# The Gold thread



## walk2dewater

I'd like to start a discussion on gold:

(a) It's once again, after a long hiatus, entering mainstream conciousness as an investment
(b) It's very accessible and tangible for the average punter who can buy it 'over the counter' (e.g. www.gold.ie) or buy a precious metal unit trust through say, www.internaxx.lu

OK to start then. This is a nice short and sweet (5mins) item on gold that encapsulates a lot

Go here: [broken link removed]

Scroll down click on the 5pm show

View the interview between 34:20 and 40:00 minutes

I love the quote, "it doesnt cost anything to print another dollar bill"

************************************************

Should you buy gold?


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## Duplex

Hey WTTW wait till I sort myself out before starting a bull run on gold.  

I think that a gold allocation is a good defensive move at the moment, as the creditability of the Fed’s tightening policies is brought into question with the demise of M3 money supply data.  Its also interesting to note that the M3 money supply data coming from the ECB suggests that M3 is growing by 8-9% well above what the ECB is comfortable with.

One important caveat, Gold or other precious metals investment is speculative; however it has proven to be a good hedge against inflation in the past.  I still anticipate a credit crunch (to follow the present global debt bubble), caused by rising defaults and a widespread (global) property market reversal.  

PS
I heard something today about my local property market that has sent chills down my spine, I am witnessing debt driven easy money mania here, big-time.


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## ninsaga

Duplex said:
			
		

> PS
> I heard something today about my local property market that has sent chills down my spine, I am witnessing debt driven easy money mania here, big-time.



..care to elaborate or post in  forum where it may be more appropriate?


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## delgirl

My father-in-law has a stash of gold bars under his bed.  

Not only does he get peace of mind in that he has his fortune in diverse mediums such as property, shares and gold, but he claims it also helps his rheumatism!


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## paddlepuss

Isn't it more preferable to invest in gold bullion through a quoted ETF which is backed by bullion held in a bank custodion eg Lyxor where amc is 0.4%pa and you don't have to worry about security, storeage and insurance. Because its a highly liquid market you can sell instantly.???


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## ivuernis

Duplex said:
			
		

> PS
> I heard something today about my local property market that has sent chills down my spine, I am witnessing debt driven easy money mania here, big-time.


 
Come on, don't pique our interest like that and not tell us


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## CCOVICH

ivuernis said:
			
		

> Come on, don't pique our interest like that and not tell us



As someone else pointed out, by all means tell everyone, but keep it for another thread eh?


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## ClubMan

walk2dewater said:
			
		

> IShould you buy gold?


As one part of an overall diversified portfolio, perhaps. Alternatively, why not buy shares companies involved in the gold industry (industries?) as an indirect punt?


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## walk2dewater

Paddle:
“Isn't it more preferable to invest in gold bullion through a quoted ETF which is backed by bullion held in a bank custodion eg Lyxor where amc is 0.4%pa and you don't have to worry about security, storeage and insurance. Because its a highly liquid market you can sell instantly.???Paddlepuss, these two trade in US”

Clubman:
“As one part of an overall diversified portfolio, perhaps. Alternatively, why not buy shares companies involved in the gold industry (industries?) as an indirect punt?”

Yes and yes.  GLD is popular bullion ETF and trades in NYSE and tracks the price of US$ gold.

http://finance.yahoo.com/q?s=GLD
http://www.streettracksgoldshares.com/index.php?noMsg=true

I’m not aware of ETFs available thru Irish or European brokers, maybe someone else can enlighten.

Buying individual precious metal mining companies is an extreme risky proposition, better to pick a unit trust (or mutual fund as they’re called in US/Canada).  E.g. SGAM Fund Eq Gold Mines is available through www.internaxx.lu and up +100% in last 3yrs.

Owning the shares of precious metal companies exposes you to silver and other semi-precious and sometimes base metals as well and is considered a leveraged bet;  as cost of extracting gold increases and demand increases the value of these companies rises faster than gold, similarly vice versa.


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## paddlepuss

Not US quoted, traded on LSE


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## ionapaul

If I bought GLD via my broker, would I be taking on an FX risk (a security held in $)?


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## walk2dewater

paddlepuss said:
			
		

> Not US quoted, traded on LSE


 
Whether you go the ETF route, the bullion route (www.gold.ie) or the unit trust route there's two important considerations for those just DABBLING with this asset class:

(1) Look at gold as an "insurance policy" for your wealth or alternatively a bit of diversification. In that case only say 2.5% to 7.5% of your net worth should be in this asset, and 'average in' slowly, at minimum 1/3 now, 1/3 later, 1/3 later again.

(2) Your position should be liquid. Should be able to sell or buy all or some of your position within a couple of business days

**********************************************
Apart from the mechanics of how to buy, does anyone have any insights into WHY they would buy today?

I'm bullish on gold for two main reasons:

(1) I think we're coming to the end of a massive hyperinflationary period, besides DVD players from China and unprocessed foods, the price of everything else has and is sky-rocketing. CPI figures saying inflation is running 2-3% just do not look right to me. The world is awash with paper money looking for a home.

The recent rises in gold has confirmed this. Investors are turning to gold as a store of value.

(2) I think we're about to enter a deflationary period for assets (stocks, property, US bonds). Much higher interest rates than currently expected are going to turn the screws on debtors and cause consumption to fall. Leading to recession, further lowering of consumption and loss of the "feel good" factor. Employment will fall, further lowering income and hence consumption. Prices of assets will fall as buyers dry up and vendors flood the market. The mood may turn to panic, resulting is even less spending, more layoffs, lower prices.

In this scenario, gold becomes the ultimate safe haven

OK this is the worst case scenario, apocalyptic even, but even under a mild version of the above, gold should do exceptionally well against paper currencies. There appears to be little downside risk to gold and a whole lot of upside potential. Hence I'm averaging into a 30% position in gold by approx end of summer timeframe.

Comments?


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## walk2dewater

ionapaul said:
			
		

> If I bought GLD via my broker, would I be taking on an FX risk (a security held in $)?


 
GLD is a currency 
You want your gold to buy more paper currency, euros, yens, dollars, pounds, honduran lempiras, whatever, in the future


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## Dearg Doom

Should the speculation of the future values of individual commodities be allowed on AAM? Should  be extended to include commoditites?


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## ivuernis

walk2dewater said:
			
		

> (1) I think we're coming to the end of a massive hyperinflationary period, besides DVD players from China and unprocessed foods, the price of everything else has and is sky-rocketing. CPI figures saying inflation is running 2-3% just do not look right to me. The world is awash with paper money looking for a home.


 
Are we really in a period of hyperinflation? I was under the impression that hyperinflation is inflation out of control and current inflation of 2-3% is only moderate? Of course certain things like property are running at much higher rates. 




			
				walk2dewater said:
			
		

> (2) I think we're about to enter a deflationary period for assets (stocks, property, US bonds). Much higher interest rates than currently expected are going to turn the screws on debtors and consumption to fall. This is going to cause a recession, further lowering consumption. Employment will fall future lowering income and hence consumption. Prices of assets will fall as buyers dry up and vendors flood the market. The mood may turn to panic, resulting is even less spending, more layoffs, lower prices.


 
If we entered a period of deflation wouldn't the actual purchasing power of cash become greater as the value of assets decrease, thus negating the need to hold gold as a store of value? 

I think I'm slightly confused now


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## Howitzer

ivuernis said:
			
		

> If we entered a period of deflation wouldn't the actual purchasing power of cash become greater as the value of assets decrease, thus negating the need to hold gold as a store of value?
> 
> I think I'm slightly confused now


 
I guess if the value of assets decrease so too do the value of the companies selling them, therefore if you're looking for something to invest in then you should transfer your money from these companies to something more solid, ie gold.


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## walk2dewater

ivuernis said:
			
		

> Are we really in a period of hyperinflation? I was under the impression that hyperinflation is inflation out of control and current inflation of 2-3% is only moderate? Of course certain things like property are running at much higher rates


 
The price of fuel, houses, cars, utilities, public transport you name it are SKY-ROCKETING... look at the CSOs wholesale price indices, everything is double-digit %s growth... OK DVDs players at Dixons are getting cheaper, so are shoes and most unprocessed foods, but most of my income doesnt go on these things... do you really believe the 2-3% story?

Yes during deflation cash would become "king", but I think gold might be more even valuable during the initial stages. The shock of a sudden change in sentiment/psychology could cause a run on gold... an event which I think may have started.
*********************************
Should you buy gold now or wait for a near-term price correction, to say €485/oz??????


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## ivuernis

walk2dewater said:
			
		

> The price of fuel, houses, cars, utilities, public transport you name it are SKY-ROCKETING... look at the CSOs wholesale price indices, everything is double-digit %s growth


 
Yes, these are all rising at unsustainable rates. I suppose my understanding of hyperinflation is a situation where things actually becomes unaffordable whereas what we have now is high inflation where people can still afford (admittedly mainly thanks to cheap credit) to buy stuff. 

I'm not trying to debate the difference between where high inflation ends and hyperinflation starts though. I'm quite happy to agree that OVERALL inflation is way too high and to call it whatever feels appropriate. 




			
				walk2dewater said:
			
		

> do you really believe the 2-3% story?


 
No, not at all! 




			
				walk2dewater said:
			
		

> Should you buy gold now or wait for a near-term price correction, to say €485/oz??????


 
This is what I'm unsure of though. You hear commentary that gold has hit a high and will probably fall back again while others say it's just the start of a long bull run. I suppose gold had dropped in value for a long time and maybe what we are seeing now is a realisation of this with the current value being more realistic. I'm just shooting from the hip here though but I still think I'll put upto 5% into gold once I'm liquid in a few months time.


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## walk2dewater

ivuernis said:
			
		

> You hear commentary that gold has hit a high and will probably fall back again while others say it's just the start of a long bull run. I suppose gold had dropped in value for a long time and maybe what we are seeing now is a realisation of this with the current value being more realistic. I'm just shooting from the hip here though but I still think I'll put upto 5% into gold once I'm liquid in a few months time.


 
Which is why I’d advocate ‘averaging into’ a position. I like investing in mutual funds cos my broker allows me to add small, automatic amounts weekly to my position for same price as a lump-sum trade. I end up getting an average price over the course of time rather than an “all or nothing” approach. At an absolute minimum you should invest your targeted % in three tranches 1/3 now, 1/3 later and 1/3 much later.

I wouldn’t rule out a fall in gold relative to all paper currencies in the near-term, say US$485/oz, but that’s ok cos my average price is much lower, and my weekly purchases means I’ll pick up more at the lower price.


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## walk2dewater

http://www.forbes.com/2006/03/23/gold-trusts-mining-cx_jr_0324sf.html?partner=yahootix

"Global shares will do poorly in a higher-inflation world, and inflation is picking up worldwide as the higher price of oil feeds through"

Got Gold?


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## ivuernis

walk2dewater said:
			
		

> Which is why I’d advocate ‘averaging into’ a position. I like investing in mutual funds cos my broker allows me to add small, automatic amounts weekly to my position for same price as a lump-sum trade. I end up getting an average price over the course of time rather than an “all or nothing” approach. At an absolute minimum you should invest your targeted % in three tranches 1/3 now, 1/3 later and 1/3 much later.


 
Thanks for the advice, investing in gold by averaging in as you suggest seems like the sensible way to go about it. 

I just came across this quote which I like...

*You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold." George Bernard Shaw *


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## ivuernis

Though gold is at a 26-year high at the moment (heading for $600 an ounce) I read that in terms of today's dollar value gold reached $2,176 per ounce in 1980 which would seem to indicate that gold is still undervalued in real terms today. 

Anybody (walk2dewater?) have any opinions?


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## walk2dewater

Gold is in a bull market, but bull markets are not straight lines sloping upwards from left to right.  My gut says the party needs a breather for some profit taking.

So gold bulls should either (a) average in with regular automatic amounts - weekly if possible - and ride thru with an average price, or (b) wait for a correction before lump-summing in.

Problem with (b) is there's no technical resistance point I can detect.  Any technicians here who want to elucidate and illuminate us?

******************************************************

"We're seeing price swings that we haven't seen in decades. We used to see a $6 range in gold over a week, and now we see it in a single day," said Quinn. "The gold market is really going to be in play over the course of the year."
For investors, that means that they should be prepared for the possibility of major short-term losses.
"Not everybody could handle losing 40 percent in one year," said Wallace. "Most people probably don't need an investment in precious metal funds."

http://money.cnn.com/2006/04/06/pf/gold_investing/index.htm?source=yahoo_quote


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## Meccano

walk2 - that CNN link is the first negative item I've seen you post about gold. You're obviously sold on it.

I'm no expert, but going on the kind of doomsday scenarios you've painted, where stock markets and whole economies crash - how would you feel secure your 'paper' gold shares are any safer than any other stock? You don't have the physical commodity in your sweaty hands - which is surely the whole point in the scenario you describe!

Holding the metal is difficult, risky, and potentially expensive.

Also, those heady days of $2,000 per ounce gold prices (1980's) were in a period when countries held huge national reserves of gold in their treasuries.
Many countries - e.g. the UK - sold off large proportions of their gold reserves in the late 90's and said they didn't need physical reserves to back stong currencies any longer. That devalued the gold market at the time of the sell-off. Will it ever be as scarce or as valuable again while the treasuries aren't buying?

Lots of questions - its a bit of a minefield and I think the hard sell on here is a bit obvious.


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## Guest109

i have a gold 50 peso coin mounted as a pendant, and id be afraid to wear it now its solid gold  oro puro marked


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## walk2dewater

Meccano said:
			
		

> doomsday scenarios you've painted, where stock markets and whole economies crash


 

Im suggesting recession not the end of the world



			
				Meccano said:
			
		

> Also, those heady days of $2,000 per ounce gold prices (1980's)


 
In todays money gold was about US$1700oz, all time high, I believe 1980?
good chart on pg1 of this [broken link removed]

Anyway, gold has to take a breather sooner or later. Im not adding to my positions at these prices, but not selling either.


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## joe sod

Yea I read Jim rogers book on  commodities investing. He is not a big fan of gold. While he thinks that it will continue to rise in the next few years he thinks that it will not go to the heights of other commodities. The reason he is not a fan of it is because of the huge stores of gold around the world and that so little of it is actually used by industry. I read that 50% of the total gold ever mined in the world has been mined since 1950. That means that there is twice as much gold around today than 50 years ago. I think silver is a much better bet.


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## walk2dewater

JoeSod,
IMHO the move to gold has merely started.  Supply remains extremely scarce relative to  potential demand.  The cost of mining just about anything these days is sky-rocketing-- IMF says there's 20%-40% cost inflation in mining/extraction industry last year.  After years of run down, production of gold amounts to a 2.5% annual increase in stock.  Do you think there'll be enough gold to go around when the Irish Times discontinues its Property Section and replaces it with the Commodities Section


I am worried about preserving what I have.  Therefore I am converting between 20-30% of my net worth into gold backed securities, (prec metal mutual funds, ETFs and yes even a little of the actual hard stuff). Currently at about 20%, from virtually 0% 2yrs ago. I've slowed down the process somewhat in recent weeks cos my gut says gold has run up a bit too fast lately. Nothing technical, just my gut feel.


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## walk2dewater

http://www.rte.ie/business/2006/0509/gold.html

"Investors have ploughed their cash into gold and platinum because both precious metals are seen as a safe store of value in times of geo-political uncertainty, such as the current Iranian nuclear energy crisis"

wrong, iran is a small part of the picture.  people are buying gold because the Fed won't raise rates high enough and quickly enough to reign in US dollar creation.

If there's a true run on the US dollar, these recent moves in gold will look like baby steps...


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## soma

I still cant make up my mind about whether there's a speculative bubble (albeit probably a small one..) in Gold at the moment..

..or is the damn Global property market is making me see bubbles everywhere *lol*


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## Duplex

Weak dollar = strong gold. The Chinese are supposedly quadrupling their gold reserves, which means fewer T bills being sold which puts more pressure on dollar rates, which squeezes debt holders the US housing market and US consumers.   Short term we'll have stagflation followed by deflation in the medium term.


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## walk2dewater

Duplex said:
			
		

> Short term we'll have stagflation followed by deflation in the medium term.


 
that's my bet also.  Gold will be further supported, and may rally a bit, if Trichet *only* raises rates by 0.25% in June.


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## joe sod

http://money.cnn.com/2006/05/05/news/newsmakers/buffett_050606/?cnn=yes

*Buffett:* "I don't think there's a bubble in agricultural commodities like wheat, corn and soybeans. But in metals and oil there's been a terrific [price] move. It's like most trends: At the beginning, it's driven by fundamentals, then speculation takes over. As the old saying goes, what the wise man does in the beginning, fools do in the end. With any asset class that has a big move, first the fundamentals attract speculation, then the speculation becomes dominant.
Once a price history develops, and people hear that their neighbor made a lot of money on something, that impulse takes over, and we're seeing that in commodities and housing...Orgies tend to be wildest toward the end. It's like being Cinderella at the ball. You know that at midnight everything's going to turn back to pumpkins & mice. But you look around and say, 'one more dance,' and so does everyone else. The party does get to be more fun -- and besides, there are no clocks on the wall. And then suddenly the clock strikes 12, and everything turns back to pumpkins and mice."

See that Buffet thinks theres a bubble in oil and metals aswell as housing, although not in agricultural commodities. So everything appears to be getting overvalued. Is it time to stick with cash


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## walk2dewater

Got gold?


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## Howitzer

walk2dewater said:
			
		

> Got gold?


 
I think we all get the point by now, you like gold.

You're starting to sound like a common or garden speculator, simply hyping up the asset. How is this any different to promoting shares which obviously isn't, and shouldn't, be allowed on the site?


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## walk2dewater

I'm singlehandedly pumping up the price of gold by posting on this forum? huh? Flattering, but I'm not George Soros.

I'm attempting to promote a discussion about broader issues, and away from the narrow tiresome debate over property ("is it/isnt it, will it/wont it") which dominates the Great Financial Debate board.

My view is that gold is flashing INFLATION, INFLATION, INFLATION. Do you agree or disagree, or not know?

Is this not worthy of debate on the GFD board?

I do feel that Im talking to myself though. If no wants to debate this topic then sure, close the thread.


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## jpd

I agree that the situation is worrying, particularly as regards the US. The americans are going to let the dollar go into freefall, then they will be glad to let inflation take off and so help them to reduce the real value of their debts - particularly the mortgage debts. 

How this will spill over into the rest of the world isn't as clear to me but undoubtedly it will have an effect - and probably not a good one. Probably the BCE will raise rates to head off this inflation and thus cool off the property and shares values but then again, companies can raise their prices and keep the profits flowing although some sectors  will be able to do this better than others.

Should be an interesting few years!


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## darex

walk2dewater said:
			
		

> My view is that gold is flashing INFLATION, INFLATION, INFLATION. Do you agree or disagree, or not know?



I don't agree with this. Headline Inflation can and will be controlled by Central banks. I think that it is indicating general uncertainty - particularly uncertainty regarding oil


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## walk2dewater

darex said:
			
		

> I don't agree with this. Headline Inflation can and will be controlled by Central banks. I think that it is indicating general uncertainty - particularly uncertainty regarding oil


 
So you believe that the overall purchasing power of those euros in your pocket (assuming) is being eroded by 2-3%p.a?


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## darex

walk2dewater said:
			
		

> So you believe that the overall purchasing power of those euros in your pocket (assuming) is being eroded by 2-3%p.a?



When discussing gold we are obviously talking about western economy inflation (rather than irish inflation). So while you are probably right regarding irish inflation I would think that inflation measures in general in Western economies are fairly accurate


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## walk2dewater

http://business.timesonline.co.uk/article/0,,16849-2174109,00.html

"The [BOEs] comments echoed those made earlier this week when the world’s top central bankers sounded a renewed alert over inflationary dangers, expressing concern that booming global growth could spark an outbreak of cost and price pressures. 
In a hawkish declaration after talks in Basel among central bank governors from the Group of 10 leading economies, Jean-Claude Trichet, their chairman, said that "very special attention" was needed over inflationary risks worldwide." 

Too low rates for too long = borrow borrow borrow = too many euros and dollars flying around = inflation is back = switch to gold to protect your wealth


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## soma

Seeing as Irish inflation is now 3.8% (and probably poised to go higher), Gold is looking pretty damn attractive right now *lol*


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## walk2dewater

To restate my position, inflation is out of control.  IMHO official price inflation calculations are absurd.

price inflation calculations have been manipulated so much as to be meaningless.  Case in point:  Mortgage payments rather than actual property prices are used to in the CPI calculation.  This has the perverse affect of pumping "inflation" when interest rates are increased.  So the higher rates go, the higher mortgages payments rise, the higher irish inflation.  How surreal is that?

I would peg actual price inflation somewhere closer to M3/M4 expansion-- i.e. 10%+


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## Nermal

walk2dewater said:
			
		

> Case in point: Mortgage payments rather than actual property prices are used to in the CPI calculation. This has the perverse affect of pumping "inflation" when interest rates are increased.


 
I heard this on the radio earlier in the week and shook my head, putting it down to poor explanation on the part of the talkshow host, but now I find that it's actually true. It's insane, it makes no economic sense whatsover and makes a joke of inflation target setting.


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## walk2dewater

The market action in the last few days has spooked me. Ive bought some puts on the US indices. Will hold most of my positions in precious and base metals, and energy though

*********************************************
You could a lot worse than follow the advice of this man.
http://corporate.bmo.com/publications/basicPoints/

Donald Coxe also puts out a weekly (friday) webcast
http://bmoharrisprivatebanking.com/webcast.asp
click thru to listen to his weekly calls.

He's a bit of a wind-bag, so best to read his monthly Basic Points publication to get up to speed with this views.

