Do you own physical gold as an investment?

HansOndabush

Michael121 said:

Why do you need to hold physical gold if you want to own it.

If things go pear-shaped and you need to barter for food or bribe someone to get you somewhere else. There's also the distrust of the financial system and whether in a crisis you'd actually get paid for your gold.

aaj123

HansOndabush said:

 the 'puff of nothing' called bitcoin 

While I agree this was digressing from the topic of this thread, is that really what you believe Bitcoin is? I am glad because that means it has far higher to go.

Type_45

HansOndabush said:

Type_45 said:

pbartlett said:

Some of the point about having gold is that you hold it at home where you can get at it. 

Exactly. And that's the whole point. Without that, there's no point and you might as well invest in any number of assets which are just numbers on a screen and which can be snatched away from you at any moment.

Real estate and physical gold are different from other assets in that sense.

That's not quite true. You can hold gold in an ETF as a hedge against inflation. Unlike stocks, the gold value will not go to zero anytime though admittedly there is some counter-party risk to ETFs.

Ref. "The concerns with Bullion Vault would be, 1) if a crisis happens, would I be able to get my gold to use in whatever way I wish? They may be closed etc.  And 2) they seem to charge high fees for the release of gold."

1) If you are talking about a war type of situation then possibly not but in the normal run of things you should be able to liquidate your gold and cash out the proceeds.

2) You have to compare that with the premium you pay for physical that you take delivery of.

Yes, I'm talking a serious situation. Not necessarily a war, but stocks and currencies crashing with banks closing and people are unable to access money (and even if they could, it's not worth what it was). That's the type of situation which holding gold and silver would come into it's own. Gold for storing wealth, and silver for daily trading.


There needn't be a cost for storing your own gold. As long as no one knows where it is and you stash it properly somewhere, it's free to store at your own property. (This is why I wouldn't mail order gold/silver because you automatically put a target on your house as others can hack that info).

Michael121

Seriously? In such a situation you wouldn't even trade a slice of bread for gold. 

Type_45

Michael121 said:

Seriously? In such a situation you wouldn't even trade a slice of bread for gold. 

Gold is for storing wealth until things are back to normal.
Silver (or other metal/commodity) is for daily use.

I'm not necessarily talking about a Mad Max style hellscape. I'm talking about a major financial crash in which multiple banks, and the stock market, collapse.

I'm not talking starvation on the streets. Just people's wealth disappearing.

underground99

Type_45 said:

Michael121 said:

Seriously? In such a situation you wouldn't even trade a slice of bread for gold. 

Gold is for storing wealth until things are back to normal.
Silver (or other metal/commodity) is for daily use.
I'm not necessarily talking about a Mad Max style hellscape. I'm talking about a major financial crash in which multiple banks, and the stock market, collapse.
I'm not talking starvation on the streets. Just people's wealth disappearing.

If you are looking to diversify your portfolio of residential property, stock market investments and bitcoin, gold is something whose value will move by a different magnitude and in a different direction to some of those things at various times, depending on economic conditions. It may have an element of inflation proofing if over long time periods it is still in demand, even if it stopped being in demand for much of the period. So a small amount in your portfolio as a diversifier is probably not a crazy idea. People have certainly done that and lived to tell the tale.

But you mention storing wealth 'until things are back to normal'....

It may generally be expected to go up in value in times of fear and uncertainty. But if it does have those attributes, seems clear that if you continue to hold it and wait 'until things are back to normal' it will drop to a much lower value than it had when things were dicey. 

If there isn't actually going to be mad max blood and starvation on the streets, it would seem that it could be useful to sell it a very long way ahead of things going back to normal, while its value is temporarily inflated. That's how you benefit from a diversified portfolio with things moving in different directions. If you are just going to hold it until things go back to normal and its price has plummeted accordingly, you won't really have taken any advantage of its lack of correlation to stocks, bonds, properties. You might as well have not bothered with it, and just held more of the stocks and bonds and properties, watched them lose money in the uncertainty / stock market collapse, and watch them come back again afterwards.

edgex

Type_45 said:

If the GBP is suddenly worthless (or at least worth a lot less) presumably gold would come into its own.

