Buying gold

Username999

EdGasketTheSecond said:

Username999 said:

Check out these 2 miners on the FTSE100: POLY.L and FRES.L
You should get a decent divi while you hold.

I prefer HOC to FRES, the balance sheet looks healthier. But I'd wait until mines re-open.

I like HOC.L but they cut their dividend before Covid-19 started.

EdGasketTheSecond

Are you sure about that? From HOC FY results published 19th February:

"Final proposed dividend up 19% at 2.335 cents per share ($12.0 million) bringing the full-year total dividend to $22.2 million (2018: $20.0 million)"

Maybe you are talking about some more historic cut. Anyway don't get hung up on dividends; they have to be affordable.

FRES FY results:

"Dividends of US$142.2 million paid, down 52.3% mainly due to lower profits for the period, in accordance with our dividend policy."

So I think you have got those two confused.

Prism

HOC cancelled yesterday
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HOC/14499992.html

Username999

Before Covid-19:
Dividend Cut - 12/2019 annual dividend cut from $0.0392 to $0.02.
https://www.dividenddata.co.uk/dividend-yield.py?epic=HOC


After Covid-19:

HOC

Hochschild Mining

FTSE 250

14-Apr-20

Cancelled

2.335 cents final dividend cancelled

https://www.dividenddata.co.uk/dividend-cuts.py?market=alldividends


You are right about FRES.L reducing their dividend, they've not yet cancelled it.

EdGasketTheSecond

ColdIron said:

Gold isn't cheap right now. How long would you hold it? How long could you afford to hold it? Do you feel lucky?

But your chart is in GBP and gold is priced in dollars. Its peak was $1,896.50 USD in 2011 and it is currently $1711 USD. When you look at the gold price in GBP you are including currency weakness of GBP caused by Brexit among other things. Considering we are now 9 years later and it is almost $200 below peak, and with all the currency debasement going on, I would not say gold was expensive. If you want something cheap then buy Silver which is a bargain at the moment.

If a similar rise in gold occurs now as in the 08 crash then we could see $9K per ounce gold which would be a decent gain from here while markets crash and currencies devalue.

EdGasketTheSecond

Prism said:

HOC cancelled yesterday
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HOC/14499992.html

Yes, I wouldn't buy miners while covid is going on.

bargainhunter888

i asked this q on another thread and it got too complicated. lol

McNinian

Gold has performed abysmally expressed in US dollars since the top in September 2011. In addition to the $200 drop in price, eight years worth of inflation must also be factored in which has been much worse than the official number of let's say 2% annualised rather than closer to 8-10%. It's something the perennial gold pumpers pretend not to notice because it makes their 'any day now' narrative considerably worse than it has been with 2% inflation. However, only physical gold will be left standing once fiat currencies are printed into oblivion and continued patience is required as we finally enter endgame territory. Non means-tested Universal Basic Income for all is a real likelihood in the months ahead as the wheels fall off this present system at an accelerating pace.

bowlhead99

EdGasketTheSecond said:

ColdIron said:

Gold isn't cheap right now. How long would you hold it? How long could you afford to hold it? Do you feel lucky?

But your chart is in GBP and gold is priced in dollars. Its peak was $1,896.50 USD in 2011 and it is currently $1711 USD. When you look at the gold price in GBP you are including currency weakness of GBP caused by Brexit among other things. Considering we are now 9 years later and it is almost $200 below peak, and with all the currency debasement going on, I would not say gold was expensive. If you want something cheap then buy Silver which is a bargain at the moment.

If a similar rise in gold occurs now as in the 08 crash then we could see $9K per ounce gold which would be a decent gain from here while markets crash and currencies devalue.

These sort of flip-flops of logic to whatever point of view best supports the potential of gold, are why it's not easy to have a conversation with a gold evangelist.
Over the last fifty months or so, gold went up over 60% in dollars (about $1050 in December 2015 to about $1700 in the Feb to April 2020 period) which is quite a big gain for a lump of metal sitting quietly in a vault, and is even more (in the 90 to 100% range) when measured in pounds.

According to you, all fiat currencies are doomed so it is just as useless to measure it in dollars as it is in pounds, because fiat currencies are just an arbitrary measurement tool based on nothing but thin air. However, if you are trying to say that gold is not in a bubble (i.e. it's not priced higher than its practical utility or higher than the present value of the zero future income that it guarantees), you will say that we should look at the price in dollars where it might appear more reasonably priced based on some previous peak, and it's likely to go up 5x in value over the next few years if it rises just like it did in the past.

However, we sometimes get a different story for other time periods. Over the previous 50 months or so leading up to that $1050 low point of Dec 2015, it had fallen by 45% in dollars (the ~$1900 you mention, down to the $1050).

If I ask a gold evangelist how we can believe that gold is a reliable store of value and protector against inflation when it can drop 45% in nominal value over a fifty month period (which is something I have asked before, back in the days when DiggerUK was the only major gold bug active on the forum), I will get the answer that I am reading the wrong chart, because US dollar isn't a good fundamental pricing tool because it's a fiat currency whose value to us changes based on exchange rates and the whims of the market - and what is relevant for us here in the UK is what a bar of gold is actually worth to us with our property, outgoings and future retirement spending likely to be in pounds.

And in pounds, the price 'only' fell from around £1180 to £695 four years later, which is only about a 40% fall (and a bit slower than the good stockmarket crashes of 2000 and 2008), and of course if you were buying all along from the early 2000s, you could have carried on buying through 2011 to 2013 not worrying that you'd had to pay over £1000/oz for a little while, and then keep buying as it falls and you will still have an average cost of under £700 or so, meaning you haven't lost any money after all, and gold is a great store of value with lots of potential for the future. At least that's what we were told when we questioned gold being a great store of value and the only thing that can protect us from inflation.

Pretty much whenever the huge volatility and peaks/troughs of gold pricing comes up in discussion, the gold bug tells us that we have cherry-picked a time period to suit our agenda and instead we should cherry-pick a different time period (and currency) to suit their agenda instead.  But one thing that can easily be said is that buying gold at relatively expensive times can easily produce a large loss in pounds if you can't afford to hold it forever - 40-50% losses being generated from '80 to '82, '83 to '92, '96 to '99, '11 to '15...

EdGasketTheSecond

But has it produced a loss during a market crash? Only initially and then soared. Obviously you don't stick in gold if it looks expensive compared to other asset classes. At the moment house prices, bond and stock prices look expensive relative to gold in the current environment hence I am going for gold and silver at the moment but not always or forever.