Does it make sense to buy gold as a COVID hedge?

Aretnap

AnotherJoe said:

what does your son know about stock market crashes that no one else does?

Ohh, I know this one! I know this one! 

Is it that he's read some blogs and watched some YouTube videos?

(To be fair, it could also be that he sits in on Cobra meetings and has inside knowledge of just how bad the second wave is likely to be, which is not available to the ranks of professional investors who are happy to buy and hold at current prices. But then he'd be in a position to recommend specific companies which will do very well out of a bad second wave, like home delivery companies, PPE manufacturers with government contracts, gravediggers etc rather than recommending that you buy lumps of metal. So I suspect it's the former.) 

thegentleway

Gold isn't investing: it doesn't pay interest or dividends. It can be a durable store of value and a hedge against inflation in a defensive portfolio but don't try to time the market. Over the long run, both stocks and bonds have outperformed the price increase in gold, on average. In short time spans, gold can come out of head as people rush to buy gold when the economy slumps and drive the price up but you've missed that window by a few months.

macman

Not only does it produce no interest or dividends, but you have to pay someone else to store it securely: keeping it under the bed is not really a good idea...

IdleComper

Kind thanks to all who replied I do not go online very often so I am sorry I ddin't reply sooner. Some funny answers as well thank you for the laugh. I will be sure to ask him about his vast fortune acquired from knowledge of the markets!! 

dont_use_vistaprint

Who buys gold to hedge ?  Countries, banks etc. They buy huge amounts to de-risk.
How much will you buy and how ?
If you buy virtual gold its just another form of trading like S&S.
There are some tax / VAT issues with physical gold, silver and diamonds as investments  in the Uk - maybe someone can explain as I dont fully understabd them

Each time I come back from Dubai I bring some tax free gold, diamonds and usually a 1/4 kilo of 99.999% swiss poured silver, they make lovely paper weights and mini investments to be enjoyed but are not my pension.

dont_use_vistaprint

bowlhead99 said:

EdGasketTheSecond said:

 Gold is near an all-time high but only when measured in debased fiat currency; by any other measure it is cheap and the best asset class to own now.

Yes, gold only looks expensive when you measure it in the things you use to buy goods, services and investments (i.e. money) or other investments, and not by 'any other measures' (i.e. youtube conspiracy videos produced by bullion merchants). 

Having said that, as gold has doubled in pounds terms in the last five years while the cost of production and web hosting for a 'Don't remember Weimar Republic hyperinflation ? Wake up Sheeple!' social media video has fallen in the same timescale, an ounce of gold is now equivalent to a lot more online content from people with vested interests, to which both OP's son and EdGasketTheSecond have been exposed.

Exactly! Economics and currencies have survived wars, famines and crashes. If you are hoarding gold to buy food in a post-apocalypic "mad max" scanario, then you might be better hoarding diesel or water.

bowlhead99

dont_use_vistaprint said:
If you are hoarding gold to buy food in a post-apocalypic "mad max" scanario, then you might be better hoarding diesel or water.

The millennials told me diesel was a dead industry and that VW cheated the emissions testing, so to avoid getting caught up in a post apocalyptic morality battle I instead hoard sun and wind for my dystopian power needs.

coachman12

dont_use_vistaprint said:

Who buys gold to hedge ?  Countries, banks etc. They buy huge amounts to de-risk.
How much will you buy and how ?
If you buy virtual gold its just another form of trading like S&S.
There are some tax / VAT issues with physical gold, silver and diamonds as investments  in the Uk - maybe someone can explain as I dont fully understabd (sic) them

Each time I come back from Dubai I bring some tax free gold, diamonds and usually a 1/4 kilo of 99.999% swiss poured silver, they make lovely paper weights and mini investments to be enjoyed but are not my pension.

I can see why you don't understand, so why opine with such force ? 
Each time I come back from Zurich, I leave behind a number of gold bars ( including my best 400 ounce pristine bar ) as well as coins such as KrugerRands and other articles of value. What did you say about a pension ?? BTW, gold is legal tender in Switzerland ( you'll have to google to try and understand the whole story of gold and the nuances that you have no idea about at present ).
And forgive me if I don't take up your suggestion, in another one of your posts, that I should hold reserves of water and diesel----------I'll stick to gold.
But thank you for all your interesting & knowledgeable comments which show MSE at its very best.

EdGasketTheSecond

bowlhead99 said:

EdGasketTheSecond said:

 Gold is near an all-time high but only when measured in debased fiat currency; by any other measure it is cheap and the best asset class to own now.

Yes, gold only looks expensive when you measure it in the things you use to buy goods, services and investments (i.e. money) or other investments, and not by 'any other measures' (i.e. youtube conspiracy videos produced by bullion merchants). 

You don't know what real money is; try again.

Jonbvn

coachman12 said:

dont_use_vistaprint said:

Who buys gold to hedge ?  Countries, banks etc. They buy huge amounts to de-risk.
How much will you buy and how ?
If you buy virtual gold its just another form of trading like S&S.
There are some tax / VAT issues with physical gold, silver and diamonds as investments  in the Uk - maybe someone can explain as I dont fully understabd (sic) them

Each time I come back from Dubai I bring some tax free gold, diamonds and usually a 1/4 kilo of 99.999% swiss poured silver, they make lovely paper weights and mini investments to be enjoyed but are not my pension.

I can see why you don't understand, so why opine with such force ? 
Each time I come back from Zurich, I leave behind a number of gold bars ( including my best 400 ounce pristine bar ) as well as coins such as KrugerRands and other articles of value. What did you say about a pension ?? BTW, gold is legal tender in Switzerland ( you'll have to google to try and understand the whole story of gold and the nuances that you have no idea about at present ).
And forgive me if I don't take up your suggestion, in another one of your posts, that I should hold reserves of water and diesel----------I'll stick to gold.
But thank you for all your interesting & knowledgeable comments which show MSE at its very best.

One hopes you are in quarantine after each journey.