In a nutshell Coxes advice continues to be:

*Metals, including precious metals are in a long-term bull market.
*So is energy and basically any commodity 'Chindia' needs
*Canadian Oil Sand stocks are a unique asset class and should be bought and held regardless of the wider macro situ
*Recession/slowdown in the US is on the cards, probably this year.
*US dollar is in a long-term bear market
*Stocks of commodity companies have not risen along with the actual commodities-- after the recession/slowdown they will begin their own bull run
*The next 12mths is a window of opportunity to buy into these stocks, i.e. they'll fall in sympathy with the wider market


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## Foxtrot

Buying gold is a way of storing value against a devaluing currency, correct? So what's the logic of someone in Europe buying gold in USD? If the value of the dollar falls, you aren't protecting your wealth because you're still subject to the currency risk. I do think the value of the dollar will fall, but I'm not interested in buying gold because I think the long term position of European stock markets is quite strong, and I see no reason to convert to a falling currency to purchase commodities.

Commodity companies an interesting prospect, however.


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## walk2dewater

Foxtrot said:
			
		

> Buying gold is a way of storing value against a devaluing currency, correct? So what's the logic of someone in Europe buying gold in USD? If the value of the dollar falls, you aren't protecting your wealth because you're still subject to the currency risk.


 
See post No.13. Gold is a "currency", and it's appreciating against all the paper currencies. Doesnt matter what you exchange for it.

Ask yourself how much gold you'd need to buy the same house in Ireland this year versus last? Even with the continued mania in Irish property, the answer is "a lot less".

Alternatively, how much of anything does 100oz of gold get you today versus a year ago? Answer "a lot more"

The international markets are waking up to the debasement of paper currencies and are forcing a "gold standard" on the central bankers.

********************************
How to go about getting exposure to this asset?

For Irish investors I'd suggest opening an account at Internaxx, then start buying into a precious metal mutual fund, also buying into the ETF on LSE or New York. Also pick up some bullion at www.gold.ie. "average in" on a regularly, weekly, monthly basis.


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## Howitzer

walk2dewater said:
			
		

> Also pick up some bullion at www.gold.ie. "average in" on a regularly, weekly, monthly basis.


 
Just to be clear, you have no connection to that site?


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## walk2dewater

Howitzer are you a moderator, webmaster here?

if not, what's with the sniping? I gather you don't like what Im saying, cant form alternate opinion, cant debate, so have to sniper from the long grass? If so, sad.

*************************************************

I have no connection with that site. I refer to gold.ie as they are the only source of over the counter bullion in Ireland. Neither have I any connection whatsoever with internaxx, I just recommend them as the best value internet broker available in Ireland.

If mentioning specific brokers, dealer etc is against mb rules, my apologises to the webmaster.


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## Howitzer

Just asking.

Due to gold being off the investment radar for so long I've no basis for where to place a true value on it. I only invest in stuff that I have a very good understanding of and don't think I'll really be able to invest in gold for another while, but it does appear to have returned as an investment class worth considering.

As such when someone is giving advise, either positive or negative, I find it instructive to know what their interests are in the matter, if indeed they have any.

I'm not sniping, I'm just looking for clarity for my own benefit. The fundamentals behind the true value appear to be quite complicated and open to various interpretations. I still couldn't tell you what a top or bottom value range could be.


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## walk2dewater

Gold's 200 day moving average is ~US$550oz.  I will be backing up the truck at that price.  When?  Probably August, September.


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## smiley

sorry a tad confused..to sell or buy??


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## walk2dewater

smiley said:
			
		

> sorry a tad confused..to sell or buy??


buy. and I'll go 3 ways; ETFs (XAU), bullion coins, shares.


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## Lumpsum

Does anyone know of gold ETFs available through Irish brokers and if not, how one would invest in them?  Have skimmed www.gold.ie.  It seems that unless you can invest in a fund you must either get a lump of gold physically delivered into your possession (I don't fancy keeping a valuable object like that knocking about the house) or else pay charges to someone to store it, eating into the value of your asset.  Any alternative ideas?


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## jpd

There are gold ETFs sold on the NYSE, LSE and Euronext markets. You need to ask your broker whether they will purchase them on your behalf. Alternatively, you need to open an account with an on-line broker that will allow you to purchase on these exchanges

I don't know if it breaking the rules to nale the ETF ?

NYSE - Streettracks Gold, code GLD
Euronext - Lyxor Gold Bullion, code GBS
LSE - Lyxor Gold Bullion, code GBS


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## ionapaul

You can buy GLD (Streettracks Gold ETF) via Davy.


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## jpd

Note that in all cases, you will have a currency risk and inflation. All of these ETFs track the gold price in $/oz - so as $ depreciates, so those your investment unless gold price rises to compensate. The inflation risk is that gold will not rise to cover inflation.

Depending on the period you look at, gold has been a great, OK, bad or completely hopeless investment over the last 40-50 years.


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## dam099

jpd said:
			
		

> Depending on the period you look at, gold has been a great, OK, bad or completely hopeless investment over the last 40-50 years.


 
Exactly, gold has been hitting 25-30 year highs recently. If you bought in the last 2-3 years you would have made a lot of money but if you bought 25-30 years ago your investment has just regained its original value and in the interim you would have lost a significant amount of money in real terms due to inflation.


----------



## walk2dewater

Gold is rising because of inflation.  Inflation driven by excessive money creation on one hand, and cost inflation by the scramble for resources, metals, energy, etc. by 'Chindia' on the other.  Just like in the late 70s the central banks won't slam the door on inflation until it's already out, and they will have to raise interest rates to 1980s levels to get inflation under control.  And under control they must, or else it's bye bye the world as we know it...

The fear of inflation, i.e. fear of having your wealth robbed, has just started, hence the run on gold has just started.


----------



## joe sod

Yea I agree with the last posting. I have been reading a lot about it over the last few years. It appears that all assets go through periods when they are in fashion and out of fashion. Gold was in fashion up to 1981 but then alot of people got burnt by it for the next 20 years. It has now been rising since 2001 but it has really only become fashionable in the last year as the mainstream media have started to focus on it. Many people are saying that it is due for a big correction and some are even comparing it to the technology bubble. However it is no where near that yet. It is interesting that gold and silver also suffered big corrections in 2004 with silver dropping from $8 to under $6. This correction attracted virtually no media attention. However when silver dropped recently from $14.40 to just over $11 some commentators were saying the bubble had burst. However it seems to confirm more that it is coming more and more into fashion as its price moves are drawing more and more media attention.


----------



## tyoung

I agree there is no currency risk in gold. The risk to gold is that central bankers might act as adults and impose some financial discipline on what are clearly bubbling asset markets. Crunch time is approaching. Growth seems to be slowing while inflation seems to be rising. If the CBs duck this and "Go for Growth" gold could expode upwards.
 On the other hand if the ECB went 0.5% in June and the fed went 0.25% at their next meeting and came out with a hawkish statement and the Japanese went 0.25% sometime over the Summer, gold would take a hammering.
The point is it is not inflation itself that is the problem it's the perception that CBs are ducking their responsibility. They are under enormous political Pressure. Has anybody ever heard of a (successful) politican anywhere in the world calling for higher interest rates?
Regards


----------



## walk2dewater

And yes generalised inflation is good for all hard assets-- this would include property.

Normally.

That is, if those holding large mortgages can manage with double digit interest rates, can win wage increases in line with broader inflation, nor lose their jobs in any macro turbulence. Rem: it was WAGE inflation that eroded the real cost of mortgages taken out in the 70s.

Investing profitably in gold may mean you can subsidise/offset the mortgage.


----------



## ivuernis

walk2dewater said:
			
		

> can win wage increases in line with broader inflation


 
Is that really possible though? Especially in Ireland?


----------



## conor_mc

walk2dewater said:
			
		

> See my gold thread. IMHO inflation is out of control, rates will have to go much much higher


 
Just had a look at your Gold thread. I can see you backing gold on the argument of inflation heading north, but I don't really see you justifying the inflation claims.

Not knocking you, just interested in hearing a bit more about why you think inflation is way ahead of the official figures.


----------



## walk2dewater

conor_mc said:
			
		

> Just had a look at your Gold thread. I can see you backing gold on the argument of inflation heading north, but I don't really see you justifying the inflation claims.
> 
> Not knocking you, just interested in hearing a bit more about why you think inflation is way ahead of the official figures.


 
My post No.59 sums it up.


----------



## soma

Would anyone like to try to interpret the drop gold suffered in the last two weeks..? Some profit taking perhaps..?

WTTW - I believe you mentioned something in & around the $550/oz mark for gold & that you would 'back the truck up' at that price. Are you saying you think Gold will fall and then 'bounce' off $550 or what did you mean..?


----------



## abakan

Hi all,

Ive just this piece - maybe its written by walk2dewater!!!! - he can only see gold going up aswell
http://www.gold-eagle.com/editorials...mel122205.html

He makes some good points and also about siver aswell.


----------



## poormouth

Does anyone know what are the tax implications in Ireland when converting Gold holdings back to euros?


----------



## joe sod

gold and especially silver have come down significantly in price over the last 3 weeks. Do people think they have much more to fall. There has been an awful lot of speculation in the silver market especially


----------



## walk2dewater

I reckon $550 is a good entry point ~ I see that rabodirect are offering unit trusts at cheap prices ~ they have two of particular interest, "world gold" and "world mining" ~ they also allow small periodic purchases


----------



## room305

I'd be surprised if gold falls that low to be honest, I think it'll dip to just under €600 before pulling up. Given that inflationary fears haven't gone away, prices of $700 or more an ounce wouldn't be surprising for next year. If you're keen on gold, I reckon the "averaging" strategy mentioned by walk2dewater earlier in this thread is a good way to get in.


----------



## soma

walk2dewater said:
			
		

> Gold's 200 day moving average is ~US$550oz.  I will be backing up the truck at that price.  When?  Probably August, September.


Well WTTW we're almost down to $550 - have you got the truck ready..?


----------



## room305

Having managed to get my previous comment spectacularly wrong, I'm now thinking it will fall even further. Probably to around $520 but maybe even as low $500.

I'm bullish about the long term prospects of gold and I think a fantastic investment opportunity is starting to present itself.


----------



## owenm

ivuernis said:
			
		

> Is that really possible though? Especially in Ireland?



It must have been at some time, if inflation was 15% for three years and interest rates rose to the same you would have to be getting similar increases or else...


----------



## Remix

My own humble opinion on gold is:

As long as there is widespread belief that interest rates are going higher, perhaps even sharply higher, then gold is less important as a hedge.


----------



## ivuernis

owenm said:
			
		

> It must have been at some time, if inflation was 15% for three years and interest rates rose to the same you would have to be getting similar increases or else...


 
I don't think it's possible for wages in Ireland to rise significantly higher to offset higher inflation. From a cost competitiveness point of view we are already slipping way down that league. 

Stagflation? Anyone?


----------



## ivuernis

Remix said:
			
		

> My own humble opinion on gold is:
> 
> As long as there is widespread belief that interest rates are going higher, perhaps even sharply higher, then gold is less important as a hedge.


 
Yes, in times higher interest rates gold is less important as cash would become king but interest rates aside for the moment as they are still low by historical standards wouldn't one think with the markets taking a beating at the moment that gold would actually be increasing in price as people look for a safe haven and also because gold generally moves in the opposite direction of the stock markets. It's obvious that gold is tied up with the general bull market in metals and perhaps things are not yet bad enough for people to see that gold is the ultimate store of value in times of uncertainty. However, if the stock markets are in the beginnings of a bear cycle wouldn't gold at some point detach from the general market trend and head upwards?


----------



## walk2dewater

ivuernis said:
			
		

> Yes, in times higher interest rates gold is less important as cash would become king but interest rates aside for the moment as they are still low by historical standards wouldn't one think with the markets taking a beating at the moment that gold would actually be increasing in price as people look for a safe haven and also because gold generally moves in the opposite direction of the stock markets. It's obvious that gold is tied up with the general bull market in metals and perhaps things are not yet bad enough for people to see that gold is the ultimate store of value in times of uncertainty. However, if the stock markets are in the beginnings of a bear cycle wouldn't gold at some point detach from the general market trend and head upwards?


 
I still think US$550oz is a good point ~ I have been averaging into 3 precious metal mutual funds (aka unit trusts) at $100 each per week.  I'm going to bump that up to $200 as gold drops lower, and perhaps make a few big lump-sum purchases of actual bullion in late summer.

The markets are exceptionally volatile and chaotic (gold down, while inflation fears up?  huh?), stay in CASH until this phase passes.  Nothing real has changed since early May.  What we're seeing is a purely _financial_ correction.  Some say the hedge funds are moving in and out in response to higher interest rates.  Whatever.  Economy-wise it's still the same macro story as before.  If you believe that we're in a bout of very strong price inflation, and central banks can't/won't raise rates high enough, then gold and gold shares are even better value than before this correction.


----------



## walk2dewater

Oh, and I think gold shares, say as per the HUI index, are due a big bounce, maybe this week (or today even).  Actual gold price will probably bounce around US$550 like a yo-yo.  Dems mye perdictions!


----------



## soma

walk2dewater said:
			
		

> (gold down, while inflation fears up?  huh?)


That really confused me alright.


----------



## joe sod

yea I agree with the above postings, I hold silver bullion and was thinking of getting out a month ago with a view to getting back in, but didn't. However speculation is driving the market crazy. But I think this will ensure that the bull market will last an awful lot longer as most people are still afraid to buy into it due to the high volatility. 
     What do people think about commodities in general, do they really believe in the commodities bull market story lasting many years.


----------



## smiley

hi joe..i feel we are only at the beginning of what will be a long bull run for commodities....i suggest you have a read of mark shipmans book new book ' the next big investment boom' as well as discussing his reasons why commodities will prosper, he has some very good guidelines of how to watch out for a get involved in trends.......the trend is your friend.


----------



## joe sod

Is there any more liquid way of buying silver than silver bullion which I have. I know that you can buy gold like a stock on the NY stock exchange with the ticker GLD. I also heard that this is will be possible for silver. Does anyone know more about this. This is essentially the reason why I failed to take advantage of the last upswing as it was too cumbersome to liquidate my positions. However I am in silver for the long haul maybe it is a dummies game to try and take advantage of big upswings.


----------



## soy

SLV is the ticker for the equivilant Silver ETF.


----------



## walk2dewater

Gold shares have bounced as I hoped for, HUI was up dramatically yesterday and I expect more in the coming days. Even with gold at mid US$500 these gold producers will make a tonne of profit. Im going to unload a few % points here as I feel the market has yet to flush out completely (am expecting another down leg for stock markets generally b/n now and Sept/Oct). Looking to buy some bullion here, waiting for the magic US$550 though !!

Keep the faith in gold though. The story hasnt played out, we're still not out of the early stages of this run. The herd has yet to embrace the role of bullion as an inflation hedge, let alone drive it to bubble levels. And as I've said inflation is NOT going away anytime soon. We'll need a much more aggressive stance by CBs, and despite the recent saber rattling, I dont believe they have the cajones. At the first sign of recession the CBs will reinflation the money supply (cut rates)

Good luck!
*****************************
ps: was in Berne, Switzerland recently and bought some bullion over the counter at Credit Suisse bank.  You can buy from any swiss bank up to 1kg of the stuff, commissions are 2-7% on Zurich(?) price.  Unbelieveable, what a country!


----------



## darex

walk2dewater said:
			
		

> And as I've said inflation is NOT going away anytime soon. We'll need a much more aggressive stance by CBs, and despite the recent saber rattling, I dont believe they have the cajones. At the first sign of recession the CBs will reinflation the money supply (cut rates).



walk2dewater you have said this a couple of times and if it is true it is certainly a very good reason to buy gold. However I don't see where you are getting the idea "At the first sign of recession the CBs will reinflation the money supply (cut rates)". 

You are obviously talking about a stagflation scenario because otherwise cutting rates is the logical thing to do in a recession and it doesn't cause inflation. Given a stagflation scenario - which I also believe is quite plausable - it becomes a moot point as to whether or not the CB's will behave as you suggest. Looking at the ECB I think it is very unlikely that they will cut rates in such a situation. Since:

1) They are legally mandated to keep inflation within a certain band
2) Their professional credibility depends on keeping inflation below a certain point
3) The ECB has inherited some of the Bundesbank's legendary inflation fighting traditions.

For these reasons I think the ECB will always prioritise inflation control over growth and it would take a change in instutional structure by European politicians to change this - and given how long it takes to change anything in the EU - even when there is agreement, such changes are unlikely to be implemented until after our "current situation" has passed.

I think you may have a stronger case in the case of the Federal Reserve. Its mandate seems to be less clear and I suspect it is more open to political pressure - even so I still don't see it letting inflation getting wildly out of control


----------



## walk2dewater

darex said:
			
		

> You are obviously talking about a stagflation scenario


 
Yes I am.  We are in the endgame though, and the next installment will be deflation.  But not before a final spike in inflation that will send the price of gold bullion soaring and mark the beginning of a nasty recession.  Just before deflation you'll want to shift back to cash and bonds of political secure, well governed, resource-rich countries, and it wouldnt be a bad idea to own your home sans mortgage.  I'm speaking generally, globally.  I know this is bleak, but don't blame me!


----------



## room305

walk2dewater said:
			
		

> Just before deflation you'll want to shift back to cash and bonds of political secure, well governed, resource-rich countries, and it wouldnt be a bad idea to own your home sans mortgage.  I'm speaking generally, globally.  I know this is bleak, but don't blame me!



I guess the key will be to get out of gold and into cash near the peak. Might be a very tough one to time.


----------



## joe sod

Could tightening liquidity be good for gold. In other words if interest rates rise alot then people with huge debts will simply default on their debts. if they default on their debts then the banks could be in danger. In that scenario savers would get worried about the safety of their bank deposits and move their savings from banks to gold.


----------



## walk2dewater

Of the dozen of so scenarios I can think of gold comes out on top in every one.

ps: Wholesale defaulting on debt has similar effect as hyperinflation, fiat money quickly becomes worthless. cf. Weimar Germany, etc.


----------



## room305

walk2dewater said:
			
		

> Of the dozen of so scenarios I can think of gold comes out on top in every one.



What about if ...

All the world's central bankers successfully negotiate the delicate tightrope of raising interest rates sufficiently to combat inflation but manage to avoid killing economic growth. At the same time, asset bubbles like housing don't collapse completely but experience the much vaunted "soft landing".

Inflation drops to an entirely spurious index level of below 2% and the rate rises stop. The bull market in stocks continues unabated, everyone hails the brilliance of the central bankers and any shaken confidence in fiat currency is restored ...

It could happen you know.


----------



## walk2dewater

room305 said:
			
		

> What about if ...
> 
> All the world's central bankers successfully negotiate the delicate tightrope of raising interest rates sufficiently to combat inflation but manage to avoid killing economic growth. At the same time, asset bubbles like housing don't collapse completely but experience the much vaunted "soft landing".
> 
> Inflation drops to an entirely spurious index level of below 2% and the rate rises stop. The bull market in stocks continues unabated, everyone hails the brilliance of the central bankers and any shaken confidence in fiat currency is restored ...
> 
> It could happen you know.


 
right, the perpetual motion machine scenario...


----------



## walk2dewater

What about the scenario where everyone sells each other property for higher and higher prices thus generating equity which is used to leverage into more property which gets sold on at an even higher price thus generating equity which is....
er... sorrry wrong thread


----------



## joe sod

"What about if ...

All the world's central bankers successfully negotiate the delicate tightrope of raising interest rates sufficiently to combat inflation but manage to avoid killing economic growth. At the same time, asset bubbles like housing don't collapse completely but experience the much vaunted "soft landing"."

Its either one or the other. Either they kill off inflation by raising interest rates substantially which would cause all the asset bubbles to collapse leading to widespread debt default. Or they let inflation rise but also raise interest rates modestly under the pretext of fighting inflation thereby preventing asset bubbles from bursting. From reading many commentaries central banks are alot more afraid of bursting asset bubbles than inflation. Therefore I think inflation will be allowed to run thereby reducing the real debt that people will have to pay back.


----------



## walk2dewater

joe sod said:
			
		

> "hereby reducing the real debt that people will have to pay back.


 
if their wages also rise...


----------



## room305

joe sod said:
			
		

> Either they kill off inflation by raising interest rates substantially which would cause all the asset bubbles to collapse leading to widespread debt default. Or they let inflation rise but also raise interest rates modestly under the pretext of fighting inflation thereby preventing asset bubbles from bursting.



Surely even modest interest rate rises greatly increase the likelihood of asset bubbles bursting? These bubbles were created by an excess of global liquidity due to extremely low interest rates, this encouraged borrowing and speculation leading to price increases. Eventually, they became the self-perpetuating cycle that currently existing in the Irish housing market. Increasing borrowing costs will put this process into reverse.

The inflation index doesn't include the cost of housing, Icelandic bonds, emerging market indexes, industrial metals or any of the other numerous bubbles that have sprung up around the world. Since the ECB exists to fight inflation, issues like economic growth or how much you paid for your house are incidental to the great inflation fight.


----------



## darex

There is an assumption in this thread that "true" inflation is much higher than the headline rates of inflation that are targeted by the central banks. This argument is obviously critical for the whole buy gold thesis because otherwise to retain value (as distinct from increasing it) you would just stick your money in a savings account and earn 3% interest which is roughly the same as the headline inflation rate. 

I would be interested if anyone has any references to back up the idea that true inflation is much higher than the headline rates of inflation.


----------



## room305

darex said:
			
		

> I would be interested if anyone has any references to back up the idea that true inflation is much higher than the headline rates of inflation.



The costs of owner-occupied housing aren't included except, if I remember correctly, for some costs of repairs.

Also, if you strip out luxury goods and only include essential goods, then the inflation rate jumps to about twice the official rate.

However, I tend to look at the rate of increases of pay for civil servants, politicians and company ceos. How happy do you think they would be to have their salaries linked to the official inflation rate?


----------



## joe sod

*Market volatility spoils the SSIA party*

*Just when everything was going swimmingly well, along came a stock market slump which gave equity SSIA holders a kick in the financial pants*

And accountant Cyril Keegan, a partner in Dublin-based private accountancy practice Command, also counsels against abandoning the stock markets because of recent jitters. 
"The fundamentals in the markets are quite good. Commodities like gold are weak, which is an indication that confidence is coming back." 

