:
https://thesilverforum.com/

Brown_Bear

raffs wrote: »

Nail, head, hit!

That is my problem. I do not trust the UK Govt. not to do something like that and my pot comes back worthless.

On that basis I thought Gold would be good - it has a finite amount, it is sought after for cosmetic purposes, its used in electronics and industrial purposes. It is not going to go out of use or fashion in the next decade.

True the price fluctuates as does the Pound, Dollar and Yen, but my rationale was no matter how much it fluctuates it still holds intrinsic value.

I thought if I put my money into Gold it would avoid any devaluation and I would have something to sell off at the end and hopefully make a small (huge would be better ) profit.

From looking at charts like this:

it appears that Gold has much higher value now than it did 10, 20, 30 or 40 years ago. That consistent and constant rise made it look like a safe, low risk investment. Despite the opinion of some I did look into it. From the chart I have linked to, and yes I checked other sites, it seemed like I could buy Gold, have whatever company hold on to it and then after the madness of Brexit has passed I can cash it in and stick my money in the bank OR hold on to it until needed.

It all looked very simple and straight forward which made me question it hence this thread.

The main decision you need to make is whether you are buying gold purely because you think it will increase in value against the GBP (investment decision) or whether you also lack faith in the banking / legal / govt system so much that you feel access to your money could also be at risk (asset protection).

In my opinion, if the govt was going to try and confiscate gold (in order to revalue the currency, or pay the armed forces* etc) - they'd just turn up at the large ETF vaults.

For investment only - stick with a gold (or silver) ETC.
For asset protection - go for physical gold (not silver).

*If GBP became worthless, the govt would need gold to pay the armed forces in order to retain their loyalty. Well documented throughout history.

short_butt_sweet

raffs wrote: »

That is my problem. I do not trust the UK Govt. not to do something like that and my pot comes back worthless.

the point should be: trust them to do what? on some things, i wouldn't trust them at all. but i'm very confident that they will make sure that the FSCS guarantees are honoured.

inflation is a risk, when holding cash deposits. usually, the interest on cash is somewhere near inflation; it certainly does tend to be higher when inflation is higher. so the risk is not quite so bad. however, in the worst case, there could be a period of some years during which inflation is a lot higher than interest rates.

you are correct than holding gold gives some protection against inflation; but so do shares. gold is also very volatile in price; and so are shares. however, shares tend to give higher returns than gold in the long run.

gold is only likely to match inflation on average - i.e. to do about the same as cash deposits - but with wild swings along the way. so generally cash is better than gold, because both gives low returns, but cash is much more stable in value.

shares are likely to give higher returns than both cash and gold in the long run, mainly because they both pay an income (dividends) and can rise in capital value. cash pays an income (interest), but the capital value stays the same. gold pays no income, but can rise in capital value. shares are generally better than gold, because both have very volatile capital value, but shares have higher returns.

On that basis I thought Gold would be good - it has a finite amount, it is sought after for cosmetic purposes, its used in electronics and industrial purposes. It is not going to go out of use or fashion in the next decade.

True the price fluctuates as does the Pound, Dollar and Yen, but my rationale was no matter how much it fluctuates it still holds intrinsic value.

that is roughly why gold is likely to match inflation in the long term.

I thought if I put my money into Gold it would avoid any devaluation and I would have something to sell off at the end and hopefully make a small (huge would be better ) profit.

From looking at charts like this:


https://www.gold.co.uk/gold-price/gold-price-history/


it appears that Gold has much higher value now than it did 10, 20, 30 or 40 years ago. That consistent and constant rise made it look like a safe, low risk investment. Despite the opinion of some I did look into it. From the chart I have linked to, and yes I checked other sites, it seemed like I could buy Gold, have whatever company hold on to it and then after the madness of Brexit has passed I can cash it in and stick my money in the bank OR hold on to it until needed.

It all looked very simple and straight forward which made me question it hence this thread.

look much more closely at that chart. note that gold has fallen for periods of 10 or even 20 years.

on 1 january 1980, it was £285; by 1 january 2000, it has fallen to £172, a fall of 40%.

but it's much worse than that. because of inflation, to buy the same as what £1 bought in 1980, you'd need £2.68 in 2000. that means the real value of gold had fallen by about 78% over those 20 years. in 2000, 1 ounce of gold had less than 1/4 of the spending power it had in 1980.

so yes, in the long term, gold will probably about match inflation. but how long are you prepared to wait? (and it could go down for longer than 20 years - there's no maximum.)

cash on deposit will also probably about match inflation, and with much less excitement/terror