Would gold ETFs benefit in the same way? Or is it wiser to have sovereigns?

Why would it? What are you going to do with it, that you wouldn't still be able to do with GBP? Why would anyone trust that it is what you claim it to be?

pbartlett said:

when civilisation collapses and i am wandering the ruins, my krugerrand might buy me a nice can of soup. your etf note, on the other hand, will mean you will be reduced to eating caterpillars.....

Barter economy. The person with a warehouse full of cans of soup will want fuel for the generator, or other food to live on. They can't do anything with your gold.

Drp8713

I have around £1k in gold and silver coins, and over 100 times that in S&S ISA / LISA / SIPP / AVC so I of course think global equities are the better bet over the long term.
However, all the people saying gold and silver would be useless in a crisis should take a look at the situation in Venezuela or Lebanon. If you wanted to escape those countries, gold would have given you a good chance of getting out, where access to cash was lost or eroded by inflation.
I am not saying that is likely in the UK, but you could look on a few ounces of gold and silver as an insurance policy.

Scrudgy

Type_45 said

Thank you! 
Does anyone have any thoughts on buying gold bars rather than gold coins? 

I hope you live somewhere close to a bullion dealer, physical gold is a pain to sell otherwise.
My dad left about £10k in two gold bars in his estate. I had to sell it so that the estate could be distributed around. I live in NE Scotland and there were no gold dealers in town who would touch even the fairly modest quantity we had. Jewellers offered £1000 less than the bullion by post buy value, pawnbrokers were even worse. They just didn’t want to get involved unless it was just some scrap gold jewellery or a few coins, bullion is a completely different beast.

I was advised not to post it, and there is no postal insurance that would cover this, specialist insurance was going to be a few hundred pounds. I thought I found a place in Glasgow 130 miles away, but they wanted 3 days to verify the gold was pure and my ID was correct.

In the end, I jumped in the car and drove to Birmingham to bullion by post HQ I and sold the gold in a face to face transaction. The costs were the fuel, a hotel for the night and some food, about £200 all in. 

I was quite amused though, after using a special machine to verify purity, and then accurately weighing the gold, we agreed the price. The guy then in cut both  the bars in half with a huge bolt cutter, I was amazed, two perfect little gold bars without a mark on them were sliced up in front of me. He explained that they never resell bullion bars and they would be going straight to the smelters to be made into new little gold bars.

In summary don’t buy bullion unless you have a good option for selling it when the time comes to get rid. A gold etf sounds like a far better way to hold gold.

Type_45

Scrudgy said:

Type_45 said

Thank you! 
Does anyone have any thoughts on buying gold bars rather than gold coins? 

I hope you live somewhere close to a bullion dealer, physical gold is a pain to sell otherwise.
My dad left about £10k in two gold bars in his estate. I had to sell it so that the estate could be distributed around. I live in NE Scotland and there were no gold dealers in town who would touch even the fairly modest quantity we had. Jewellers offered £1000 less than the bullion by post buy value, pawnbrokers were even worse. They just didn’t want to get involved unless it was just some scrap gold jewellery or a few coins, bullion is a completely different beast.

I was advised not to post it, and there is no postal insurance that would cover this, specialist insurance was going to be a few hundred pounds. I thought I found a place in Glasgow 130 miles away, but they wanted 3 days to verify the gold was pure and my ID was correct.

In the end, I jumped in the car and drove to Birmingham to bullion by post HQ I and sold the gold in a face to face transaction. The costs were the fuel, a hotel for the night and some food, about £200 all in. 

I was quite amused though, after using a special machine to verify purity, and then accurately weighing the gold, we agreed the price. The guy then in cut both  the bars in half with a huge bolt cutter, I was amazed, two perfect little gold bars without a mark on them were sliced up in front of me. He explained that they never resell bullion bars and they would be going straight to the smelters to be made into new little gold bars.

In summary don’t buy bullion unless you have a good option for selling it when the time comes to get rid. A gold etf sounds like a far better way to hold gold.

That was a very interesting story and lots of good tips. Thank you for that 👍