Just a few quotes from an article in todays independent. Dont worry everythings OK again cos gold is weak, what simplistic drivel ... I think the equity based SSIAs will suffer alot more losses before the period is up.


----------



## room305

joe sod said:
			
		

> Just a few quotes from an article in todays independent. Dont worry everythings OK again cos gold is weak, what simplistic drivel ... I think the equity based SSIAs will suffer alot more losses before the period is up.



To be fair, they did warn that anyone alarmed by volatility should probably switch to cash or bonds. It really depends on how long people are willing to stick with their investment.

As for gold being weak? It has bounced back impressively from its May lows but it is definitely not an investment for someone concerned about volatility.


----------



## walk2dewater

room305 said:
			
		

> To be fair, they did warn that anyone alarmed by volatility should probably switch to cash or bonds. It really depends on how long people are willing to stick with their investment.
> 
> As for gold being weak? It has bounced back impressively from its May lows but it is definitely not an investment for someone concerned about volatility.


 
I still think we'll see gold at $550 before >$740 again. Why? Central banks are stepping up their interest rate hikes. It's only windowing dressing mind you, to properly tackle the consequences of real negative rates of the early 2000s we'll need extreme measures like in the late 70s, but that won't happen just yet. Hence, I reckon we're in for another round of soft pricing for gold. All IMHO of course.


----------



## room305

I could see price falls as well, in the August/October period maybe. Seems to be decoupling from stocks as well. Today, as I'm just looking, it has jumped incredibly but is still well off the $740 peak.

For anyone interested in diversifying into gold but who is perhaps uncomfortable with such volatility, gold mining stocks might be an option. Although I'd be interested in hearing W2DW's opinion on such a strategy.

Personally, if we see a fall in gold prices in a few months, I'll be buying gold bullion coins and burying them in the backyard


----------



## walk2dewater

room305 said:
			
		

> I could see price falls as well, in the August/October period maybe. Seems to be decoupling from stocks as well. Today, as I'm just looking, it has jumped incredibly but is still well off the $740 peak.
> 
> For anyone interested in diversifying into gold but who is perhaps uncomfortable with such volatility, gold mining stocks might be an option. Although I'd be interested in hearing W2DW's opinion on such a strategy.
> 
> Personally, if we see a fall in gold prices in a few months, I'll be buying gold bullion coins and burying them in the backyard


 
A certain unmentionable on-line bank in Ireland starting with the letter "r" offers a gold mining stock fund and you can set up a regular €100 contribution plan.  Ideal way to average-cost into a gold equity position.  I would suggest no more than 10%, 15% at most in this asset type for novices.  If the fund does well, sell off some portion to keep allocation at the 10%-15% mark.  Another unmentionable international broker based in Luxembourg starting with the letter "I" sells mutual funds and anything traded on all the major intl xchanges.

I believe these topics have been covered earlier in this thread.


----------



## Eurofan

Have been waiting to get a position on Gold for a while now and will probably be moving slowly over the next few months.

One thing that intrigued me though is the noises the Chinese and Saudis in particular have been making about diversifying into Gold. Obviously you're looking at a big quantity for such a move.

Why are they pre-announcing such a move and what impact will (both the announcment and the eventual move) have for the price of Gold in peoples opinions?


----------



## gabhla

*Krugerrands*

Hi,
Are Krugerrands available for purchase in Dublin in small quantities at a time?
thanks


----------



## room305

*Re: Krugerrands*



			
				gabhla said:
			
		

> Hi,
> Are Krugerrands available for purchase in Dublin in small quantities at a time?
> thanks



www.gold.ie sell Krugerrands although I'm not 100% about quantities, I think you can purchase a small number of coins.


----------



## walk2dewater

Gold to $575... BUY between here and there.. shares, bullion, ETFs whatever u fancy...

IMHO of course


----------



## room305

I think gold will jump up and down a bit between now and the end of Aug-early Sept. Mainly around the $620-$570 level. Maybe dip as low as $550. Think the first week in August is usually a seasonal low for gold but with the conflict in the ME escalating, who knows?

I'm averaging in now and reckon anything around these prices will look like the bargain of the century in a few years time.


----------



## walk2dewater

changing my mind again J

Im buying right now, today, at current levels…. back on the gold train….


----------



## room305

walk2dewater said:
			
		

> changing my mind again J
> 
> Im buying right now, today, at current levels…. back on the gold train….



Interesting. Very interesting. What made you change your mind?


----------



## walk2dewater

Gold won’t break down any further, it’s forming a bottom.

The No.1 bubbly property market in Western world is about to go ballistic.

So after some mulling these 2 seemingly unrelated points about in my little brain, combined with the cushion of some excellent gains on options recently, I reckon its time to gradually increase my % of gold !!


----------



## room305

walk2dewater said:
			
		

> Gold won’t break down any further, it’s forming a bottom.
> 
> The No.1 bubbly property market in Western world is about to go ballistic.
> 
> So after some mulling these 2 seemingly unrelated points about in my little brain, combined with the cushion of some excellent gains on options recently, I reckon its time to gradually increase my % of gold !!



I guess the increased level of interest from UAE, China etc. and general awareness of gold could have caused this. I am sceptical though and this coupled with the fact that I have some irons in the fire elsewhere, mean I will hold off increasing my allocation.

In a few years though, whether you bought in at $635 or $570 will probably seem somewhat academic.

So no retest of the magic 50dma for gold. I'm more than a little intrigued by this turnaround W2DW and shall watch from the sidelines (for the moment) with interest.


----------



## soma

walk2dewater said:
			
		

> The No.1 bubbly property market in Western world is about to go ballistic.


It really does seem primed to go nova over there doesn't it..?


----------



## room305

Trading volume on GLD ETF looks light still, despite the latest jump, so I think the "seasonal low" will still hold for August.

What's the "no. 1 bubbly property market in the Western world"?


----------



## walk2dewater

room305 said:
			
		

> What's the "no. 1 bubbly property market in the Western world"?


 
Ireland.  And by 'ballistic' I mean, up, a lot.

Things I've heard and seen recently have made me realise I've (vastly?) underestimated the true extent of Irish religious zeal for property.

No more discussion of the P word, dont want this thread blocked


----------



## Contrarian

I think we're turning Japanese, I say we're turning Japanese I really think so....


----------



## room305

walk2dewater said:
			
		

> Ireland.  And by 'ballistic' I mean, up, a lot.
> 
> Things I've heard and seen recently have made me realise I've (vastly?) underestimated the true extent of Irish religious zeal for property.
> 
> No more discussion of the P word, dont want this thread blocked



I hear ya. Wouldn't disagree either on the property front.

I'm more cautious on gold. Would still expect a retest of yearly lows - or fall close to - next month or maybe early Sept, before we see the bull run of the century.

Though for full disclosure I should admit I am holding a small short position on gold, so perhaps that is colouring my opinion.


----------



## Duplex

Hmmmmm...

http://www.google.com/trends?q=buying+gold&ctab=1&geo=all&date=all


Aah..

http://www.google.com/trends?q=buying+gold%2C+spanish+property&ctab=1&geo=all&date=all


----------



## ivuernis

walk2dewater said:
			
		

> Ireland. And by 'ballistic' I mean, up, a lot.


Scratches head. 



			
				walk2dewater said:
			
		

> Things I've heard and seen recently have made me realise I've (vastly?) underestimated the true extent of Irish religious zeal for property.


Perhaps you could post some of those things you heard over in the appropriate thread?


----------



## joe sod

What about silver, is anyone interested. So WalkdWater you say you are jumping back in now. So what are you jumping back into? Is it the mining shares. the Gold ETF, or Gold futures, hardly bullion. Did you get completely out of gold a few months ago or just reduced your holdings. Ive held silver and gold bullion for about 2 years now. However it was a bit unusual the way gold, silver and equities dropped in unison. The turmoil in the middle east seems to be making investors rush to oil rather than gold. Any Thoughts ?..


----------



## walk2dewater

Here’s a good bit of analysis (Isnt the web great)

http://www.safehaven.com/article-5615.htm

Gold is a ‘technical’ trade rather than a ‘fundamental’ one.  We could see gold trading in the $550-$680 range for ages.  However, another big run, like we saw this Spring is as close to a ‘sure thing’ as it gets, and it could happen anytime IMHO.

You should hope the range-bound situation sticks around for a while.  Long enough for you to average in with regular little purchases and build a nice low-cost base.  Aim for 5-15% of your net worth, recomm higher end of this if Irish property is a major part of your wealth.


----------



## walk2dewater

joe sod said:
			
		

> What about silver, is anyone interested.


[broken link removed]



			
				joe sod said:
			
		

> So WalkdWater you say you are jumping back in now. So what are you jumping back into? Is it the mining shares. the Gold ETF, or Gold futures, hardly bullion. Did you get completely out of gold a few months ago or just reduced your holdings. Ive held silver and gold bullion for about 2 years now. However it was a bit unusual the way gold, silver and equities dropped in unison.


reduced.  Heading back towards 15% mark now.  mostly shares (3 diff mutual funds)



			
				joe sod said:
			
		

> The turmoil in the middle east seems to be making investors rush to oil rather than gold. Any Thoughts ?..


Yes, it is strange.  No, I still think gold is going much higher.


----------



## room305

walk2dewater said:
			
		

> Gold is a ‘technical’ trade rather than a ‘fundamental’ one.  We could see gold trading in the $550-$680 range for ages.  However, another big run, like we saw this Spring is as close to a ‘sure thing’ as it gets, and it could happen anytime IMHO.



Well there are long term fundamentals at play but certainly technical analysis plays its part. I am averaging in a small amount every month but haven't seen anything yet to convince me that I should start greatly increasing this amount.

Like yourself (although perhaps this has changed) I have the bulk of my savings in cash and am prepared to wait a few weeks before converting a large portion of this cash to gold.

Next week has been seasonally the lowest week for gold for several years now. Should be interesting to see how things transpire next week.


----------



## smiley

the most recent fund managers report from rabos ml gold fund is an interesting read.....ok its biased but its interesting the way they are thinking none the less..

[broken link removed]


----------



## darex

Interesting analysis and chart at this location about gold and inflation http://www.freemarketnews.com/Analysis/167/3368/2006-01-03.asp?wid=167&nid=3368. It would imply that to rival the 1979 peak gold would have to go a lot higher. It would also imply though that long term gold is set to decline - and hence is an investment that should only be made if you are confident about timing it - any thoughts anyone?


----------



## ivuernis

darex said:
			
		

> Interesting analysis and chart at this location about gold and inflation http://www.freemarketnews.com/Analysis/167/3368/2006-01-03.asp?wid=167&nid=3368. It would imply that to rival the 1979 peak gold would have to go a lot higher. It would also imply though that long term gold is set to decline - and hence is an investment that should only be made if you are confident about timing it - any thoughts anyone?


 
Yes, were gold adjusted for inflation prices today would need to be circa 
$2,000 per oz to equal 70's records. See the graph under the heading 
Gold vs its own long term average

As for long-term gold I don't know enough to hazard a guess. W2DW is 
your man for this but one thing I will say about the report you mentioned 
is that the section on oil is way off. We may be using oil and gas more 
efficiently but we also using more of it and the expectation is that 
production will rise to meet demand. Likewise oil prices have another bit 
to go before they equal inflation-adjusted levels ($100) reached in 1979.


----------



## darex

ivuernis said:
			
		

> W2DW is
> your man for this but one thing I will say about the report you mentioned
> is that the section on oil is way off. We may be using oil and gas more
> efficiently but we also using more of it and the expectation is that
> production will rise to meet demand. Likewise oil prices have another bit
> to go before they equal inflation-adjusted levels ($100) reached in 1979.



presumably you mean that demand will rise to meet production?

Agree with you in general about the point on high oil prices not causing a recession is a bit dodgy. The fact that Germany and Japan didn't have recessions in 1979-1982 is interesting though (my personal explanation is that for various reasons some parts of an economy always do well in a recession and that while the world as a whole went into recession Germany and Japan were - for whatever reason - able to take advantage of the situation.)


----------



## Contrarian

Extremely good Gold analysis this week on Jake Bernsteins Futures trading letter at [broken link removed]
late Aug may be a good time to go long....


----------



## room305

Contrarian said:
			
		

> late Aug may be a good time to go long....



Tough to call. Gold could explode at any moment or crash back down to around $580. I'm betting on it falling in the short term before going on a sustained rally long into next year. However, it may be advisable to start averaging in now.


----------



## RiceCakes

Not sure where to post this, as this is a Gold dedicated thread it seemed most appropriate.
Was looking at the various methods of investing in Gold (I think there is good value to be had in this at the moment) and e-gold seems to be a relatively low cost way of buying it (in terms of fees/transaction cost etc). Have a couple of questions though :-
1) Is it the most cost effective way of owning gold without having to take physical delivery of it and
2) How are gains in value taxed?, for example if the funds are reinvested in something else using the e-gold account, who do you pay the inevitable taxes to ?


----------



## Mininv

Similar to the last question (so as to keep the discussion on point) - what is the best way to buy into a gold ETF from Ireland?


----------



## walk2dewater

RiceCakes said:
			
		

> Was looking at the various methods of investing in Gold (I think there is good value to be had in this at the moment) and e-gold seems to be a relatively low cost way of buying it (in terms of fees/transaction cost etc). Have a couple of questions though :-
> 1) Is it the most cost effective way of owning gold without having to take physical delivery of it and
> 2) How are gains in value taxed?, for example if the funds are reinvested in something else using the e-gold account, who do you pay the inevitable taxes to ?


 
What's e-gold?


----------



## RiceCakes

walk2dewater said:
			
		

> What's e-gold?


http://en.wikipedia.org/wiki/E-gold 

Was that a serious question?


----------



## walk2dewater

RiceCakes said:
			
		

> http://en.wikipedia.org/wiki/E-gold
> 
> Was that a serious question?


 
yes.  I've heard of it, but not really sure was it is. Thanks for the link.


----------



## dam099

RiceCakes said:
			
		

> http://en.wikipedia.org/wiki/E-gold
> 
> Was that a serious question?


 
While the concept seems fine in theory and the idea of only dealing through gold exchangers to eliminate risk is interesting there are a few serious red flags for me in the Wikipedia piece (I know Wikipedia is not always 100% accurate so if some of these assertions are untrue apologies.)

a) That it has been struck from the Nevis register (for non payment of fees) but still states on its website that it is a Nevis company. The Nevis regulators have [broken link removed] about them because of this (and this is attributed)
Not wishing to be too uncomplimentary to Nevis but in the offshore world they are regarded as less well regulated than say Cayman/Bermuda/Channel Islands so if their regulator sees it necessary to issue a warning I'd be worried.

b) It appears unclear whether they have independent auditors

c) Concerns about its use for criminal activities and possible liabilities arising out of this

d) The irreversibility of transactions. 

If you decide you want to invest in gold to my mind there are much better ways to do it e.g. bullion, gold ETFs on recognised exchanges etc., hell even coins (which I am sceptical about as they are often overpriced to buy) seem safer to me.


----------



## phoenix_n

Interesting thread. I am no economist but great to 'listen in' on such a debate. I share W2DW concerns on P and think he may be right about gold. 

W2DW. I think your 'averaging' policy is excellent but i'd like to convert some cash into Gold. What would you suggest would be most cost effective method of doing so and in a very short timeframe.


----------



## room305

phoenix_n said:


> What would you suggest would be most cost effective method of doing so and in a very short timeframe.



The ETF GLD can be purchased cheaply through a number of low cost online brokers like Fidelity.


----------



## phoenix_n

room305 said:


> The ETF GLD can be purchased cheaply through a number of low cost online brokers like Fidelity.


 
How does thse exchange traded funds work? Also the Gold ones were not that apparent to me. (novice when it comes to etf's)


----------



## langball

phoenix, as you requested; I put some money in rabodirects mlim gold fund ... it lost a good bit of its gains in may but it on the way back up now. Theres a lot of good information collected daily by http://www.kitco.com and the guy over at http://www.gold.ie - but they are trying to get you to buy physical gold. A lot of commentators reckon that it could x4 in the event of a dollar collapse http://www.dollarcollapse.com/ - i read john rubinos book on the dollar collapse but want convinced enough to put in more than 5% of my €


----------



## room305

phoenix_n said:


> How does thse exchange traded funds work? Also the Gold ones were not that apparent to me. (novice when it comes to etf's)



An ETF passively tracks an index. I'm sure there are other threads here discussing them. GLD (Streettracks Gold) is listed on NYSE and it passively tracks the spot price of gold.

http://www.google.com/finance?q=GLD


----------



## phoenix_n

langball said:


> phoenix, as you requested; I put some money in rabodirects mlim gold fund ... it lost a good bit of its gains in may but it on the way back up now. Theres a lot of good information collected daily by http://www.kitco.com and the guy over at http://www.gold.ie - but they are trying to get you to buy physical gold. A lot of commentators reckon that it could x4 in the event of a dollar collapse http://www.dollarcollapse.com/ - i read john rubinos book on the dollar collapse but want convinced enough to put in more than 5% of my €


 
Can you provide a link. Could only find the funds. (and that rabodirect site plays havoc with my settings...the main reason why i put some funds into northern rock if i remember well)


----------



## walk2dewater

*Fed's Fisher: Inflation greatest risk to US, Aug 16, 2006*
Inflation is still the greatest risk to the U.S. economy, and policy-makers will not hesitate to raise interest rates again if incoming data shows it is necessary, Dallas Federal Reserve Bank President Richard Fisher said on Wednesday. 

"There is a definite increase in inflationary momentum," Fisher said at a luncheon by a commercial real estate group. "The Federal Reserve will not tolerate inflation," he added, terming it the Lex Luthor to the "Superman" United States economy, referring to the superhero's nemesis. Inflation "is a sinister force that has the capacity to charm and romance the heck out of you, but in the end wreaks only havoc," he said. 

http://today.reuters.com/news/artic...WBT005789_RTRUKOC_0_US-ECONOMY-FED-FISHER.xml


----------



## room305

Well W2DW was right and I was wrong. Gold didn't dip under the $600 mark on its usual Aug weakness. Moving strongly now - $635 but I wouldn't be too discouraged if you didn't buy in, you haven't missed the boat.

Sept. is gold's strongest month and it is only starting. I wouldn't be surprised if it hit $700 an ounce by month end.

[broken link removed]


----------



## joe sod

So you have discovered moneyweek.com, what do you think of it. They have been banging on about gold and silver for the last 4 years and also commodities. Do you think they are worth subscribing too. I picked up a few good company tips from them when they gave more of this info out free, however now to obtain this info you now have to subscribe. Also marc faber was another who gave out free market advice, but lately he only gives out this info if you subscribe. It seems they are now in big demand


----------



## room305

Only just came across the article so I wouldn't be sure. In 8 out of every 10 years you can buy gold in mid to late August and hold it until December for profit. This holds true even during gold bear markets.

If gold holds above the $640 level then I would say this is the real deal and a genuine rally to $750 by year end.


----------



## Guest109

just sent an email to mespil house /www.gold.ie to see what they would offer me for a mexican 50 peso gold coin i have , i tried spinks some time ago and got no reply from them, maybe these dealers just want to sell their gold


----------



## room305

Nah, most of them will buy alright. Peso's are 1.2oz coins right? Depending on the year, whether it PCGS certified and purity, I'd say it's worth anywhere between $640 - $1,400.

I'd hang to it though if I were you, be worth a lot more next year.


----------



## Guest109

well i got it given to me by a friend before she died about 10 years ago ,and to dangerous to wear nowadays so im going to sell it,mounting probably worth around 200 euros


----------



## room305

Yeah, if it's a 1947 Mexican gold 50 peso in good condition I imagine you'll get about $900 for it. If you are not in a hurry to sell it for any reason I'd hang onto it (even until the end of the month) and you'll get a better price.


----------



## walk2dewater

This guy is still free...
[broken link removed]

fyi - I now have 22% of my net worth divided b/n 3 prec metals mutual funds (denominated in a mix of currencies- no US$) and bullion.


----------



## Hibernicatio

Thought this might be of interest

[broken link removed]

Gold is undervalued, under-owned and under-appreciated. It is most assuredly not well understood by most investors. At the
beginning of the 1970’s, when gold was about to undertake its historic move from U.S. $35 per oz to over U.S. $800 per oz in the
succeeding 10 years, the same observations would have been valid. The only difference this time is that the fundamentals for
gold are actually better.


----------



## joe sod

Just been reading an article in dailywealth.com (found it browsing) *by Dr. Steve Sjuggerud and is recomending some telecoms companies. His reasnoning is that every other asset is now highly valued and therefore there are not bargains. However he says that telecoms are still hated after the dotcom boom. Some of these companies have P/E ratios of 10 and are paying dividends of 6% upwards. One of them is australian. He thinks they are not going to return to being loved again but less hated and that may result in rises from depressed levels. I know this isn't about gold but ....*


----------



## room305

I think you should open a separate thread if you want to discuss the merits of telecoms investment.

Gold is after falling heavily today. Seemed to get dragged down with a general market sell-off. Good buying opportunity IMO.


----------



## Corky

This might sound daft, but i have'nt a clue how to go about investing a few bob in gold ,it wont be much about k5 but i dont want physical gold so where do i go with this money and what form of gold do i invest in ,any advice is appreciated thank's .corky


----------



## Guest109

i tried [broken link removed] .ie nothing back from them, so i might just call in and try and get the best i can from them http://www.GOLD.IE


----------



## RiceCakes

Maybe something like bullionvault.com ?


----------



## smiley

hi corky..you should read back throught the comments on this post..we have discussed lots of gold investment options already..


----------



## walk2dewater

There goes $600, next stop $550??
http://finance.yahoo.com/q?s=GLD

The three precious metals funds that I own are actually holding up quite well.  One in particular, Sentry Select Precious Metals (CD$) is actually up over the last week or so, I think it had a large holding in Glamis (which got bought out by GoldCorp) which helped.  While the pain of correction here is severe, I think it just demonstrates the benefits of averaging into a range of precious metal/gold oriented mutual funds.  Having said that I will be a buyer of the physical if/when we see $550/oz.


