Cash in Gold Profit Now?

LondonZ17

Hi everyone,

Thanks to very useful advice from a previous thread, I have finally paid off my debts (a final £4K will be covered by jewellery sold at auction).

I had got myself into a bit of a mess with my antique jewellery selling hobby. I had very little in savings, £16k of debt and far too much in jewellery, which in theory was worth lots but takes ages to sell.

Now I have sold lots of it and have insured the rest. Last thing to deal with is scrap gold - things I bought for next to nothing and can now resell for £2.1K, which includes a £1.3K profit. At the moment, if the scrap stolen I would get next about £780 back from the insurers (that's all I have receipts for). I would love to keep it, as I like having gold on the side, just in case.

So my question is, should I sell the scrap and buy something that would be insured for its full value but as 'liquid' as scrapable gold? Maybe bullion coins? Or keep on paying £200/year for my safety deposit box for this and my other jewels - total including above scrap comes to £19K.

Thank you for any advice…

El_Torro

Why invest in gold at all? Assuming you already have enough cash (i.e. an emergency fund) why not invest more in your pension? Ideally in a global tracker or multi asset fund.

Since you already have a jewelry business it would make sense to diversify into something other than precious metals.

LondonZ17

@El_Torro, thanks. I pay 20% of my wages into a pension. I've stopped the jewellery business for good as it took a lot of my time, so what I have now is what I want to keep. I like having gold in case something drastic happens - kind of extreme scenarios like all internet stops working, war, etc.

kaMelo

https://forums.moneysavingexpert.com/discussion/comment/82094961#Comment_82094961

How will gold be of assistance when your internet stops working? I'm all for keeping something to hand 'just in case' but surely a wodge of cash is more helpful in all but the most extreme scenarios.

Woodstok2000

I would suggest the chances of a bank robbery are much higher than the chances of a catastrophic ongoing global Internet outage, so based on your risk tolerance you should get something thats going to be fully covered by insurance.

QrizB

If you sell the scrap gold, will you still need your £200/yr safe deposit box? It sounds like you will, as that's where you're keeping your other £17k of jewellery, so the marginal cost of holding it as scrap gold is near-zero.

I wouldn't personally choose gold as an investment but since you've cleared your debts, if it makes you comfortable having gold around, I don't see any good reason to stop.

If scrap gold is less liquid than bullion coins, and liquidity is something you'd like to improve, then selling the scrap and buying coins would make sense.

DRS1

Maybe you compromise and keep the scrap for which you have receipts but sell the rest.

@kaMelo Re the "surely a wodge of cash is more helpful" comment I imagine a gun toting American end of days prepper could explain why paper fiat currency will only be good for lighting a fire when the world has gone to hell in a handcart. For that contingency you really need metals (gold silver … and lead (the latter for your automatic rifle!)). Yes I know that probably counts as one of the more extreme scenarios.😁

Section62

https://forums.moneysavingexpert.com/discussion/comment/82094961#Comment_82094961

I like having gold in case something drastic happens - kind of extreme scenarios like all internet stops working, war, etc

Although gold is often promoted as something good to have in an emergency, you have to ask yourself how useful gold would really be in the kind of extreme scenarios you want to protect yourself against.

Especially as you say yourself -

…and far too much in jewellery, which in theory was worth lots but takes ages to sell.

There's no point having gold if you can't sell it when you need to. Finding a gold-buyer will be harder if the internet is down, and if there was a war which directly affected the UK then people are more likely to be chasing round trying to find food and fuel, rather than converting their wealth into gold.

LondonZ17

Thanks, @Section62.

I meant that the gold that I'm happy to sell for scrap is sellable immediately (I go to Hatton Garden Metals, and they pay me straight away). The main collection has a lot of collectable antique and vintage pieces but to sell them, I would have to consign them for an auction or else do some legwork taking them round to dealers.

Reading all the comments, I think I should sell the scrap and maybe buy a gold coin with the profit and keep the rest in savings. Then I could see my main collection as just enjoyment and not savings.

jimjames

Just a point, if your gold is stored in a bank vault then you might want to reconsider access to it in the event of global internet breakdown or some other civil disorder. If that happens then the chances are that you won't be getting inside a bank anytime soon.

michael1234

If you look at the last few hundred years, you'll see physical gold has its place.

Everything else is just words on a screen or bits of paper.

That said I own no significant physical gold (I'm not including my gold etf) because I think the financial system is more stable than it has been in the past. But nobody can predict the future and I can see the attraction of holding something of value that you can pick up in your hand.