Buying gold

EdGasketTheSecond

bugbyte_2 said:

It will swing back again, at which point there will be opportunities to buy Gold, but you need a reason to hold it.

Maybe all the currency creation might be a reason to hold gold?

nick1234

DiggerUK said:

nick1234 said:

Big fan of gold, silver and other PMs.  I own 20% Gold/PM mining stocks (juniors and larger miners), 20% physical gold mostly Britannia's and Sovereigns which are CGT free and 10% physical silver bars.  Silver has tons of potential but Gold is a great store of wealth and one of the best performing assets in 50yrs, better than real estate. 

The rest is in junk overpriced asset classes such as equities, cash, and govt bonds!  and silver bars

There, that's got that corrected.
Silver is predominantly an industrial metal, yes it counts as a precious metal, but it is not a monetary metal or a store of value. I recommend you sell the silver as soon as it is right..._

Why does one only have to hold an asset class which is a store of value only, how about growth potential in the underlying price which is far greater than Gold?.  Historically Whenever Gold goes up, Silver follows to the ratio of x3/4 ! 

bugbyte_2

Hold, yes for the two reasons I gave a couple of posts ago giving 3-4% of portfolio but for me to buy more  - no. If I was being logical, I would sell Pharma (+23.6% yr) and buy Oil funds (-52%) as the capacity for BP et al to recover / adapt  / change is there but 'Oil is bad' with lots of Russia / Saudi infighting sentiment prevents me doing it. Probably regret it though!  

DiggerUK

nick1234 said:

DiggerUK said:

nick1234 said:

Big fan of gold, silver and other PMs.  I own 20% Gold/PM mining stocks (juniors and larger miners), 20% physical gold mostly Britannia's and Sovereigns which are CGT free and 10% physical silver bars.  Silver has tons of potential but Gold is a great store of wealth and one of the best performing assets in 50yrs, better than real estate. 

The rest is in junk overpriced asset classes such as equities, cash, and govt bonds!  and silver bars

There, that's got that corrected.
Silver is predominantly an industrial metal, yes it counts as a precious metal, but it is not a monetary metal or a store of value. I recommend you sell the silver as soon as it is right..._

Why does one only have to hold an asset class which is a store of value only, how about growth potential in the underlying price which is far greater than Gold?.  Historically Whenever Gold goes up, Silver follows to the ratio of x3/4 ! 

You have a very illusory, romantic and unreal understanding of silver.
"Growth potential" is sexed up talk from financial advisers and completely meaningless. 

As to silver following gold, please, study the charts. Gold leads, but silver gets lost somewhere between dreams and reality taking over..._

EdGasketTheSecond

DiggerUK said:

nick1234 said:

DiggerUK said:

nick1234 said:

Big fan of gold, silver and other PMs.  I own 20% Gold/PM mining stocks (juniors and larger miners), 20% physical gold mostly Britannia's and Sovereigns which are CGT free and 10% physical silver bars.  Silver has tons of potential but Gold is a great store of wealth and one of the best performing assets in 50yrs, better than real estate. 

The rest is in junk overpriced asset classes such as equities, cash, and govt bonds!  and silver bars

There, that's got that corrected.
Silver is predominantly an industrial metal, yes it counts as a precious metal, but it is not a monetary metal or a store of value. I recommend you sell the silver as soon as it is right..._

Why does one only have to hold an asset class which is a store of value only, how about growth potential in the underlying price which is far greater than Gold?.  Historically Whenever Gold goes up, Silver follows to the ratio of x3/4 ! 

As to silver following gold, please, study the charts. Gold leads, but silver gets lost somewhere between dreams and reality taking over..._

They look pretty correlated to me? :

https://www.macrotrends.net/2517/gold-prices-vs-silver-prices-historical-chart

except for the moment perhaps due to lack of industrial demand for silver but overall silver follows gold as the chart shows. Why do you say it doesn't?

Looks like gold is good value but silver is the bargain currently.

Jim1980

I think that in the next three years gold will go above $2000 and silver to go above $50 an oz. Precious metals will be the next big bull market. Silver always lags gold, the current gold/silver ratio is over 110. In the last recession the gold/silver ratio went down to 31. This makes silver a bargain indeed.

Username999

What happened to Goldman Sachs forecast of $10,000 for Gold?

bowlhead99

Jim1980 said:

Silver always lags gold, the current gold/silver ratio is over 110. In the last recession the gold/silver ratio went down to 31. This makes silver a bargain indeed.

It's only a bargain if you know when to get out. One of the gold and silver bullion dealers previously linked in this forum said he realised in the early 2000s that 'silver was even more undervalued than gold' so he started buying it and has been buying it ever since.

At the time he started buying up silver, the justification was that gold was 70-80x silver, so silver was too cheap... Now, 15+years later, as you say, gold is 110-120x silver, so he no longer sounds like a genius. So buying silver because it's 'cheap compared to gold' is not necessarily a money-spinner, because it might get even cheaper over the longer term. While it's a relatively 'precious' metal compared to some other metals, its price has more of a link to its industrial use than gold does, as Digger mentioned.

In between, there was a time when the ratio compressed and you could have got relatively more gold for your silver. The problem is, you don't know when that change in ratio is going to be. It might be that at the time an ounce of silver is worth relatively more ounces of gold than it is today, it's worth less actual cash than it is today, so paying today's price may not actually be 'a bargain indeed' in terms of the dollars you can sell it for. Or the number of dollars you get for selling it are a lot, but there's a lot of dollars to the pound at that time and you end up with fewer pounds.

Jim1980

I think you are right about price and ratio. Timing is key and not being greedy is extremely important. Looking forward there is likely in the short term that gold and silver may drop in price due to stronger dollar and another selling event in precious metals and equities.

DiggerUK

There are charts out there in inter webby land that give a ratio between a BigMac and just about anything you want to ratio it with. Ratios are about as much use as tarot card readings.

The markets decide what gold is worth, not a lump of silver or a BigMac..._