----------



## room305

Being long on gold and crude and short on a lot of the main stock market indices isn't a whole lot of fun at the moment!

I think $550 an oz is a real possibility now. I think Sept 26th is when the central banks make their decision on whether to sell their gold or not. If they decide not to it could provide an impetus for a rally into Oct.

Commodities investment is not for the faint hearted anyway ...


----------



## walk2dewater

room305 said:


> Commodities investment is not for the faint hearted anyway ...


 
...but the potential returns are out of this world.

A very good friend of mine with close to 7 figures invested was down $70k last December 05, followed by making up $110k in January 06.  Can you imagine, that's most peoples gross salaries FFS.  And yet he remains FULLY invested (a la prec metals, energy, commodities) despite being well aware of pending US recession.  He's up untold %'s overall in the last 4yrs, but the ride has been far far from smooth.


----------



## room305

walk2dewater said:


> ...but the potential returns are out of this world.



Absolutely, a little volatility doesn't scare me. Your suggestion to average into such investments is well heeded.


----------



## joe sod

Its following crude oil back down. However any hint of trouble from Iran and it will shoot back up again. The speculators are waiting on the sidelines.


----------



## room305

joe sod said:


> Its following crude oil back down. However any hint of trouble from Iran and it will shoot back up again. The speculators are waiting on the sidelines.



Well it looks like Iran is willing to commit to a temporary cessation of its uranium enrichment programme.

Right now the two big movers for gold IMO, are the CPI figure to be released on Friday and what the central banks do before Sept. 26th. On average about 33 tonnes of gold are sold each month. If the 15 EGA central banks decide to meet their quota (the maximum amount of gold they can sell) it will amount to about 160 tonnes. This would severely depress the price of gold.


----------



## Mininv

Technical question for anyone who can help me. Im looking at buying a gold etf, and for currency reasons want to stick within Europe. Lyxor's etf is listed on the Euronext in Paris, and the London exchange.

Im using an online purchasing service. However, I notice its listed as a warrant in Paris, and as a stock in London.

Should this concern me? Id prefer to buy in Paris but Im afraid, as a relative novice to this game, this description of it as a warrant is worrying me.

Anyone able to enlighten me? Can I buy and sell this warrant as I would with a normal stock?


----------



## bearishbull

Mininv said:


> Technical question for anyone who can help me. Im looking at buying a gold etf, and for currency reasons want to stick within Europe. Lyxor's etf is listed on the Euronext in Paris, and the London exchange.
> 
> Im using an online purchasing service. However, I notice its listed as a warrant in Paris, and as a stock in London.
> 
> Should this concern me? Id prefer to buy in Paris but Im afraid, as a relative novice to this game, this description of it as a warrant is worrying me.
> 
> Anyone able to enlighten me? Can I buy and sell this warrant as I would with a normal stock?


Have you checked out www.gold.ie ? .im not sure of your technical question but that site may help,or someone here will let you know soon.


----------



## room305

Mininv said:


> Im using an online purchasing service. However, I notice its listed as a warrant in Paris, and as a stock in London.



Wasn't aware of this issue but I will try to find out for you.

As an aside, gold tanked pretty hard. I guess to many people assumed "this was it" and when the majority of people are optimistic, the market tends to punish them. I'm holding on but I wouldn't be surprised to see it dip to $550 or $560 from here.


----------



## joe sod

Mininv said:


> Technical question for anyone who can help me. Im looking at buying a gold etf, and for currency reasons want to stick within Europe. Lyxor's etf is listed on the Euronext in Paris, and the London exchange.
> 
> Im using an online purchasing service. However, I notice its listed as a warrant in Paris, and as a stock in London.
> 
> Should this concern me? Id prefer to buy in Paris but Im afraid, as a relative novice to this game, this description of it as a warrant is worrying me.
> 
> Anyone able to enlighten me? Can I buy and sell this warrant as I would with a normal stock?


 
Well if you are looking to buy an gold ETF what currency it is denominated in should not be of concern. You are buying gold not a currency. If you are buying gold you have to believe that the gold price in euros will be higher in the future than it is today. If you buy gold in euros, or if you buy gold in dollars does not make any difference. The gold you buy in euros will still be worth the same as the gold you buy in dollars.


----------



## walk2dewater

Keep the faith in the "stag"-(Western consumer recession)--"flation" (higher gold, higher rates) story. Peter Schiff interview below.

[broken link removed]

His recommended best strategy:
Stocks: Non-US$ denominated energy, resource, prec metals...
Cash/Debt: non-US$ cash, and gold (I would add short-term C$, CHF bonds)
Property: Non-US particularly Asian commercial property (NB: Americans call 'Asia' what we call 'SE Asia' or to use an older term The Orient, including China).

Gold and gold shares are ridicuously volatile, cf. last 2 weeks and Feb -May 2006, but the v high returns of last 2 yrs will continue.


----------



## RiceCakes

I see its under $580/oz again, very tempted to buy.
Anyone think there's further to fall in the short term?


----------



## walk2dewater

RiceCakes said:


> I see its under $580/oz again, very tempted to buy.
> Anyone think there's further to fall in the short term?


 
Anything is possible. I don't have all of my eggs in the gold basket so I can tolerate short-term losses. Cos in my view thats what a move to <$500oz would be. Short-term. You take the risk you reap the return. I believe that this time next year and the years to come, whether you bought at $740, $640, $540 or whatever will be long forgotten.  Gold will be higher in ALL fiat currencies.


----------



## fatmanknows

RiceCakes said:


> I see its under $580/oz again, very tempted to buy.
> Anyone think there's further to fall in the short term?


 
Believe now a good entry level. The Hu Hah regards Popes speech amongst the Mad Muslim world will probably increase world fear and hence gold. Personnally, I normally play Newmount (NEM) as my main play in and out of Gold - using CFD's. The UK based CMC offer a no dealing service enabling entry and exit at no cost save the finance cost on your acount balance. I also find their trading platform preyty good. (ps I ain't plugging this  crowd btw - it's just what I use)


----------



## walk2dewater

And another one, good argument with the Laffer curve guy [Im shamelessly re-posting these links from another website, which I won;t mention here ]...
http://www.europac.net/Schiff-CNBC-8-28-06_lg.asp

[Fatman, thanks for the CMC link, they look good]


----------



## RiceCakes

walk2dewater said:


> And another one, good argument with the Laffer curve guy [Im shamelessly re-posting these links from another website, which I won;t mention here ]...
> http://www.europac.net/Schiff-CNBC-8-28-06_lg.asp
> 
> [Fatman, thanks for the CMC link, they look good]



Thanks for the links guys.

w2dw that interview was fascinating to say the least, reminds me of the strong views on the housing sentiment thread here.


----------



## ivuernis

RiceCakes said:


> I see its under $580/oz again, very tempted to buy. Anyone think there's further to fall in the short term?


 
Certainly if oil continues its fall then gold will follow suit. Oil price has gone through this pattern for the last few years topping in late summer and falling roughly 15% towards year-end before picking up pace again with each year's high bigger than the previous one. There is potential for this year's drop to be greater though. Its been a quiet hurricane season and the recent deepwater find in the Gulf of Mexico has buoyed market somewhat. All things being equal I expect oil prices to rise again but there is scope for further drops in which case gold will probably follow. But, I think W2DW is right with regards to the long-term view of gold.


----------



## ivuernis

RiceCakes said:


> Thanks for the links guys.
> w2dw that interview was fascinating to say the least, reminds me of the strong views on the housing sentiment thread here.


 
That Laffer guy spouts a lot of crap. Pity Schiff shot himself in the foot towards the end of the interview with his remark about working women.


----------



## room305

RiceCakes said:


> I see its under $580/oz again, very tempted to buy.
> Anyone think there's further to fall in the short term?



We could see a rally from here, it has fallen a lot very quickly and this is a very strong month for gold - Indian wedding season and all that. However, if the sentiment among speculators has changed - they now see gold as weak - they will sell heavily into any rallies that occur. Also there is some evidence that the US dollar may be strengthening. I wouldn't be surprised to see lower prices by Christmas.

I agree with the comments here though, in five years time the idea of a $10 or $20 move in gold being in any way significant will seem laughable and even people who bought at the May peak will be deemed to have purchased when gold was cheap.


----------



## joe sod

I think the recent big correction in gold and commodities generally will ensure that the bull market in commodities will continue for a long time to come as many commentators have predicted. Just as serious money was entering the market the big correction has frightened a lot of people off them again and I think alot of people have been burned by the latest correction. These corrections will ensure that the bull market does not run out of steam.


----------



## room305

joe sod said:


> I think the recent big correction in gold and commodities generally will ensure that the bull market in commodities will continue for a long time to come as many commentators have predicted. Just as serious money was entering the market the big correction has frightened a lot of people off them again and I think alot of people have been burned by the latest correction. These corrections will ensure that the bull market does not run out of steam.



You are making some big assumptions about global growth next year. As far as I can see the US seems to be headed for a recession. That will have knock effects for commodity prices.

I would average in from here and view gold as a longterm investment (at least five years). Although if it dips below $500 at any stage I'll happily buy as much as I can get my hands on.


----------



## RiceCakes

http://news.goldseek.com/GoldSeek/1158596197.php

_[FONT=Arial, Verdana, Helvetica, sans-serif]Only 1% of China’s $954 billion of foreign currency reserves are held in the yellow metal.<snip>[/FONT][FONT=Arial, Verdana, Helvetica, sans-serif]
With pressure mounting on Beijing to revalue it yuan upwards, China could quietly build a gold position in a declining market. Fan Gang, a member of China’s central bank monetary policy committee said on August 29th, "The US dollar is no longer a stable anchor in the global financial system, nor is it likely to become one, therefore it is time to look for alternatives.”[/FONT]_[FONT=Arial, Verdana, Helvetica, sans-serif]

A fascinating article that touches on many other areas but this little tidbit about gold prices really grabbed my attention, surely China possibly wanting to start buying has to lead to long term price growth alone?
[/FONT]


----------



## room305

RiceCakes said:


> [FONT=Arial, Verdana, Helvetica, sans-serif]A fascinating article that touches on many other areas but this little tidbit about gold prices really grabbed my attention, surely China possibly wanting to start buying has to lead to long term price growth alone?
> [/FONT]



Yes but do they plan to actually start buying or are they just mouthing off to get the US off their back about revaluing their currency (or imposing a 23% import tariff on Chinese goods)?

China holds so many US dollar reserves that it would be tough to dump even a fraction of them on the open market without seriously weakening the dollar and greatly devaluing the remainder.


----------



## RiceCakes

room305 said:


> Yes but do they plan to actually start buying or are they just mouthing off to get the US off their back about revaluing their currency (or imposing a 23% import tariff on Chinese goods)?
> 
> China holds so many US dollar reserves that it would be tough to dump even a fraction of them on the open market without seriously weakening the dollar and greatly devaluing the remainder.



True, but they don't have to buy any more dollars either, just by holding the current position and buying gold to meet the dollar loss of value would be enough given the huge sums here?


----------



## room305

RiceCakes said:


> True, but they don't have to buy any more dollars either, just by holding the current position and buying gold to meet the dollar loss of value would be enough given the huge sums here?



I'd be surprised if they do but I guess anything is possible. Personally I think the US dollar will strengthen in the months to come. Central banks get very nervous when the dollar weakens rather than when it strengthens. Beyond vague threats I cannot see any CB operating in a manner that could be fatal for the dollar.

Eventually though (and this is why I am bullish on gold) the US's profligate spending and massive trade imbalance will catch up with it. It mightn't necessarily be the end of the dollar but a currency crisis of some sort is inevitable. Then we'll be talking about gold in thousands of dollars rather than hundreds.

Chris Laird's article on the same was very persuasive and his track record on predicting the movement of gold is second to none:

http://www.kitco.com/ind/laird/sep142006.html


----------



## RiceCakes

room305 said:


> Chris Laird's article on the same was very persuasive and his track record on predicting the movement of gold is second to none:
> 
> http://www.kitco.com/ind/laird/sep142006.html



Back the truck up time ?


----------



## room305

RiceCakes said:


> Back the truck up time ?



I'm averaging in by small amounts on a weekly basis irrespective of price, aiming to be nearly fully invested in gold and gold shares by Christmas (about 30% of my total investments).


----------



## walk2dewater

Hi R305, the good thing about averaging in, is you can average out as well.  Trim a little here and there when your market value exceeds book value, you'll have to do that anyway to maintain a 30% exposure.


----------



## room305

Good idea, W2DW, cheers!


----------



## smiley

yes..i am adding more gold also..the 200 day moving average is on a nice upward trend..

you have to wonder about Chris Laird though..when he thinks that gold could reach $50,000 an ounce in the future...this is surely mad?


----------



## room305

smiley said:


> you have to wonder about Chris Laird though..when he thinks that gold could reach $50,000 an ounce in the future...this is surely mad?



Not necessarily. However, in his scenario, those dollars would be seriously devalued from their present level.


----------



## ivuernis

room305 said:


> in his scenario, those dollars would be seriously devalued from their present level.


Reminds me of a funny line I read the other day:

_"I have a complaint about $ bills: they are too small and not sufficiently absorbent for the role they are being prepared for: toilet paper."_


----------



## Mininv

joe sod said:


> Well if you are looking to buy an gold ETF what currency it is denominated in should not be of concern. You are buying gold not a currency. If you are buying gold you have to believe that the gold price in euros will be higher in the future than it is today. If you buy gold in euros, or if you buy gold in dollars does not make any difference. The gold you buy in euros will still be worth the same as the gold you buy in dollars.


 

That seems to make sense alright. But if the ETF is priced in dollars but bought with euros, would a collapse in the dollar not mean you sell the fund at the dollar rate, effectively losing on transferring it back into euros?

Or should the increase in gold (if it comes) make up the difference in the decrease?

Sorry for the stupid questions but I tend to try and avoid mixing currencies as much as possible so I'm wary of making a basic error in buying a dollar-denominated fund.


----------



## phoenix_n

Saw a piece on CNN last night where the analyst said that Gold was on a bit of a J curve and that he expected prices to fall by 30% in the next few months.


----------



## room305

phoenix_n said:


> Saw a piece on CNN last night where the analyst said that Gold was on a bit of a J curve and that he expeced prices to fall by 30% in the next few months.



Wouldn't surprise me.


----------



## diarmuidc

walk2dewater said:


> Hi R305, the good thing about averaging in, is you can average out as well.




sidelining a bit here but what's the point in averaging in? I know the theory is to reduce the effect of any downturns HOWEVER if you accept the fact (maybe not in gold) that the market goes up on average 2 days for each day it goes down, then it makes more sense to go all in at the start?


----------



## room305

If you went all in and bought gold at the May peak of $730 an ounce, it mightn't feel like the best decision you ever made as you watched it slide to $550 an ounce in the following months.


----------



## baby_tooth

diarmuidc said:


> sidelining a bit here but what's the point in averaging in? I know the theory is to reduce the effect of any downturns HOWEVER if you accept the fact (maybe not in gold) that the market goes up on average 2 days for each day it goes down, then it makes more sense to go all in at the start?


 

first you'd have to look at the daily up to the daily down.

say it rises for 2 days to one day down, but rises at 5% and drops at 20%.

markets drop quikcer than they rise, all other things bieng equal, the herd.
mentality.

the nominal value of gold will always rise, so 50k an ounce is entirly plausible....

averaging in is more of a play on the mid term average rising....


----------



## genki33

Given that most reports indicate that gold would rise on a dollar collapse, would those of us in euroland be better off buying into a euro denominated gold stock?
Or would it matter?
Thanks for any replies.


----------



## jpd

I suspect that the rise in gold will be offset by the fall in the dollar. After all, why should gold priced in euros change just because the dollar is depreciating.


----------



## mallow

I understand that the ETF's don't have a currency risk but I bought into a certain gold mining fund through Rabobank. Have now realized its base currency is dollars (although Rabo's website is confusing me on this!) Am I right in thinking that means that when the dollar falls, even if the mining companies do well, I could lose any gain when selling and converting back to Euros?


----------



## fatmanknows

mallow said:


> I understand that the ETF's don't have a currency risk but I bought into a certain gold mining fund through Rabobank. Have now realized its base currency is dollars (although Rabo's website is confusing me on this!) Am I right in thinking that means that when the dollar falls, even if the mining companies do well, I could lose any gain when selling and converting back to Euros?


 
There is a general  inverse correlation with gold and the $. When the $ weakens gold generally has a compensating increase. Likewise with oil at present  - there is positive type correlation - as oil falls there is a somewhat positive correlating downward pressure on gold. As with all markets there is a mix of variables that pull it one way or the other. Investing was never supposed to be easy  -


----------



## walk2dewater

genki33 said:


> Given that most reports indicate that gold would rise on a dollar collapse, would those of us in euroland be better off buying into a euro denominated gold stock?
> Or would it matter?
> Thanks for any replies.


 


jpd said:


> I suspect that the rise in gold will be offset by the fall in the dollar. After all, why should gold priced in euros change just because the dollar is depreciating.


 


mallow said:


> I understand that the ETF's don't have a currency risk but I bought into a certain gold mining fund through Rabobank. Have now realized its base currency is dollars (although Rabo's website is confusing me on this!) Am I right in thinking that means that when the dollar falls, even if the mining companies do well, I could lose any gain when selling and converting back to Euros?


 
A US$ crisis (e.g. Asians/China/OPEC sell off their hoard of US bonds) will cause gold to do a moonshot against all paper currencies, and that is the main reason for betting on gold at this point. It is a valid point, made and commented on earlier in the thread, that US$ weakness will at least initially be reflected in a lower rate against the €. But this difference would be far outweighted by the accompanying spike in gold.

Furthermore, gold has been an historical hedge against inflation. Do your own websearch to prove this. If you believe true general price inflation is higher than official figures then you should buy gold. Gold is the ultimate safehaven. [so then why is gold tanking at the moment? short answer: the herd is treating gold like a commodity. I don't think gold will be $580/oz for long]

Anyone interested in investing in this asset should read this
http://en.wikipedia.org/wiki/XAU#Gold.27s_value_versus_money_supply


----------



## plaudit

Hi guys, what do ye think about a carry trade shorting right now XAU/USD? It pays ~4.3% interest without leverage. I trade a lot of currencies but I am scared sh!tless of gold.


----------



## walk2dewater

plaudit said:


> Hi guys, what do ye think about a carry trade shorting right now XAU/USD? It pays ~4.3% interest without leverage. I trade a lot of currencies but I am scared sh!tless of gold.


 
explain please?


----------



## plaudit

walk2dewater said:


> explain please?


 
If I think the price of gold is going to remain below the current price I get ~4.3% on my open position, because holding gold pays 0% and holding dollars pays 5%, so less spreads is about ~4.3%. Leveraged at say 10:1 I would get 43% interest as long as gold stays below the current price which is 589.4. Of course if it goes up I get blown out, but if goes down I clean up.


----------



## walk2dewater

plaudit said:


> If I think the price of gold is going to remain below the current price I get ~4.3% on my open position, because holding gold pays 0% and holding dollars pays 5%, so less spreads is about ~4.3%. Leveraged at say 10:1 I would get 43% interest as long as gold stays below the current price which is 589.4. Of course if it goes up I get blown out, but if goes down I clean up.


 
interesting.  Who's selling this?


----------



## plaudit

www.oanda.com


----------



## mallow

Thanks for the explanations...So the dollar should fall against gold but not so much against the Euro.  

BTW don't worry about my ignorance, I only put €100 in!!  Is a relatively stress free learning process


----------



## sunrock

i bought a 1 oz gold panda coin in 1986  for 350 us dollars in new york on the advice of a russian immigrant who was using up all his savings  to buy coins every month or so 
i send the money order off to the address and after a week or so the gold coin came in a package to my address a cheap lodgings house
no doubt if anyone in my shared house knew it had a gold coin it would probably have been taken
very nice and shiny it was too and 4 safety it got sellotaped under some furniture
the russian was using the gold as a trust fund 4 his young son convinced its value would increase steadily over the years
i sold the gold coin in 1987 on a visit to monteovideo for 450 us_the best offer
ever since gold was delinked from currencies it is not backed by any major or maybe even minor currency
its major use is jewelry  
also it has its uses for refugees fleeing lands with worthless local currencies
producers of gold and traders have a vested interest in talking up the future price of gold   also the dealers and writers/analysts/economists that write about gold are usually forecasting a future big jump in the price of gold because there is some coming crisis  or big currency risk
the russian man made a very bad invest ment  seduced by the sales talk of capital appreciation
even allowing 4 the fact coins have some extra value  he would have been better in the stock market or deposit interest or housing
also gold has storage cost
no doubt some investors will make money in gold funds as traders anticipate the movements of gold as it flucuates up and down against various currencies
does anyone seriously think that any major currency will lose its purchasing power within its own borders 
the central banks have all the tools at their disposal such as interest rates and control of the money supply
of course gold can exist alongside cash  but its not getting any interest or dividends just the lure of some big capital appreciation in the future
just some thoughts


----------



## walk2dewater

sunrock said:


> the central banks have all the tools at their disposal such as interest rates and control of the money supply
> of course gold can exist alongside cash but its not getting any interest or dividends just the lure of some big capital appreciation in the future
> just some thoughts


 
Thanks for that. Here's my thoughts:

I bought Nortel at C$20 in 2001, after it had reached C$125 in 1999-2000. I thought I had a nice bargain. It went to C$2 and I sold it for C$3. Return is what you get for taking risk, risk means sometimes you lose. My view is that gold is due massive appreciation because of the excessive printing of dollars, euros etc. This is the risk I am willing to take [see earlier in thread]

And yes, gold doesnt pay interest (reason for holding bonds/debt) and doesnt pay out dividends (main reason for holding shares). Gold IMHO is a 'currency' and by buying it you are playing a currency spec trade.

Finally I disagree that the CBs have control. If you think the CBs are still fully in control then you probably think houses are miraclously "worth" more than they were in 2001. CBs made a serious boo-boo with real negative rates at the start of this decade. Take a look at M3 and M4 growth since 2000/01, it is truly astounding how debased the paper in your pocket has become. 2007 is going to be a very interesting year; can't wait to see how the Fed/ECB is going to wriggle out of this mess.


----------



## joe sod

plaudit said:


> Hi guys, what do ye think about a carry trade shorting right now XAU/USD? It pays ~4.3% interest without leverage. I trade a lot of currencies but I am scared sh!tless of gold.


 
If you are so scared of gold why are you betting on it staying below $589. You should be scared because as you say if it goes the other way you get wiped out. The run up on gold in the last few years has killed alot of short sellers because just when they think that gold is returning to its bear market, it does the opposite and they get screwed. If you believe in the commodities story then you should also be in gold if not then you should not be in it. I think gold is alot safer bet then trying to back individual commodities because the bull market will switch from one commodity to the next but gold will be there the whole way through. I for one also believe that the only way out of the financial crisis alot of western countries are in with excessive debts and huge mortgages is to allow inflation to rise alot thereby reducing the real value of the debt to be repaid. I think that the dollar will be allowed to fall in value and the euro and yen will have to fall with it in order for them to stay competitive although not by as much. I think inflation is the lesser evil than deflation and inflation is what we will get. In that scenario gold and commodities are the only game in town.


----------



## plaudit

I hold no position in gold at the moment, nor have I in the past. However I am contemplating opening a small short position and if goes against me cut my loss but if it continues to fall then I continue to scale in setting my stop losses so that I close at break even if it goes against me. The idea being to build up a nice juicy carry trade. 

The problem is deciding when to get in!


----------



## ClubMan

Apologies if somebody posted this before but I'm just dipping in here and thought that this was apposite:


> [Warren] Buffett emphasized the non-productive aspect of gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."


----------



## Guest109

gold always was very volitile wish i had got rid of my cion ages ago but i will hold off until after christmas  yo ho ho  santa


----------



## ClubMan

Cion?


----------



## joe sod

Yes its true gold has little utility. However its value originates from the fact that for hundreds of years it was the bedrock of the world's monetary system. Of course today the world's monetary system is not backed by gold. If you believe that today the worlds monetary system now not backed by gold but by the american dollar is rock solid then gold is out. If you believe the opposite that it is not rock solid then gold is in. The rise in the price of gold over the last 5 years mean that more and more people are not confident in the worlds monetary system and are buying gold. warren buffet has been known to say things at times and then ten twenty years later he changes his mind. I think he made this quote in the 1980s when the worlds monetary system was very solid and many more people believed in the strength of the american dollar, however this is not valid today. Also it is well known that when silver hit the bottom of its bear market in 1998 Warren Buffet bought a huge quantity I think 11 million ounces the maximum he could legally buy. In the 1980s Warren buffet also said that owning a newspaper was a rock solid investment, today with the power of the internet he has changed his mind.


----------



## whathome

joe sod said:


> In the 1980s Warren buffet also said that owning a newspaper was a rock solid investment.


 
Are you sure?  I don't think he's ever referred to anything as a rock solid investment.  Can you tell us where you heard this?


----------



## sunrock

this idea of an  increase in money supply  as in m3 and m4 has got me thinking
is this the printing presses in action printing more dollar euros etc
who controls all this
how is it monitored
are the public informed of all the amounts and times
presumably the central banks are involved?
the point is with cheap goods flooding in from china and cheap farm produce from abroad _prices in the shops show low inflation
of course the increase in money supply is justified by this low inflation
nevertheless the money has to go somewhere_hence high property prices
i guess what im asking is could anyone shed more light on this process


----------



## smiley

hi sunrock....you should really discuss that in a different thread


----------



## smiley

I was watching the one and only eddie hobbs last night..he seemed to be quite positive about the gold story. Interesting to see it get such a mention.


----------



## joe sod

"Are you sure? I don't think he's ever referred to anything as a rock solid investment. Can you tell us where you heard this?"

He was referring to the newspaper he owned in the 1980s "The Washington Post" and the fact that it was a solid investment which at the time he said would always be solid. However a few years ago he stated even though he still owns it I think, that newspapers like the washington post were no longer a rock solid investment. What I was really referring to was the fact that just because Warren Buffet says something at one period in time does not mean that it is set in stone and that he changes his mind with changing circumstances.

I also watched Eddie Hobbs last night, however I don't think his audience would be able for the volatility in gold and commodities, what would they have done in the last few months with the big correction in gold and commodities.


----------



## room305

joe sod said:


> I also watched Eddie Hobbs last night, however I don't think his audience would be able for the volatility in gold and commodities, what would they have done in the last few months with the big correction in gold and commodities.



Didn't see the show due to not having a TV but I would be interested in knowing how Eddie Hobbs advised people to buy into gold - e.g. coins, bullion, etf's ...


----------



## ivuernis

room305 said:


> Didn't see the show due to not having a TV but I would be interested in knowing how Eddie Hobbs advised people to buy into gold - e.g. coins, bullion, etf's ...


 
ETFs mainly. TBH it was a general section on investing in commodities as he also mentioned many other metals... and uranium also. 

You wonder though is this too late in the bull run for many as unless you're in gold and metals for the long haul (like some here) many of these commods may be see a correction in the short term if oil continues its slide or doesn't go back up for a while and stocks keep rising as a result, i.e. why wasn't Eddie advising all this a few years back instead of now when there is a chance the small investor could get burnt in metals in the short to medium term, although he did warn that they were volatile so be warned.


----------



## room305

ivuernis said:


> You wonder though is this too late in the bull run for many as unless you're in gold and metals for the long haul (like some here) many of these commods may be see a correction in the short term if oil continues its slide or doesn't go back up for a while and stocks keep rising as a result, i.e. why wasn't Eddie advising all this a few years back instead of now when there is a chance the small investor could get burnt in metals in the short to medium term.



Not that I don't think Eddie Hobbs gives crap advice - I've read that he suggests getting your mortgage in US dollars - but I'm accumulating gold at these prices and will continue to do so even with further falls.

If you're buying now and maybe hoping to cash in Dec then there is every chance you will get burnt. Much less so if your timeframe is 3 to 5 years.

The stage is looking set for the Fed to slash interest rates before December. Perhaps 2007 will deliver another inflated bubble and another debt driven escape for the Fed.


----------



## ivuernis

Not on-topic but don't want to start a new thread and as gold is an inflation hedge this is prob the best place to put it.... 

Does anyone here follow the musings over at iTulip.com, specifically their "Ka-Poom" theory of dis-inflation (Ka) followed by massive inflation (Poom).


----------



## darex

room305 said:


> Not that I don't think Eddie Hobbs gives crap advice - I've read that he suggests getting your mortgage in US dollars.



Didn't know you can do this. Is it really a practical option? Probably would be a very good option:

a) US dollar likely to depreciate
b) Could get a fixed for a full term of the mortagage at reasonable rates


----------



## conor_mc

darex said:


> Didn't know you can do this. Is it really a practical option? Probably would be a very good option:
> 
> a) US dollar likely to depreciate
> b) Could get a fixed for a full term of the mortagage at reasonable rates


 
a) is in the short/medium term
b) is long-term

Seriously, its rubbish advice given in what was the current situation at the time of €1:$1.30 last year.

Possibly suitable for large corporations etc, put just plain daft for your average Irish property owner who can barely withstand a 1% interest rate rise from historically low levels, never mind the volatility of the currency markets over the course of 20+ years!


----------



## darex

conor_mc said:


> a) is in the short/medium term
> b) is long-term
> 
> Seriously, its rubbish advice given in what was the current situation at the time of €1:$1.30 last year.
> 
> Possibly suitable for large corporations etc, put just plain daft for your average Irish property owner who can barely withstand a 1% interest rate rise from historically low levels, never mind the volatility of the currency markets over the course of 20+ years!



Agree that it is a significant risk and as such probably not suitable for the average punter, but nevertheless its a risk that could pay off very handsomely.

How long do you think the imbalances are likely to take to unwind? - probably many years with the dollar drifting down all that time. Once the imbalances finally unwind move the mortage back into Euros - You could easily knock 30-40 percent off the mortgage and have the safety of a long term fixed rate to boot


----------



## conor_mc

darex said:


> Agree that it is a significant risk and as such probably not suitable for the average punter, but nevertheless its a risk that could pay off very handsomely.
> 
> How long do you think the imbalances are likely to take to unwind? - probably many years with the dollar drifting down all that time. Once the imbalances finally unwind move the mortage back into Euros - You could easily knock 30-40 percent off the mortgage and have the safety of a long term fixed rate to boot


 
Fair enough - you obviously recognise that the risk/reward on this is pretty high. It could pay off, but you'd want to be pretty sophisticated financially to manage this scheme.

I doubt very many of Eddie's fans fall into this category tbh.


----------



## smiley

interesting read in todays finanicial times...

Germany’s Bundesbank said it does not plan to sell any gold from its reserves for a third year...

http://www.ft.com/cms/s/15eeae1a-5493-11db-901f-0000779e2340.html

good to hear!


----------



## whathome

From the Telegraph:

*Bank of France blamed for gold sell off*

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/10/05/bcngoldselloff05.xml



> Central banks may have dumped far more gold on the markets over the last three weeks than officially reported, accounting for the sudden plunge in prices that has stunned investors.


----------



## Duplex

Is there absolutely nothing new under the sun? An article on Swifts campaign against debasement and inflation.  

[broken link removed]


----------



## joe sod

Id say the downward pressure on gold prices has run its course and that there is more upside than downside towards christmas. Maybe it the turn of share prices to suffer a large correction after the big upswing over the last month


----------



## walk2dewater

Yesterday and today converted 3.4% of my portfolio to gold via the ETF 'GLD'.  About 11% now in bullion (ETF and physical).

US$570 not a bad price IMHO.

Anyone else being helping themselves to some <US$600 gold???
Anyone found any interesting analysis to share????


----------



## room305

Looking to buy some more physical gold. Gold shares seem attractively priced as well.

The see-saws in the rally are getting narrower and gold has struggled to get over the $600 mark. It could swing either way. I'm not expending all my money on it in case it breaks lower (say sub-$550) but it's hard to resist such an attractive price.

Long term these prices are going to look like daylight robbery. I can't remember the analyst but I do remember the quote:

"The price of gold will end the decade with three trailing zeroes. The big question is - what's the number in front going to be?"


----------



## joe sod

The gold.ie website is an excellent website with interseting articles from all over the world. One I was just reading from George Soros saying he fears an energy crisis, increased violence and a global financial crisis, the catalyst for all this he says is america's disastrous war on terror.


----------



## room305

Soros is probably right. The most indebted nation on Earth is in the process of taking on even more debt to fight an impossible war. Eventually somebody is going to shout stop (i.e. China's appetite for monstrous amounts of U.S. debt will wane).

As Biller Bonner puts it:



> [FONT=Arial, Verdana, Helvetica, sans-serif]Many empires have come and gone since man first stood on two legs. None, as far as we know, ever went in such an absurd way as this, floundering in a war against nobody, financed with money it doesn't have.


[/FONT]


----------



## conor_mc

room305 said:


> Looking to buy some more physical gold. Gold shares seem attractively priced as well.
> 
> The see-saws in the rally are getting narrower and gold has struggled to get over the $600 mark. It could swing either way. I'm not expending all my money on it in case it breaks lower (say sub-$550) but it's hard to resist such an attractive price.
> 
> Long term these prices are going to look like daylight robbery. I can't remember the analyst but I do remember the quote:
> 
> "The price of gold will end the decade with three trailing zeroes. The big question is - what's the number in front going to be?"


 
Interesting thread this, but there are a few things I don't get. We're taking about gold priced in USD, and that a USD currency crisis could send gold prices to several thousand dollars an ounce. But if gold is a currency in itself, and there's no fundamental issue with the euro, wouldn't that mean that gold:eur would stay relatively stable, albeit prices would rise due to rising demand.

Are we looking at a situation whereby €600 gold today could be worth, say, $5000/€1000 in a few years time because the USD has tanked against gold and the euro together?


----------



## walk2dewater

conor_mc said:


> Are we looking at a situation whereby €600 gold today could be worth, say, $5000/€1000 in a few years time because the USD has tanked against gold and the euro together?


 
This issue has been covered earlier in the thread. I’ll summarise for you:

Gold is a ‘currency’, albeit a unique one. Personally, I count it (bullion anyway) as part of my range of cash/currency type holdings. To me a 20gram Credit Suisse bullion bar in my pocket is same as €300.

Yes, the big bet is a severe decline in the US$ but the bet really extends to all fiat currencies. People who fear for the purchasing power of their €, US$ or £ income stream are buying gold. People who see overvaluation in traditional assets [stores of wealth] are converting those assets to gold.

For people earning and living in Euros, yes you are betting on the situation you describe; gold rising in euros. However, my belief is that gold will rise against all fiat currencies. E.g. I doubt we’d see €0.20 to the US$, that would be absolute economic chaos unless it happened over many decades in a controlled fashion. Maybe we’ll see €0.50 in our lifetimes, but even at that there would be severe problems.

The bottom line is you always want to own assets that are rising in value vis a vis other assets. Residential property values just about everywhere are wildly exaggerated on virtually any basis and should, at minimum, slowly decline in value from here vis a vis other assets. Same can be said for stocks generally. Bonds, again generally, look like poor value since CB rates are going much higher [despite the fact that they’ll have less effect since its cost-push inflation and inflation expectations have already taken off.]

What’s left then is gold and prec metals, energy of all types incl renewables, base metals, and agricultural commodities, all of which are STILL historically cheap compared to the assets mentioned above.


----------



## conor_mc

Thanks w2dw, wasn't suggesting €0.20 to the dollar as such, just throwing out the numbers to illustrate the question. Much of what I've read has been American and therefore $-specific.

So I guess it comes down to the first of the two constants in investment psychology.... fear and greed.


----------



## walk2dewater

conor_mc said:


> So I guess it comes down to the first of the two constants in investment psychology.... fear and greed.


 
You could say that.  But investing successfully takes the Grande Cajones of threading the line between the two extremes.  Personally I'd like to think that I am invunerable to the primitive whims of fear and greed  in my pursuit of VALUE


----------



## Joe Nonety

Why did Eddie Hobbs say gold was a good hedge fund against share prices?
From Jan 2000 to Jan 2002 gold prices fell as did shares, while since then it's more than doubled similiar to the ISEQ index.
Ok, gold didn't fall as much as most shares did during the dot com crash but still, going by his theory you'd expect it to have risen.


----------



## smiley

Joe Nonety said:


> Why did Eddie Hobbs say gold was a good hedge fund against share prices?


 
Did he say that? I think you may be mis-quoting him?

i think he said it was a hedge against devaluation of a currency and rising inflation etc?


----------



## joe sod

walk2dewater said:


> This issue has been covered earlier in the thread. I’ll summarise for you:
> 
> Gold is a ‘currency’, albeit a unique one. Personally, I count it (bullion anyway) as part of my range of cash/currency type holdings. To me a 20gram Credit Suisse bullion bar in my pocket is same as €300.
> 
> Yes, the big bet is a severe decline in the US$ but the bet really extends to all fiat currencies. People who fear for the purchasing power of their €, US$ or £ income stream are buying gold. People who see overvaluation in traditional assets [stores of wealth] are converting those assets to gold.
> 
> For people earning and living in Euros, yes you are betting on the situation you describe; gold rising in euros. However, my belief is that gold will rise against all fiat currencies. E.g. I doubt we’d see €0.20 to the US$, that would be absolute economic chaos unless it happened over many decades in a controlled fashion. Maybe we’ll see €0.50 in our lifetimes, but even at that there would be severe problems.
> 
> The bottom line is you always want to own assets that are rising in value vis a vis other assets. Residential property values just about everywhere are wildly exaggerated on virtually any basis and should, at minimum, slowly decline in value from here vis a vis other assets. Same can be said for stocks generally. Bonds, again generally, look like poor value since CB rates are going much higher [despite the fact that they’ll have less effect since its cost-push inflation and inflation expectations have already taken off.]
> 
> What’s left then is gold and prec metals, energy of all types incl renewables, base metals, and agricultural commodities, all of which are STILL historically cheap compared to the assets mentioned above.


 
I think this is a very important point. If confidence in the dollar is badly hit and it falls then the euro and sterling and the yen will fall with it. This is because the dollar is now the world's reserve currency. Gold used to be the worlds reserve currency but over the last 40 years it has steadily been replaced by the dollar as central banks around the world have gradually reduced the amount of gold they hold in favour of paper currencies. The bank of england famously sold off a huge chunk of their gold in 2001 at $270 an ounce just as gold was hitting the bottom of its bear market. Therefore I think the pound could suffer more than the dollar in the short term especially as North Sea oil is declining dramatically. At the same time oil and resource rich countries like russia have been increasing their gold holdings. Therefore it is not the euro or sterling you should be turning to in the case of a dollar fall but the russian rouble, some of the asian countries and just holding gold itself. I read an article which said that gold always goes to where the wealth is being generated. Now gold is leaving western countries and is going to russia and asia.


----------



## walk2dewater

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1C983MFcQoE&refer=home#

nice positive comment on gold.


----------



## niceone

I would like to purchase Gold and will be doing so for the first time.  Anyone suggest an Irish broker ?


----------



## niceone

more to the point, I would like to purchase Gold the same way as I have purchased shares.  I don't want physical gold, I don't way to store gold, I want to be able to sell as quickly as you can a share cert


----------



## walk2dewater

niceone said:


> more to the point, I would like to purchase Gold the same way as I have purchased shares. I don't want physical gold, I don't way to store gold, I want to be able to sell as quickly as you can a share cert


 
"GLD" trades on US exchanges, "IGT" trades in Toronto, and theres one in London by Lyxor (symbol escapes me at the mo)


----------



## plaudit

If gold goes much higher I think I will start shorting it for the carry interest. Leveraged at 25:1, scale in at 20% chunks over an extended period, depending what way it goes. I'm not around next week but I'll see the week after where its at.


----------



## room305

plaudit said:


> If gold goes much higher I think I will start shorting it for the carry interest. Leveraged at 25:1, scale in at 20% chunks over an extended period, depending what way it goes. I'm not around next week but I'll see the week after where its at.



Brave move. I know traders who think it is headed for $1000 oz by year end. Doubt it myself but keep your stops tight.


----------



## sunrock

niceone said:


> more to the point, I would like to purchase Gold the same way as I have purchased shares. I don't want physical gold, I don't way to store gold, I want to be able to sell as quickly as you can a share cert


 
Why not get real physical gold?
No storage costs and easy to hide somewhere in the house or garden.
Gold is touted as safe in some future financial crisis or even meltdown.
I for one would not like to wave my gold shares for redemption at some bank or trading house in this financial crisis scenario. 
In such a chaotic situation there would be such greed that one would most likely be holding worthless paper. 
And it is very nice to have nice shiny gold coins with nice designs to hoard and feel and count. 
Yes. Very comforting indeed.


----------



## Guest109

"And it is very nice to have nice shiny gold coins with nice designs to hoard and feel and count. 
Yes. Very comforting indeed."

well i have some very nice shiney gold coins,trouble is none of the gold dealers seems to be interested as i have emailed  main ones and still waiting on an answer


----------



## Eurofan

www.gold.ie should be happy to deal with your coins.


----------



## Guest109

(www.gold.ie should be happy to deal with your coins.)

tried them 6 weeks ago still no reply


----------



## room305

ainya said:


> tried them 6 weeks ago still no reply



Why not ring them or call into them - they are based in Fitzwilliam Square. Perhaps your coins aren't worth much or you haven't provided sufficient detail. An email mentioning you have several shiny gold coins is likely to be ignored.

Alternatively, take some snaps and sell them on ebay.


----------



## walk2dewater

[broken link removed]

nice article on gold.


----------



## smiley

and another one here!
http://www.ft.com/cms/s/ec0bdc54-6f53-11db-ab7b-0000779e2340.html

i will be very interested in seeing tomorrows closing price on gold...will probably have the first weekly breakout (based on 12 weeks) in quite a while...


----------



## Hibernicatio

Do posters think the recent reversal of power in the America will have any effect on future gold prices or is the situation too far gone at this stage to have any real impact.

I been painfully watching the price of gold going up this past few weeks as I have researched it quite a bit about it and believe it is definitely a good investment going forward.

Funds to buy is the problem and am praying that our sale agreed property in Dublin can move forward without any delays.  It is only then that I could put any significant amount of money in.  

Expect to close in four/five weeks but just watching the price going up daily (I know it can also come down!) is pretty frustrating.

In the meantime I can only prepare.  Do posters know of any good online brokers (In Ireland or outside) where I can purchase ETF's but also trade in equities.


----------



## walk2dewater

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/10/cnchina10.xml

Oh boy!


----------



## walk2dewater

Gold up, US$ down...
[broken link removed]
see the 4:50pm segment


----------



## somerset

[broken link removed]

... interesting gold article... 

...not sure I would be keen to invest against this background

....any opinions,?


----------



## JumpShot

Any opinions.....

No, I expect you to die, Mr Bond

(good article)


----------



## Howitzer

somerset said:


> [broken link removed]
> 
> ... interesting gold article...
> 
> ...not sure I would be keen to invest against this background
> 
> ....any opinions,?


 
Very intriguing article. The price of Base metals is possibly being undermined for political reasons. I have to say that I'd be more in inclined to consider investing in Base metals now. Markets can only be manipulated for so long before fundamentals assert themselves, usually with a bang. I'm sure George Sorros would agree.


----------



## smiley

Gold has finally had its first weekly breakout (12 week) since the collapse in May...the 200 day moving is now moving up...and the weekly breakout is above the 200 day average.............so the long term trend is up


----------



## abakan

Hi,

Just a quick question  - I have been lookin into buying gold coins prob from gold.ie - i think their the easiest to get gold from in Ireland - still up for opnions on that though

But my question is when I want to sell the coins - is there a big market in Ireland for the coins that people will want to buy the coins right away. Thats my only worry to having physical gold coins


----------



## Guest109

i been trying to get rid of a few gold coins lately tried Spinks  london and Mespil House Dublin never got a reply, seem they want to sell not buy
so it would put me off buying coins and such


----------



## room305

abakan said:


> But my question is when I want to sell the coins - is there a big market in Ireland for the coins that people will want to buy the coins right away. Thats my only worry to having physical gold coins



Assuming you are buying bullion coins I thought it would be pretty easy to sell them. In fact, is it not possible to simply Fedex the coins to gold.ie and they ring you upon receipt with an offer price based on the current spot price?

I'd ring them and see. Either bullion coins are probably the most liquid physical gold asset. If selling is a really big issue you could consider investing in a gold etf so selling will not be an issue.


----------



## abakan

ye im currently looking to buy EFT's through interactivebrokers (had to put down incorrect trading figures when applying - they wouldn accept my trading histoey)- but id like to get my hands on some physical gold - but i dont want to have problems selling it on when the time comes

What happens if I want to sell physical gold at the some time as everybody else -then im stuck with it

whereas EFT's you can get market value whenever you want to sell. I know there are pro's and con's with both methods


----------



## walk2dewater

You'd think I worked for DB...

http://www.bloomberg.com/apps/news?pid=20601109&sid=a5UuCc0L6nt4&refer=home


----------



## baby_tooth

don't suppose anyone has any data on gold prices to say us inflation from '75 onwards.

want to do an econometric analysis on this,...what do you all think about, say:

gold = a + b.inflation + c.inflation(t-1) + d.gold (t-1) + oil + sp500 + error

anyone have any suggestions on this....or data to work through on it!....

will share results obviously.!


----------



## ivuernis

baby_tooth said:


> don't suppose anyone has any data on gold prices to say us inflation from '75 onwards.


 
What Gold Bubble...





baby_tooth said:


> want to do an econometric analysis on this,...what do you all think about, say:
> 
> gold = a + b.inflation + c.inflation(t-1) + d.gold (t-1) + oil + sp500 + error
> 
> anyone have any suggestions on this....or data to work through on it!....
> 
> will share results obviously.!


 
It's too late and I've drunk too much La Chouffe for any suggestions of mine... might be easier to google as much as you can first, there's bound to be something done already along a similar vein, save yourself some time and effort.


----------



## smiley

i think some of that information is available from the 'commodity research bureau'
http://www.crbtrader.com/

have a look at this chart for 3 precious metals..i dont think it is adjusted for inflation though....[broken link removed]


----------



## Nermal

I did one a while back. Can't find where the gold price came from now but the inflation rate was from a US government site.

[broken link removed]

Sorry about the odd hard-to-see colour.


----------



## baby_tooth

doing some econ test on this looking at % inflation rate changes and m1,m2,m3

finding some unusual things, namely lagged effect of CPI and Betas quite low, M2 at t-1 is significant with an R^2 of about 6%

Most interesting thing is that there is a definite spilt in patterns and fitted line , 4 distinct periods.  Not much going on in the 70's, eighties big time until oil crisis when the whole thing goes out the window.

Major trending in the data as is, and gold prices are definitely non-stationary.

Relationship not as strong as i would have thougt....

Not finished as just doing it in my spare time...for fun...how sad indeed.!


----------



## Nermal

baby_tooth said:


> Not finished as just doing it in my spare time...for fun...how sad indeed.!


 
do post when it's done for us other saddos please


----------



## walk2dewater

Good advice for entry point in the GLD ETF.

[broken link removed]

I'm light bullion at the moment so I'm a buyer of gold all day long at prices <US$610.  Thats the current 200 & 50 day moving average price.  Here's hoping we'll see a brief post-Xmas sale!


----------



## www.gold.ie

I am one of the MD's of Gold and Silver Investments Limited.
I have been reading this thread intermittently over the weeks and have enjoyed it. 

In the light of increasing demand due to
Record & Unprecedented US Trade, Budget & Current Account Deficits 
Rising Oil & Energy prices
Overvalued Property Markets 
Record Consumer, Mortgage and National Debt Levels in the US & much of the western world 
Recently Rising Interest Rates in the US and globally 
A depreciating and declining US dollar - the global reserve currency 
Geopolitical Instability and 'The War on Terror' 
Increasing Pensions Difficulties and the 'Demographic Timebomb'
Increasing global investor demand for safe haven assets & Central Bank demand for gold in order to maintain full faith and provide stability to currencies and monetary reserves

and decreasing supply:
Mine production is stagnating, many have closed down. It takes 10 - 15 years to take a mine to production. 
Central banks sales have slowed and in some cases reversed. 
High Energy prices making mining an expensive proposition 
Environmental legislation stymies mine development 
It is estimated that all of the above ground stocks of gold could fit into a 20 Meter high cube, it is very finite.
 
I am amazed that anyone remotely informed does not see the merits of diversifying at least some 5% - 10% of their portfolio to gold bullion or other gold related investments.

With regard to the best way to buy gold – it depends on your motivation as one’s motivation for buying gold is fundamental to helping one distinguish between and evaluate the various options available.
Are you a speculator, investor or saver? Do you wish to take a short term speculative position in gold? Are you investing for the short, medium or long term? 
Or are you diversifying, saving or using gold as a form of permanent financial insurance?

If you are speculating and have a short term horizon and want to go long and short then go with the ETF. The ETF is a paper derivative that tracks the price of gold and one does not own the underlying physical asset ( thus it is akin to spread betting without the leverage involved)  . Also the 0.4% to 0.5% per annum charges and stamp duty make the ETF ideal for short term speculators and not for investors with  a medium to long term outlook.

If you are investing then the Perth Mint Certificate Programme is a superior vehicle as you get an AAA rated government gold certificate from one of the wealthiest states in Australia in your name and there are no ongoing annual administration or storage charges which will eat into the value of the investment over time.

Diversification is key and a little speculation on the ETF, an investment in the Perth Mint Certificate and bullion in an allocated account or taking possession of a small amount of physical bullion is wise.

Happy Christmas and a peaceful and prosperous New Year to All


----------



## plaudit

gold got burned today to extend the fall over the last 2 weeks. the greenback has also recovered over the last couple of weeks. Don't bank on it hitting a new high anytime soon. holding gold pays no dividend, shorting gold/USD pays over 4%.


----------



## smiley

if you are a speculator and not an long term investor this may matter...in the long term it doesnt matter a monkeys..the 200 day moving average on my gold fund started rising a few weeks ago..it continues to do so now, and even after factoring yesterdays closing price.

gold in the long term is an excellent investment..as gold.ie, said on a proportion of your portfolio....


----------



## Howitzer

Surely this is, ahem, prospecting for business?


----------



## smiley

I see Mark Shipman (www.trend-follower.com) has just recently opened a long position on gold  ............his book is also an excellent read.


----------



## room305

smiley said:


> I see Mark Shipman (www.trend-follower.com) has just recently opened a long position on gold  ............his book is also an excellent read.



Given that he invests only when he is convinced an investment is in a strong upward trend this is interesting news indeed.

I have added to my own gold investments in recent days. Not sure if we have seen the bottom yet but reckoned based on current dollar weakness it could be close enough.


----------



## room305

I've put in sell orders on all my energy related shares, mining related shares and gold related shares (held in separate funds). Really wish I hadn't waited until January to do so. Just holding onto physical gold and cash.

Perhaps too hasty but the breakdown in copper and further weakness in oil doesn't portend well for the short to medium term.

Will be looking to add to physical gold and silver holdings if they really start to slide.


----------



## www.gold.ie

In the interest of further informing and educating with regard to investing in gold. Money Week have recently published a comprehensive analysis of the many different ways to invest in gold.
It is entitled *A Beginner's Guide to Investing in Gold* and can be found at  http://www.moneyweek.com/file/23315/a-beginners-guide-to-investing-in-gold.html


----------



## Wilkes

Just for balance and I can say I'm independent on this matter, I do not agree with the commercially motivated argument that an ETF like Lyxor is somehow inferior to certs with the Perth Mint. It is true that there is a default risk difference but for heavens sake the ETF has its gold in physical form held in HSBC bank in London so the point about counter party risk is hugely exaggerated. The above ETF is a regulated stock market instrument and the dealers are regulated stockbrokers. Dealing in physical gold or in Perth Mint certs is outside regulation as I understand it.

The ETF approach keeps getting pigeon holed by those promoting Perth Mint certs as for short term speculators but this is also highly questionable.. It is true that like all ETF's there is an AMC in this case 0.4% pa but what is failed consistently to be stated is the entry cost of 3% for the certs. That is very steep. In a flat market the ETF is cheaper than the certs for 7.5 years!!!. That's a big difference.

The ETF approach also allows I believe for more rapid processing of orders ie is less cumbersome. So lets have some balance please.


----------



## fatmanknows

With oil on the backfoot dragging with it gold - where's the next short term stop for gold. personally hoping for it to maintain the $600+ level before its inevitable ascension to $700 plus.


----------



## hmmm

Wilkes said:


> Just for balance and I can say I'm independent on this matter, I do not agree with the commercially motivated argument that an ETF like Lyxor is somehow inferior to certs with the Perth Mint.


In the interest of disclosure I'll say the company I work for would have an interest in selling ETFs, but I'm commenting here on my own behalf and not for them. But just so you know.

I personally think that most investors look on gold as 
a) A hedge against inflation or
b) A hedge against some chaotic event that causes paper money to become worthless
c) A speculative metal used by industry

For (a) and (c) it doesn't matter where your gold is held, or whether your investment even holds physical gold, as long as your investment moves in step with the market price of gold. I look at the brochures and don't understand why people are happy to know that their gold is stored in Ulan Bator or somewhere else you will never be able to see or hold it. Holding costs are just an expense (as are ETF/managed fund expenses and spreads). The same as if I buy sugar futures I couldn't care less which field it is growing in.

For (b) however you should hold physical gold _in your own possession_. This really is the Mad Max scenario, but I suppose it's not so long ago since the last world war.


----------



## joe sod

room305 said:


> I've put in sell orders on all my energy related shares, mining related shares and gold related shares (held in separate funds). Really wish I hadn't waited until January to do so. Just holding onto physical gold and cash.
> 
> Perhaps too hasty but the breakdown in copper and further weakness in oil doesn't portend well for the short to medium term.
> 
> Will be looking to add to physical gold and silver holdings if they really start to slide.


 
I think you are very foolish to try and be short termist in these markets. You either have to decide whether you buy into the commodities story or not. If you sell on weaknesses in the market then you will lose money, you are better off staying out of the market altogether. The markets are simply way over optimistic on oil prices right now. I was surprised that no account was taken of russia's row with belarus and the UNs decision to impose sanctions on Iran and Saudi Arabias decision to cut production. If this happened in June when oil prices were at their height it would have driven oil to over $85 a barrell. Markets go from pessimism to optimism to pessimism but the long term supply and demand situation is still the same, there is not enough long term supply to meet long term demand. Oil prices are political now and the oil producing countries can easily orchestrate a political event to drive prices back up again


----------



## smiley

joe sod said:


> I think you are very foolish to try and be short termist in these markets. You either have to decide whether you buy into the commodities story or not. the long term supply and demand situation is still the same, there is not enough long term supply to meet long term demand.


 
i couldnt agree more...the simple fact of the matter is the supply of commodities (base metals, oil etc) will not be able to keep up with the huge demand from china,india, pakistan etc...simple supply and demand....simple economics..demand greater than supply..prices go up.


----------



## somerset

www.gold.ie said:


> In the interest of further informing and educating with regard to investing in gold. Money Week have recently published a comprehensive analysis of the many different ways to invest in gold.
> It is entitled *A Beginner's Guide to Investing in Gold* and can be found at http://www.moneyweek.com/file/23315/a-beginners-guide-to-investing-in-gold.html


 

an interesting article on alternative gold strategies:

http://www.smh.com.au/news/david-potts/gold-plan-is-best-bar-none/2006/12/30/1166895516498.html


----------



## www.gold.ie

Re the previous post: "The ETF approach keeps getting pigeon holed by those promoting Perth Mint certs as for short term speculators but this is also highly questionable.. It is true that like all ETF's there is an AMC in this case 0.4% pa but what is failed consistently to be stated is the entry cost of 3% for the certs. That is very steep. In a flat market the ETF is cheaper than the certs for 7.5 years!!!. That's a big difference.

The ETF approach also allows I believe for more rapid processing of orders ie is less cumbersome. So lets have some balance please."


I am all for balance.
Let us get the facts straight though.

The ETF costs are not solely the 0.4% per annum compounded.
There are also stamp duty charges and broker fees.
And the ETF has the bid/offer spread which is generally some 0.20%. 

With regard to counter party risk with regard to auditors and custodians - it is not as simple as the ETF having "its gold in physical form held in HSBC bank in London." 

If you read the ETF's own prospectus there is a string of counter parties who are indemnified.
The prospectus states:
"Some of the risk factors listed in the prospectus are
· the loss, damage, theft or restrictions on access to the Trust’s gold
· the lack of adequate sources of recovery if the Trust’s gold is lost, damaged, stolen or destroyed, including a lack of insurance
· the failure of gold bullion allocated to the Trust to meet the London Good Delivery Standards
· the failure of sub-custodians to exercise due care in the safekeeping of the Trust’s gold
· the limited ability of the Trustee and the Custodian to take legal action against sub-custodians;
· the insolvency of the Custodian
· the Trust’s obligation to reimburse the Purchaser and the Market Agent for certain liabilities in the event the Sponsor fails to indemnify them
· the lack of experience of the Sponsor and its management in operating an investment vehicle such as the Trust
· competing claims over ownership of intellectual property rights related to the Trust "

These are not hypothetical risks. 

This is evident from the fact that the World Gold Council, the sponsor of the StreetTRACKS ETF is being sued by Gemini Diversified Holdings. They accuse the World Gold Council of betrayal and stealing their idea. The lawsuit alleges that the WGC took the idea for an ETF and then developed a "suspiciously similar product."

Recently we have seen the world's largest energy trader, Enron, and the world's largest commodity brokerage, Refco, go bankrupt. Large respected institutions can and do go bankrupt with devastating consequences for undiversified 'investors'.

The Perth Mint has an AAA rating, the highest rating from Standard and Poor's (higher than any Irish bank) and has been operating as a mint since 1899. As it is government owned it means that the investors are indemnified by the citizens of Western Australian -the WA taxpayers. Whereas the private institutions involved in the ETF are indemnified from the ETF investors.
Slightly important distinction that.

With regards liquidity. Perth Mint Certificates (PMCs) are highly liquid and can be sold by simply signing a PM certificate and faxing it or electronically scanning it and emailing it to an Approved Dealer.

Let me be clear. If you are taking a short term punt on gold then the ETF, futures or spread betting is the way to go. However if you are diversifying your portfolio and hedging against geopolitical, macroeconomic or systemic risk then physical bullion in your own safe, physical bullion in a safety deposit box in a secure bank or depository or government gold certificates are a better way to go.

As a stated previously it need not be an "either or" proposition and ETFs for speculation and physical bullion and government certificates can both be in a properly diversified portfoilo.

We can all get along and peacefully coexist.
;-)


----------



## Wilkes

Ah c'mon give us a break from the hard sell. The entire world fund industry is based on custodianship and structures that are a carbon copy of the above. Prospectus are stuffed full of sim ilar warnings written in by solicitors much like those in public car parks. 

While the points you raise a true they are a razor thin argument against the ETF and the introduction of some law suits and, God in heaven, Enron smacks of desperation. 

In a global melt down scenario its true that the ETF might default but if that were to happen you can bank on the whole fund industry going with it together with travel, food etc and you'd have far bigger problems than trying to get on a sailing boat to Perth! You say both can coexist, we agree on that but if you continue to grossly overstate the ETF default risks you will continue to leave your argument open to valid criticism. The facts are that a buy in of 3% and bid/offer spreads for the Perth Mint certs is very pricey and the ETF nothwithstanding the fact that its not AAA but instead Stock Market regulated is good value IMHO.


----------



## www.gold.ie

Not sure who is engaged in the 'hard sell' here.

We have acknowledged and outlined the advantages and disadvantages of ETFs and PMCs and said that there are room for both in a properly diversified portfolio.

"The entire world fund industry is based on custodianship and structures that are a carbon copy of the above."
This is not true. 
Conventional mutual funds or exchange traded funds are completely different from the new Gold and Silver ETFs as they do not have to take physical delivery of the underlying commodity or asset.
The StreetTRACKS Gold Shares and Lyxor Gold Bullion Securities have a combined total of almost 18 million ounces worth $11 billion. This must be taken delivery of, assayed, verified, audited, insured and stored.
Under no circumstances could it be claimed that the Gold and Silver ETFs are typical funds with the same 'carbon copy' 'custodianship and structures'.

I notice you did not address the fact that the ETF is more expensive than the PMC after less than the 7.5 years that you claimed before-
As we stated previously:
The ETF costs are not solely the 0.4% per annum compounded.
There are also stamp duty charges and broker fees.
And the ETF has the bid/offer spread which is generally some 0.20%. 

Enron, Refco, LTCM, Worldcom or all massive corporate bankruptcies that happened and corporate bankruptices will happen again.
Amaranth one of the world's largest hedge funds recently went bust losing it's investors $6.6 billion.

An unsupervised young trader in Singapore in 1995, Nick Leeson lost US$1.3 billion in speculative derivative trading destroying his employer, the 233-year-old Barings Bank, which had Queen Elizabeth II as a customer.

This has happened before and will happen again.

It is not a hypothetical risk. Warren Buffet has warned of the huge proliferation of paper derivatives in recent years and calls them 'Financial Weapons of Mass Destruction'. 
This is a reality which it is important to acknowledge.

Re being "stock market regulated". This is another red herring.
Gold Investments is regulated by the Financial Regulator.The Western Australian government runs the Perth Mint Certificate and thus one is investing in a gold certificate issued by the regulator (the government institution themselves).

Re your "global meltdown scenario". 
A financial meltdown may be unlikely but in the same way that you having a very serious car accident is highly unlikely however it is important to have car insurance in the event of such an accident. Just in case.
Re your "sailing boat to Perth!" comment - it is a bit silly. Our clients have the option (unlike the ETF) of simply calling us up as they have done in the past and instructing us to airfreight their gold to them personally or to a depository such as VIA MAT International in London, Geneva or whereever they choose to store their gold. Switzerland is obviously a favourite in the global meltdown scenario.

Again we have advocated diversification in one's entire portfolio and also in the precious metals component of your portfolio so one is not dependent on any one investment, asset class, third party or institution and this includes having some gold in one's possession.

Gold like property has advantages as it is a tangible asset. In the same way that when one invests in property most people want to directly own their own property and not have it in a third parties name and be a creditor of that third party. One could invest in property through buying a property index but most peope see the advantages of owning the property outright themselves.

Gold remains the ultimate safe haven asset.

It is important to note that this is why every Central Bank in the world has massive reserves of physical gold bullion in their possession in their Central Bank vaults and not stored with third parties in Ulan Bator (as said by the sugar futures speculator) or with other custodians or third parties (not ETFs, futures or other paper derivatives that track the gold price ). 
The Federal Reserve remains the world's largest holder with 8.5 tonnes of gold in their possession in Fort Knox. 

Diversification across asset classes and not being dependent on any one investment or speculative vehicle is of paramount importance and this will become increasingly obvious in the coming years. 

ps
Nick Leeson is now the general manager of Galway United football club.

It is a funny old rock and roll world !


----------



## cole

Not sure where you get 8.5 tonnes held in Fort Knox. 
Got this from Wikipedia:
"The United States Bullion Depository holds approximately 4,570 tons of gold bullion. This is exceeded in the United States only by the Federal Reserve Bank of New York's underground vault in Manhattan, which holds approximately 5,000 tons of gold in trust for many foreign nations, central banks and official international organizations".


----------



## room305

joe sod said:


> I think you are very foolish to try and be short termist in these markets. You either have to decide whether you buy into the commodities story or not. If you sell on weaknesses in the market then you will lose money, you are better off staying out of the market altogether. The markets are simply way over optimistic on oil prices right now. I was surprised that no account was taken of russia's row with belarus and the UNs decision to impose sanctions on Iran and Saudi Arabias decision to cut production. If this happened in June when oil prices were at their height it would have driven oil to over $85 a barrell. Markets go from pessimism to optimism to pessimism but the long term supply and demand situation is still the same, there is not enough long term supply to meet long term demand. Oil prices are political now and the oil producing countries can easily orchestrate a political event to drive prices back up again



I don't necessarily agree but I take your point. Good fundamentals for commodities do not justify holding on at any price (or indeed buying at any price). Best to sell some of your holdings after a large run-up and increase your holdings on weakness. Or dollar-cost average into a position over a longer time frame and avoid timing the market altogether.

I may have been more willing to weather the storm if my investments weren't held in Rabobank funds but they were and since I didn't fancy staying with Rabo for the longterm I converted to cash while I was still in profit.

I'll use this cash to invest on further weakness. Rare gold and silver numismatics look like an interesting bet because they are selling at quite a low premium over spot price at the moment.


----------



## www.gold.ie

*Thanks Cole.
I meant some 8,500 tonnes.

Sure Ireland even had some 14 tonnes prior to giving it to the ECB when we joined the Euro.

The World Gold Council in this report 'The IMF and Gold' ( http://www.gold.org/studies/RS26Gold.pdf ) has a table on page 32 of the World's Top 20 Holders of Gold showing the US as holding 8137 tonnes of gold. While others contend it is some 8,500 to 8,600 tonnes. The problem is despite some public pressure there has been no audit of the US gold reserves in more than 50 years.

There are conflicting reports as to where this gold is stored whether it is in the subterannean vaults of the Federal Reserve in New York, Fort Knox or a combination. 
Fort Knox sounds more interesting though - Goldfinger attempted to steal fifteen billion USD worth of gold bullion to finance the evil SMERSH. Sean Connery as James Bond has a great tussle with Oddjob in the vaults of Fort Knox and folied the dastardly villian Goldfinger.

According to http://www.globalsecurity.org/military/facility/fort-knox-depository.htm
Fort Knox has 147.3 million ounces.

Bottom line is that the Federal Reserve, IMF, Bundesbank and the French Central Bank remain the largest holders of gold and the reason they maintain these huge reserves is to maintain full faith in our modern fiat paper currencies and protect against systemic and monetary crises as experienced as recently as in September 1992 on 'Black Wednesday' when the British pound crashed and Soros became the "man who broke the Bank of England".

*


----------



## finnie

Room 305 you mention lower price of semi numismatics. where do you buy small quantities and any guide to prices?


----------



## room305

finnie said:


> Room 305 you mention lower price of semi numismatics. where do you buy small quantities and any guide to prices?



Lots of reputable dealers selling single coins on ebay. Do lots of research to try and get a good price and buy graded - M65 or above for rare gold coins should facilitate easy resales.

Here's an article:

[broken link removed]


----------



## finnie

Thank you for information will look to see how this works


----------



## www.gold.ie

Agree with previous posters with regard to their being significant value to be found in semi numismatic and numismatic gold and particularly silver coins.

Today (15:21 GMT- 25-01-07) it is trading at $13.42 per ounce.

Silver is massively undervalued, even when compared to gold.
While nearly all commodities are now at all time record highs silver remains some 25% of its record high price in 1980 of $50 per ounce.

An excellent article explaining why 'the herd' has not realised the massively undervalued nature of silver can be found here
http://news.silverseek.com/TedButler/1169580045.php

Silver can be speculated on with silver mining stocks, futures, ETFs or spread betting.

For investment purposes, silver bullion can be bought in large Silver US Dollar Legal Tender Bullion Bags or with large silver bars in a specialist depository or in the Perth Mint Certificate Programme.

With regard to numismatics - 19th century and early 20th century Morgan Silver Dollars MS64 and MS65 are most popular and remain undervalued in numismatic silver.


----------



## room305

Agree that silver is massively undervalued and can add leverage to gold investments (the two tend to track one another but silver is more volatile). However, could you clarify the tax position on silver bullion? I'd love to start buying 100oz bars but paying 21% VAT on it is more than a little off-putting.


----------



## www.gold.ie

Silver bars do attract VAT of 21% if imported into Ireland.

100 oz. and 1000 oz. silver bars can be bought and stored in depositories in the US, the tax free zone in Zurich airport or in unallocated or allocated accounts in the Perth Mint (avoiding VAT).

Silver in PMCP allocated accounts cost 2.5% storage charge per annum and small fabrication fee over the spot rate. Unallocated accounts do not have any annual fee or fabrication fee and are thus more competitive and for that reason most popular. Many go unallocated but intend converting to allocated should their be a large short squeeze and uncertainty in the precious metals and wider financial markets.

If you really want to take delivery of your silver bullion then large Silver US Dollar Legal Tender Bullion Bags can be imported into Ireland. 
Due to their legal tender status they are VAT free. 

These silver coins are US dollars, half dollars and quarters used as day to day currency in the US up until 1970 when all coinage became made of base metals.

The disadvantage of the bags is that they are very heavy (90% bags are 715 oz. of pure silver and weigh 795 oz.). Thus insured delivery of these bags is expensive at some €220 each way. The bag must be returned to a specialist depository to be resold. Thus they are not for investors looking for a return rather they are used as a permanent insurance or savings component of a portfolio.


----------



## room305

www.gold.ie said:


> Silver bars do attract VAT of 21% if imported into Ireland.
> 
> 100 oz. and 1000 oz. silver bars can be bought and stored in depositories in the US, the tax free zone in Zurich airport or in unallocated or allocated accounts in the Perth Mint (avoiding VAT).
> 
> Silver in PMCP allocated accounts cost 2.5% storage charge per annum and small fabrication fee over the spot rate. Unallocated accounts do not have any annual fee or fabrication fee and are thus more competitive and for that reason most popular. Many go unallocated but intend converting to allocated should their be a large short squeeze and uncertainty in the precious metals and wider financial markets.
> 
> If you really want to take delivery of your silver bullion then large Silver US Dollar Legal Tender Bullion Bags can be imported into Ireland.
> Due to their legal tender status they are VAT free.
> 
> These silver coins are US dollars, half dollars and quarters used as day to day currency in the US up until 1970 when all coinage became made of base metals.
> 
> The disadvantage of the bags is that they are very heavy (90% bags are 715 oz. of pure silver and weigh 795 oz.). Thus insured delivery of these bags is expensive at some €220 each way. The bag must be returned to a specialist depository to be resold. Thus they are not for investors looking for a return rather they are used as a permanent insurance or savings component of a portfolio.



None of these methods seem particularly attractive really. I guess I'll look in greater depth into silver numismatics, which could serve as a leveraged play on silver. Junk silver as you mentioned is a possible option but really more for the currency collapse scenario. Was surprised on my last visit to the US that loads of these coins are still in active circulation. Great to pick them up in change!


----------



## phoenix_n

room305 said:


> None of these methods seem particularly attractive really.


 
Why would you discard Perth mint as an option ?


----------



## room305

phoenix_n said:


> Why would you discard Perth mint as an option ?



I wouldn't discard it entirely - in fact for a buy and hold investment it is reasonably attractive. Especially for silver, unless you have a huge amount of spare room in your house! Just that the minimum buy in of $10k is more than I want to invest in silver right now.

An option for the future though certainly.


----------



## phoenix_n

room305 said:


> I wouldn't discard it entirely - in fact for a buy and hold investment it is reasonably attractive. Especially for silver, unless you have a huge amount of spare room in your house! Just that the minimum buy in of $10k is more than I want to invest in silver right now.
> 
> An option for the future though certainly.


 
I could get 5KAUD as i have residency so might go for it. Would it be just as easy to sell as it would be to buy ?


----------



## room305

phoenix_n said:


> I could get 5KAUD as i have residency so might go for it. Would it be just as easy to sell as it would be to buy ?



Just working from memory here but if I remember correctly there is a 1.75% fee above spot value for purchases and then a 0.75% fee levied on sales. When buying there is a $10 charge for the certificate and I think a 0.25% additional charge on the entire transaction, might be slightly higher if you are putting it on a credit card rather than wiring them the money.

Can't imagine there would be any problems with resale. Your only risk (I'm assuming you will go for an unallocated account) would be the bankruptcy of the mint where ascertaining who owns what in unallocated accounts will be more difficult.

It's not like an ETF though, so it really is a long term buy and hold strategy. When you buy it may be a few days before your order gets processed and you can't "lock-in" a particular price - it'll be spot price at the time of processing. Likewise with the sale - there'll be no means of setting a stop loss should prices start sliding.

EDIT: May be VAT issues for residents which you would need to look into.


----------



## phoenix_n

Gonna hold off as trying to figure out if there is going to be a correction in global capital markets this year which will also have an effect on metals ?


----------



## room305

phoenix_n said:


> Gonna hold off as trying to figure out if there is going to be a correction in global capital markets this year which will also have an effect on metals ?



Absolutely impossible to predict. Why not buy half now and half later? Or (more complicated) hedge your bets by purchasing a put option on gold futures?

The PMCP is definitely for longterm gold investments so short-term fluctuations in price should not be a concern.


----------



## phoenix_n

room305 said:


> Absolutely impossible to predict. Why not buy half now and half later? Or (more complicated) hedge your bets by purchasing a put option on gold futures?
> 
> The PMCP is definitely for longterm gold investments so short-term fluctuations in price should not be a concern.


 

Yes impossible to predict. 

Whats your opinion on this article.
[broken link removed]



> This column is suggesting a correction in global capital markets and a lower oil price in Spring 2007, so that might make the summer a good time to buy silver to profit from an upturn in the autumn.


----------



## room305

phoenix_n said:


> Yes impossible to predict.
> 
> Whats your opinion on this article.
> [broken link removed]



Seems light on facts or reasoning. "Sell in May and go away until St. Leger's Day" is an old cliche and perhaps the author is predicating his belief that there will be a "correction in global capital markets and a lower oil price in Spring 2007, so that might make the summer a good time to buy silver to profit from an upturn in the autumn" on this. Who knows? It is not as though he justifies his belief.

If I remember correctly, historically August is one of the best times to buy gold - as Asian and Indian jewellary demand kicks in. However, in recent years Indian jewellers have shown a lot of price sensitivity and tend to try and time their buying to periods when the price has fallen.

If you are trying to time your gold buying then you really shouldn't be looking at purchasing via PMCP but trade using a futures contract, ETF or options.


----------



## bodum

Hi guys, Does anyone know of anywhere in Dublin you can buy gold coins "over the counter" rather than going down the ebay route?


room305 said:


> Lots of reputable dealers selling single coins on ebay. Do lots of research to try and get a good price and buy graded - M65 or above for rare gold coins should facilitate easy resales.
> 
> Here's an article:
> 
> [broken link removed]


----------



## www.gold.ie

Gold coins can be bought from us providing you are over the minimum investment requirement of €4,000.

The minimum rate allows us to deal in volume and therefore offer more competitive rates.

We do not deal in cash or bullion 'over the counter' both for our and our staff's safety and security and the safety and security of our clientele.

All bullion and numismatics is stored in the Delaware Depository -  and shipped fully insured (by Group 4 Securicor) by Fedex to a residence or office of the clients designation.


----------



## Howitzer

How is this not soliciting for business?


----------



## www.gold.ie

This is not 'soliciting for business'.

Rather a direct answer to a direct question by bodum:
"Hi guys, Does anyone know of anywhere in Dublin you can buy gold coins "over the counter" rather than going down the ebay route?"

All our postings have been consciously informational as there is a massive dearth of information with regard to investing in precious metals and thus education has to the why, how and what of investing in gold is important.


----------



## conor_mc

Howitzer said:


> How is this not soliciting for business?


 

Think it's fair enough myself - the conflict of interest is well out in the open, and it's not like www.gold.ie hasn't already been a significant contributor to this thread.


----------



## room305

Howitzer said:


> How is this not soliciting for business?



I agree with conor_mc. This was a response to a direct question asking where a particular item might be purchased and www.gold.ie responded with the required information. They have clearly disclosed the conflict of interest in the information provided.

If someone posted a question "where might I get legal advice in Tullamore?" and a solicitor in Tullamore responded with information on his/her practice (including a disclosure that they were the owner) I doubt they would be getting rapped on the knuckles like this.


----------



## Spondulicks

Some thoughts.

Gold is great at times of political uncertainty but it is hard to carry when the going gets really rough.

On the other side when you have to move in a hurry,  gold often commands more respect than many other assets when you move to another jurisdiction.

You need much clarity on your motive for investing and equal clarity regarding what else you have got as your portfolio needs to be assessed in the round. For pure speculation, it is not the asset at all it is the behaviour of the crowd you have to think about. See the book "Irrational exuberance and the madness of crowds" for a view on this.

Gold is real asset rather than a paper one so it should be compared to other real assets such as land, forestry, art, diamonds etc. Land at least offers some form of return whereas gold just has capital movement potential.

It used to be hard to have gold bullion in an Irish context and I am not sure what is the current game. Do not let anyone know if you have physical gold with the current robbery propensity.

Have you thought about where most of the gold reserves in the world are and to what extent there could be increased supply in the medium term?


----------



## www.gold.ie

The FT had some good articles on gold over the weekend in the light of record demand in 2006:

FT: Ask the Expert: Gold
http://www.ft.com/cms/s/933091c4-b846-11db-be2e-0000779e2340.html

FT: Gold sales hit record $65.3bn
http://www.ft.com/cms/s/6ff2a310-bceb-11db-90ae-0000779e2340.html

Gold sales benefit from ETF demand
http://www.ft.com/cms/s/b2bc9742-bd5d-11db-b5bd-0000779e2340.html


----------



## jpd

A question comes to mind - is the demand created by the ETF purchases a "real" demand or just speculation ?


----------



## room305

jpd said:


> A question comes to mind - is the demand created by the ETF purchases a "real" demand or just speculation ?



What do you mean by this? How is the demand created by physical purchase any more or less "real"?


----------



## conor_mc

room305 said:


> What do you mean by this? How is the demand created by physical purchase any more or less "real"?


 
I'd imagine what he means is that the ease of entry into the market by way of ETF (vs buying and holding real gold) has probably made the gold market somewhat easier to speculate against.

In that case, "real" demand is driven by the traditional motivations i.e. as a store of wealth, hedge against inflation etc.

The less "real" demand then would be people buying gold to make a quick buck on a rising market.


----------



## room305

conor_mc said:


> I'd imagine what he means is that the ease of entry into the market by way of ETF (vs buying and holding real gold) has probably made the gold market somewhat easier to speculate against.
> 
> In that case, "real" demand is driven by the traditional motivations i.e. as a store of wealth, hedge against inflation etc.
> 
> The less "real" demand then would be people buying gold to make a quick buck on a rising market.



I thought maybe that was what the poster was driving at but I guess what confused me was the implication that this might be a bad thing?


----------



## conor_mc

room305 said:


> I thought maybe that was what the poster was driving at but I guess what confused me was the implication that this might be a bad thing?


 
Certainly if I was investing in Gold from a long-term safety perspective, I'd be concerned if a significant element of the current price could be apportioned to speculation..... because we all know how speculation can drive a market a little bit loco....

On the other hand, if I were a gold speculator, I'd welcome all the other spec's with open arms..... as long as none of them sell up until after I do!


----------



## room305

conor_mc said:


> Certainly if I was investing in Gold from a long-term safety perspective, I'd be concerned if a significant element of the current price could be apportioned to speculation..... because we all know how speculation can drive a market a little bit loco....
> 
> On the other hand, if I were a gold speculator, I'd welcome all the other spec's with open arms..... as long as none of them sell up until after I do!



I generally view gold as catastrophe insurance but the involvement of a speculative element and easy access to the gold market through ETFs ensures the market is liquid. They might drive the market ahead of itself at times but it also works in the reverse if there is a stampede to the exit for some reason. This then creates opportunities for those who wish to buy and hold.


----------



## jpd

Yes, I meant that the arrival of Gold ETF's has lowered the barrier for speculators and thus probably made the market more volatile and driven by opinions - although it has probably also increased the liquidity.

Aahh! if only we could know exactly where we are now !


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## rock3r

Hello goldbugs!

I actually bought some krugerrands from Gold.ie, and very nice they are too.

If I wanted to sell one of them without faffing about on ebay, what would I be best off doing? I'm not trolling for sales here, just looking to see if there's any better advice than "stick it on buy & sell"

Also, is anyone interested in the notion of buying in non-krugerrand form?

As far as I can tell, the smallest way to do that is to buy a CBOT mini-sized gold contract, which specifies delivery of about 1 kilo of .995 pure gold in one bar.

Oh, and the dollar price is doing rather nicely now, though the Euro price is still sluggish.


----------



## gonk

rock3r said:


> If I wanted to sell one of them without faffing about on ebay, what would I be best off doing?


 
Why not sell back to Gold Investments? (Although they do have a minimum purchase amount of €3,500, so they wouldn't buy just one from you.)


----------



## rock3r

gonk said:


> Why not sell back to Gold Investments? (Although they do have a minimum purchase amount of €3,500, so they wouldn't buy just one from you.)


 
I think you just answered your own question!


----------



## gonk

OK, well if you really wanted to sell just one, some jewellers will buy gold, don't know what discount off the spot price you might have to take though. I vaguely remember selling a gold ring for scrap to a jewellers in Thomas St years ago. No idea what their name was.


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## rock3r

Taking a discount on a coin that usually fetches a 7% premium on sale is a bit too much of a bad move for me.


----------



## rock3r

*So who owns krugerrands?*

Or indeed any other type of investment precious metal?

Physically, I mean. Not through an ETF or anything.


----------



## gonk

rock3r said:


> Taking a discount on a coin that usually fetches a 7% premium on sale is a bit too much of a bad move for me.


 
Think you'll have to anyway. Nobody (including Gold Investments) will pay a retail investor the spot price, especially not for a single ounce.


----------



## rock3r

gonk said:


> Think you'll have to anyway. Nobody (including Gold Investments) will pay a retail investor the spot price, especially not for a single ounce.


 
Actually ebay punters do pay above spot for krugerrands quite a lot. Check it out every once in a while. I've noticed that they do tend to pay even higher on weekends.

If gold continues its bull run a lot longer, I predict you'll get businesses offering over spot for kroodges.

They'll offer 2% over spot, and sell it on for 6.5%. They'll probably ask for a EUR50 deposit to cover appraisal.


----------



## jpd

*Re: So who owns krugerrands?*

Krugerrands are gold coins. Anyone can own them. You can buy them from coins dealers, etc

Is that what you are asking ?


----------



## MugsGame

*Re: So who owns krugerrands?*

rock, are you asking if any other AAM members hold speculative investments/hedges like this? Are you just curious, or do you think this information will be useful somehow?

You are a fairly new poster, and if I was a cynic I might think you were a dealer trying to raise the profile of a certain Irish website.


----------



## gonk

rock3r said:


> Actually ebay punters do pay above spot for krugerrands quite a lot.


 
But you already said you don't want the hassle (not to mention the risk) of dealing via ebay.

You asked for advice - you got it for what it's worth. The best advice I could have given you, but it's too late now, would have been to figure out for yourself your options for exiting your investment before you actually entered it, instead of coming here and knocking every answer you're given.


----------



## rock3r

*Re: So who owns krugerrands?*

definitely not selling on here.

Also, don't have a website & I'm not promoting anyone else's.

Though if anyone has any thoughts on the whole gold investment thing, especially with krugs, I certainly would read with interest. I think that's reasonably on-topic, though.


----------



## rock3r

didn't mean to knock you gonk, hope we can still be friends


----------



## sunrock

I had a gold panda coin once...nice panda pic....from china.
What has krugs got a pic of ..springbox?
The thing about gold is it has very little intrinsic value.If there is a big slowdown with deflation and high unemployment the price of all items gets cheaper...that includes gold.If there is high inflation ,no doubt gold will increase in price but as there is no interest/rent/dividend it`s unlikely to increase as much as other asset classes. Its main appeal is to hoarders and as transportable wealth in a dangrerous area as well as jewelery.
The idea that gold is a good investment...well one would have to be living in a gold`s "fool`s paradise".I await some contrary responses where i expect to be showered with something less expensive than golddust.


----------



## room305

Gold is insurance against systemic collapse. People buy insurance for lots of other things, I'm surprised so few buy insurance for this. Every single fiat currency in the history of mankind has over a period of time been reduced to zero. The value of gold may fluctuate against other currencies but it is the only currency that is always and everywhere acceptable when the chips are down.

When a few years ago treasure hunters found some old Nazi Reichsbank loot hidden in the woods in Bavaria, the old paper currencies were worthless but the gold was still valuable. What does that tell you?

Even Alan Greenspan himself admits to the value of gold:


> ... gold still represents the ultimate form of payment in the world. It's interesting that Germany could buy materials during the war only with gold. In extremis fiat money is accepted by nobody and gold is always accepted and is the ultimate means of payment…



That's the key point - during economic extremes (be it inflation or deflation) - gold becomes invaluable as a store of wealth and a form of acceptable payment. I'd prefer to buy it when I can rather than when I have to.

It is perhaps irrational but I sleep easier knowing I have some.


----------



## rock3r

I think its status as a good investment comes from our old friend supply & demand.

4000 tons of the stuff is used annually for making jewellery, fillings and electronics.

But only 2500 tons are mined every year. Bill Gates could personally buy up a full year's production from his petty cash.

The shortfall seems to mainly come from Central banks dumping gold at below market value, and miners who sold forward during the great gold slump of 1995-2000. Those are both very finite sources, and eventually will be tapped out.

Eventually a consortium will be formed, which will simply buy up the 2500 tons of global production, and then simply sit back and watch prices hit the moon.

They'll start the week as comfortably-off investors, and finish it as magnates.

My prediction. I can't say when it'll happen but I assume it'll be in the next 3-10 years.

By the way, did you know that gold is now at an all-time high, when measured by the 52-week average? You may know that there was a peak of over 800 in 1980 for a few brief moments, but this is gold's biggest sustained rise.


----------



## MrKeane

The only problem about the demand is that people will stop using / buying gold as jewellery, who's to say some artificial product is no on the way that looks and lasts better than the real thing?

If 2500 tonnes are mined and the price goes up then less viable mines will be opened, the same as oil, at low prices the less lucrative wells were not as attractive but they might be now.


----------



## room305

MrKeane said:


> The only problem about the demand is that people will stop using / buying gold as jewellery, who's to say some artificial product is no on the way that looks and lasts better than the real thing?
> 
> If 2500 tonnes are mined and the price goes up then less viable mines will be opened, the same as oil, at low prices the less lucrative wells were not as attractive but they might be now.



Gold is free market currency. Canadian banks trade it off their currency desks. It's unlikely the ability to make a metal as inert as gold is just around the corner. There is very little easy gold mining left, except maybe in the oceans themselves.

As for demand? Someday (nobody will know when) some extremely rich people will realise that the value of their vast horde of paper assets is rapidly reducing to zero. If they wish to preserve their wealth they will need to exchange it for silver and gold.

It is not necessarily about exchanging gold for more paper, it is about already having gold when everybody else needs it.


----------



## rock3r

MrKeane said:


> The only problem about the demand is that people will stop using / buying gold as jewellery, who's to say some artificial product is no on the way that looks and lasts better than the real thing?
> 
> If 2500 tonnes are mined and the price goes up then less viable mines will be opened, the same as oil, at low prices the less lucrative wells were not as attractive but they might be now.


 
You should also remember that the price of gold is only a small component of your average ring's retail price. So a 50% rise in gold would only add 5% to the cost of a high-end ring.

If you think it takes a long time to get new oil production and refining on line, gold is many times slower. There's room for gold to grow massively as mines go through the ultra-slow process of becoming productive.

The whole commodity complex is slowly adjusting to Greenspan's easy-money regime of 1996-2006. The adjustment will be slow and orderly, but it'll happen.


----------



## rock3r

*Fyi*

somebody said on here that it will always be impossible to get market value or better for a Krug.

If you go onto ebay.co.uk today, you'll probably see krugerrands available and getting bids for £380 plus postage, yet today's price for that much gold is £344. So clearly, beating the spot price is possible on ebay (although maybe not in the face-to-face world).

I've noticed that on Mondays, krugerrands fetch a low ebay price, and it gets better throughout the week, seeming to always end Friday at a better-than-spot price.


----------



## gonk

*Re: Fyi*



rock3r said:


> somebody said on here that it will always be impossible to get market value or better for a Krug.
> 
> If you go onto ebay.co.uk today, you'll probably see krugerrands available and getting bids for £380 plus postage, yet today's price for that much gold is £344. So clearly, beating the spot price is possible on ebay (although maybe not in the face-to-face world).


 
Somebody else was asking how to sell krugerrands without "faffing about on ebay". You'd be a braver man than me to buy and sell gold on ebay, but if you think it's such a good idea why aren't you doing it yourself?


----------



## rock3r

*Re: Fyi*



gonk said:


> You'd be a braver man than me to buy and sell gold on ebay, but if you think it's such a good idea why aren't you doing it yourself?


 
Buying might require courage, but surely selling is reasonably safe. You get your money before you post anything.

Why amn't I selling right now? Well, I think the price'll go higher if I wait a bit longer. No great mystery there, surely it's occurred to you that people don't always sell assets immediately.

I wish there was a way to reliably get a premium for your Krugs in person as distinct from online. I like people, and all else being equal I prefer the human touch, but I'm not prepared to take such an illogical hit for a real-life transaction.

Does it really seem illogical to you?

Why the hostility, dude?


----------



## MugsGame

I've moved some general discussion on gold here from the Savings and Investments forum. The Savings and Investments forum is primarily for specific questions, rather than ongoing discussions.


----------



## gonk

*Re: Fyi*



rock3r said:


> Buying might require courage, but surely selling is reasonably safe. You get your money before you post anything.


 
Just because it seems buyers are willing to pay 10.5% over spot for krugerrands on ebay doesn't mean the seller would receive that much. Selling on ebay isn't free. If you were using Paypal to receive payment, total costs in your example above would be £14.95 to ebay and £13.27 to Paypal. This would bring your margin down to 2.26% over spot.



rock3r said:


> Why amn't I selling right now?


 
That's not what I asked. In your first post you expressed an unwillingness to sell on ebay. I asked why if you now say such good premiums over the spot price are available on ebay you won't use it.



rock3r said:


> Does it really seem illogical to you?


 
Yes. If you can sell for immediate cash payment a few points below spot and not have to go to the hassle of listing on ebay, waiting for the auction to end, wait for payment (if your buyer doesn't renege), then pack & post the gold, it does seem illogical to me. You'd gain maybe £20 or £25 on the deal. I've better things to do with my time . . .



rock3r said:


> Why the hostility, dude?


 
There are many ways of expressing hostility. One is to come onto a site like this asking for advice and when it's offered in good faith respond with smart alec know-it-all answers, which as we can see above, don't bear scrutiny.


----------



## rock3r

I think you're just looking to demonstrate some kind of superiority, yet you still admit that a premium is to be had on ebay which is apparently absent in real life for no apparent reason. Have you demonstrated why this ought to be the case?

There's nothing "smart-alec" about expressing a desire that the real-life world should be able to match the prices of the online world.

Anyhow, now that we have that ugly business over with: I propose to keep a loose record on here of bidding prices available on ebay.


----------



## room305

rock3r said:


> I propose to keep a loose record on here of bidding prices available on ebay.



Please don't. If the incredibly boring bickering back-and-forth between yourself and gonk doesn't see this thread moved to "Letting off steam" by the moderators, then lists of ebay prices for gold surely will.


----------



## rock3r

request noted.

What is, in your view, an acceptable thing to discuss on this thread? 

I won't rise to anything gonk posts in future so that's clearly not going to be an issue.


----------



## conor_mc

The thread is about the merits of investing in gold, posting available commentary etc.

I wouldn't imagine there's much interest in tracking ebay prices because there probably aren't too many people looking to sell gold coins at any given time.


----------



## rock3r

conor_mc said:


> I wouldn't imagine there's much interest in tracking ebay prices because there probably aren't too many people looking to sell gold coins at any given time.


 
That's one way of looking at it.

Another way would be to say: millions of people own coins in one-ounce form.

The only investment gold business in this state only offers gold in the form of one-ounce krugerrands.

Ergo: anyone who wishes to invest in gold in this state will probably buy in the form of one-ounce krugerrands.

Ergo: anyone at all who has become a gold investor in Ireland will want to know how she can realise her investment. At present, the two options for realising a gold investment are:


sell your krugerrands at a hefty discount to spot price to a jeweller for scrap
sell your krugerrands at a possible premium to spot price on ebay
So, if you are serious about investing, ebay is probably your only reasonable way of selling any potential investment you are likely to make.

Certainly, you can buy gold in London or New York. But that hits you for a huge transaction cost of travel and currency. You can buy Perth mint certs, but they demand a huge investment for ordinary people.

The non-krugerrand options for Irish gold investors are slight indeed. Krugerrands are, and are likely to remain, the dominant method of gold investment in Ireland.

And while ebay remains the only place you can sell a krugerrand at a premium to spot, it makes sense for somebody on the internet to track it.

It's not as if anyone else is barred from making comments. Lots of other investment threads on other boards keep track of various things: the price of MSFT; dollar/yen; Brent crude.

They manage very well to track AND discuss without any brain aneurysms resulting. It is hyper-relevant info, after all.


----------



## room305

If you plan on tracking ebay prices for gold please do it on another thread. This thread is for commentary and analysis on _why_ people might invest in gold.

With regards to exit strategy it all depends on your investment and circumstances. If you are buying a view to selling in a few months for a profit, it seems a bit silly to actually buy the physical stuff. Trade through an ETF or spreadbetting company.

If you are investing for the long term, the Perth Mint is probably the way to go. I would disagree that amounts are out of the reach of ordinary investors as the minimum entry is only $10k which even I managed to amass.

Someone who only has a single kruggerand to sell and needs to sell right now, will either have to take their chances with ebay or try and negotiate with a jeweller. Either it is a fairly specific set of circumstances and I'd appreciate if you didn't clog up half the thread endlessly raving about it.


----------



## MugsGame

> If you plan on tracking ebay prices for gold please do it on another thread.



In fact rock3r, please do it on another site. You could even setup a site dedicated to watching commodity prices. Feel free to post a link or aggregate statistics here.



> This thread is for commentary and analysis on why people might invest in gold.



And also how they might divest, which is why I merged the discussion here.

But like you I don't see how a long discussion on spot prices adds anything that's useful to the vast majority of investors/speculators.

MugsGame (moderator)


----------



## rock3r

room305 said:


> If you are investing for the long term, the Perth Mint is probably the way to go. I would disagree that amounts are out of the reach of ordinary investors as the minimum entry is only $10k which even I managed to amass.


 
My notion of an ordinary person would be a person who had 10K invested in the normal way (equities and securities) and €500-€1000 in gold as a hedge against a market disaster.

Most gold-friendly investment analysts suggest no more than 10% of total investments in any precious metal. By your reckoning an "ordinary person" would need to have 100K in total to invest in order to follow their advice. If one should only have 10% in gold and it's ordinary to put 10K into Perth mints, then the total investment would be 100K

Possible news for you: someone with 100K to invest is affluent, not ordinary.

They could stick it in Rabo and/or comparable bonds, move to Poland and live comfortably as hell.

Ordinary people would have to work for a living, no matter where in the EU they are.


----------



## conor_mc

To be fair, someone with total investments of 10k or so doesn't need a hedge like gold. They'd be better off sticking the whole lot in equities and trying to build their wealth before they start trying to protect it.


----------



## rock3r

conor_mc said:


> To be fair, someone with total investments of 10k or so doesn't need a hedge like gold. They'd be better off sticking the whole lot in equities and trying to build their wealth before they start trying to protect it.



Someone who bought only equities in late 2001 would've been severely hurt by 2005. For that time frame, owning gold would've seriously relieved their inflation burden. You might call turning €500 into €1000 small beer, but it's serious money for most people.

Nobody "needs" a hedge, anyway. Hedges are about risk appetites, mostly. Also, the fact that it's tax-free is also important.


----------



## gonk

rock3r said:


> the fact that it's tax-free is also important.


 
It is not. Gains on investment in gold are subject to capital gains tax in the normal way.


----------



## room305

rock3r said:


> My notion of an ordinary person would be a person who had 10K invested in the normal way (equities and securities) and €500-€1000 in gold as a hedge against a market disaster.
> 
> Most gold-friendly investment analysts suggest no more than 10% of total investments in any precious metal. By your reckoning an "ordinary person" would need to have 100K in total to invest in order to follow their advice. If one should only have 10% in gold and it's ordinary to put 10K into Perth mints, then the total investment would be 100K
> 
> Possible news for you: someone with 100K to invest is affluent, not ordinary.
> 
> They could stick it in Rabo and/or comparable bonds, move to Poland and live comfortably as hell.
> 
> Ordinary people would have to work for a living, no matter where in the EU they are.



Is this a socialist diatribe or an investment strategy? It is not my reckoning that only 10% of your portfolio should be in precious metals. Apart from a few long term share holdings which I have trimmed of late, I am about 50% in gold and silver and 50% in cash.

In this scenario of a person hedging a €10k shareholding with a kruggerand or two (gold as insurance) why are they so concerned about whether they can sell now on ebay for a premium over spot-price? When it comes time to cash in that insurance policy you'll be able to sell that coin to your neighbour for all the paper money he has if you so wish.

Of course, presumably at that stage you won't want that paper money because it will have debased to nothing.


----------



## conor_mc

rock3r said:


> Someone who bought only equities in late 2001 would've been severely hurt by 2005. For that time frame, owning gold would've seriously relieved their inflation burden. You might call turning €500 into €1000 small beer, but it's serious money for most people.
> 
> Nobody "needs" a hedge, anyway. Hedges are about risk appetites, mostly. Also, the fact that it's tax-free is also important.


 
That's a four year timeframe for investing in equities.... that's a bit short, isn't it?

Seriously though, at 10k I'd concentrate on building wealth before adjusting strategy to conserving wealth. Turning €500 to €1000 is like an extra weeks wages for most people in Ireland now - it is small beer, no matter how you look at it. And that's coming from someone who isn't wealthy by any stretch of the imagination.


----------



## room305

conor_mc said:


> Seriously though, at 10k I'd concentrate on building wealth before adjusting strategy to conserving wealth. Turning €500 to €1000 is like an extra weeks wages for most people in Ireland now - it is small beer, no matter how you look at it. And that's coming from someone who isn't wealthy by any stretch of the imagination.



Exactly, with these kind of investments amounts it is not really worth hedging your portfolio. Invest the €10k in stocks and try and build wealth over a minimum of ten years. Furthermore, invest in your career - you'll achieve a much higher return in a much shorter time frame.

As your wealth grows (through labour and investment) hedging strategies will play a greater role.


----------



## rock3r

Seeing as gold has outperformed equities altogether this decade so far, I think the numbers don't stack up behind the "put it all on equities and don't put any gold in until you're very far over 10K".

Gold is likely to be the single common optimum performer behind the majority of portfolios of which it's a part.

I'd say there's no portfolio so small it should be gold-free. Even professional equity-pickers are powerless to beat its results with any consistency.

It's kind of inevitable, when money supply constantly outpaces equity markets.

Sure, if gold gets to €1000/oz before 2010, it'll probably be a good idea for people to reduce holdings. But right now, very few asset classes can touch it.

It's the only thing that's valuable today that you know for absolute certain, will be valuable to people in 2107.


----------



## beetlebum

rock3r said:


> It's the only thing that's valuable today that you know for absolute certain, will be valuable to people in 2107.


 
you cant know that, i could discover alchemy works, and flood the market with gold!!!


----------



## room305

rock3r said:


> Seeing as gold has outperformed equities altogether this decade so far, I think the numbers don't stack up behind the "put it all on equities and don't put any gold in until you're very far over 10K".



Extrapolating the future behaviour of gold vs equities from a single decade worth of data is not exactly prudent investment. Equities outperforms every asset class over the longterm.



rock3r said:


> Gold is likely to be the single common optimum performer behind the majority of portfolios of which it's a part.



What does this sentence even mean - do you know?



rock3r said:


> I'd say there's no portfolio so small it should be gold-free. Even professional equity-pickers are powerless to beat its results with any consistency.



What about Warren Buffett, Peter Lynch, Benjamin Graham, Philip Fisher and emmm ... oh yeah, every yahoo who bought any of the US indices in the late seventies ...



rock3r said:


> It's kind of inevitable, when money supply constantly outpaces equity markets.



What does this mean? At what pace would the money supply have to grow so it didn't "outpace" equity markets?



rock3r said:


> Sure, if gold gets to €1000/oz before 2010, it'll probably be a good idea for people to reduce holdings. But right now, very few asset classes can touch it.



With a single kruggerand the opportunity to reduce your holding doesn't really exist. You either sell or you don't. I can only hope you weren't planning on listing ebay spot prices on this thread for the next three years.



rock3r said:


> It's the only thing that's valuable today that you know for absolute certain, will be valuable to people in 2107.



Hardly the _only_ thing but it is certainly an easily accessible and convertible store of wealth for us common folk.


----------



## rock3r

Gold is an element.

A type of atom, not a type of molecule. To produce gold on demand, you'd need to be able to configure protons, neutrons and electrons into the precise configuration of gold.

They'll invent a time machine and cure death before that can be done.


----------



## beetlebum

rock3r said:


> Gold is an element.
> 
> A type of atom, not a type of molecule. To produce gold on demand, you'd need to be able to configure protons, neutrons and electrons into the precise configuration of gold.
> 
> They'll invent a time machine and cure death before that can be done.


 

I'm well aware of the atomic and sub atomic characteristics of Au, I'm also aware of the ability to create elements by bombarding one atom with another in facilities such as CERN in Switzerland.  - but none of this is important here.

I was only trying to highlight the point that there is absolutely no way you can know with "absolute certainity" that gold will be a valuable commodity in 100 years time!!!



PS i also think alchemy may be easier (but still near impossible) than "curing death" or building a time machine!!

PPS the points room305 made as well are a far more interesting and intelligent rebuke, to your comments on gold investing.


----------



## rock3r

> What about Warren Buffett, Peter Lynch, Benjamin Graham, Philip Fisher and emmm ... oh yeah, every yahoo who bought any of the US indices in the late seventies ...


 
They're good general investors, accross the whole financial spectrum. But you're deliberately choosing the best in the world. If you include all the other professional stock-pickers, their average goes way down below gold's 2001-2005 performance (which is the time at issue, not 1975-present).



> At what pace would the money supply have to grow so it didn't "outpace" equity markets?


 
Equity markets grow at 7% annually on average. So for money supply not to outpace it, it'd have to be below that. But, in fact, money supply is growing at anything from 9% to 20% annually all over the world. Only in Japan is it low.

This creates an inevitable scenario where too much money will chase too few goods and services. This means that, as the Marxists used to say, that a structural tendency towards crisis exists in the global economy.


----------



## room305

rock3r said:


> If you include all the other professional stock-pickers, their average goes way down below gold's 2001-2005 performance (which is the time at issue, not 1975-present).



Yes but what exactly is your point? Do you not think it is potentially dangerous to look at the four year performance of one asset class and extrapolate future returns from it?



rock3r said:


> Equity markets grow at 7% annually on average. So for money supply not to outpace it, it'd have to be below that. But, in fact, money supply is growing at anything from 9% to 20% annually all over the world. Only in Japan is it low.



Do you actually check your facts or do you just make them up? What kind of sense does it make to take the average return on equities over more than a century and compare it to the growth rate of money supply (M3, M2?) in the past few years. Last year the S&P 500 returned nearly 16% - reformulated M3 was judged to be around 11%. Where does this leave your theory? Why is it relevant to either the future spot price of gold or equity investors?



rock3r said:


> This creates an inevitable scenario where too much money will chase too few goods and services. This means that, as the Marxists used to say, that a structural tendency towards crisis exists in the global economy.



Most of what you say sounds a bit half-baked, like you read a blog eulogising gold, digested it and are now regurgitating parts of it here.

I am not sure what your point is really. I guess if you want to make investment decisions based on a few years of data go ahead. Contrary to what you may read elsewhere, there is no direct correlation between money supply growth and gold spot prices. If you find any - present the links to appropriate charts and graphs here.

The best way to grow wealth is through equity investments over the longterm. Gold pays no dividends and anyone who bought gold at the 1979 peak is still down on their nominal investment before inflation is even considered.

You still haven't answered the most important question - if you think gold will continue to outpace equities, why are you so keen to sell? Perhaps you're just trolling and I'm stupid for wasting time replying.


----------



## rock3r

room305 said:


> You still haven't answered the most important question - if you think gold will continue to outpace equities, why are you so keen to sell? Perhaps you're just trolling and I'm stupid for wasting time replying.



I think the most important question is this: if you really don't hate your wife, why haven't you stopped beating her up?*

Or maybe this question: If I'm the troll, how come you're the one asking questions based on bogus premises?

Just because I'd like to some day realise my profits in gold without getting a below-spot price, doesn't mean I'm keen to sell at present. You knew that or you need reading lessons.

*(For any mods who might think I've made an accusation: of course, I have no idea if he has a wife or not. But if you look at the wording, it's clear that it's a rhetorical trick question, just like his false allusion to my being "keen to sell gold" was.)


----------



## www.gold.ie

There have been a number of inaccuracies and misperceptions in the gold thread.

Perth Mint Certificate Minimum orders are $10,000 USD (some €7,400) and not beyond the reach of many smaller investors. The average SSIA amount maturing last Monday was €14,000.

Gold has not been a terrible investment. Importantly, it has outperformed both the S&P and Dow Jones since 1971 when the present fiat dollar non gold standard money system came into existence. 

The fundamental tenet of investment theory is diversification. This tenet applies to all investors - individual, company and institutional.

"...from a portfolio diversification standpoint, holding gold has proven to be an excellent investment. We at the BIS hold a considerable amount of gold and in recent years have benefited considerably on a valuation basis from the rise in the price of gold."
Robert Sleeper, Head of the BIS Banking Department, 'How Central Banks Manage their Finances' Bank for International Settlements (The Central Bank's Central Bank)

An excellent article on gold and the Bank of england's gold reserves and Gordon Brown's incompetence appeared in the Sunday Times two weeks ago:
http://www.timesonline.co.uk/tol/news/politics/article1655001.ece

The fundamental tenet of investment theory is to be properly diversified and not have all the eggs in the one basket – whether that be the stock, bond or property markets. It has been shown in numerous financial and academic studies that an allocation of some 5% of one’s portfolio to precious metals is prudent. 

Many financial professionals and investors worldwide recognise the important role that precious metals can play in stabilising and reducing volatility in a portfolio. This is particularly evident in the fact that the largest owners of gold bullion remain the world's Central Banks and the IMF ( US Federal Reserve: 8133 tonnes, the Bundesbank: 3440 tonnes, the Banque de France: 3024 tonnes and the IMF: 3217 tonnes). 

Central Banks maintain their gold reserves as gold is the only asset class which is no one else’s liability, in order to maintain full faith in modern paper currencies and to protect against monetary crises as experienced by the Bank of England during the sterling currency crisis of 1992.

Jim Power, Chief Economist of Friends First believes gold is the asset class of the moment. "I teach Financial Management on a part-time basis in Dublin City University and a central tenet of what I teach concerns the virtues of portfolio diversification. I am a firm believer and have argued in numerous presentations on the topic of Property v Equities that it is not a case of either/or, but a case of both. I would be a big fan of holding gold as part of a diversified portfolio and would feel more confident about it than any other asset class at the moment."


----------



## rock3r

Sure, but there's a lot of people with less than four figure sums to invest. In Euro terms, that include the vast majority of individuals who own physical gold: the Indians.

Gold's easy to store and doesn't perish. Requiring $10,000 or even half that before you can purchase any gold effectively excludes 95% of humanity from investing.

The cheerleaders of gold at the World Gold Council say "Gold is the only real money".

Yet these same council members, who claim to be gold salesmen, say "you're in the 95% of the global population that cannot afford to pay our sky-high minimum purchase fee? Sod off then."

I know that gold.ie is doing the best it can in difficult circumstances.

But there is a global monopoly in gold which refuses to sell in small amounts. This needs to be broken and the companies who do successfully break that monopoly and profitably provide gold in small amounts to buyers will become very wealthy indeed.

For example, has anyone ever tried a rebate scheme? Buyer pays say €100 above spot price for a krugerrand, but gets the €100 back in a rebate after 6 months. Seller recoups transaction costs from interest on the rebate.

Rebate schemes work very profitably for all kinds of products, so why not gold?


----------



## room305

rock3r said:


> Rebate schemes work very profitably for all kinds of products, so why not gold?



Because people whose net worth amounts to less than $10k are often more concerned with obtaining food week-to-week than investing profitably in precious metals. Indian buyers are primarily gold jewellery buyers, although some rural areas with poor banking facilities also use gold as a form of savings.

I doubt many people are too worried about this supposed abomination of a gold monopoly but the Chinese government has continually lowered the barrier for gold purchases for its citizens so perhaps some progress is being made.

Alternatively, why not cease the entrepreneurial reins yourself?


----------



## www.gold.ie

Gold and silver can be bought for as little as €1/ $1/ £1 with Gold Money:
[broken link removed]

Also there are discussions with jewellers in Ireland in order to allow small investors/ savers to buy and sell small bars and coins on an incremental basis.


----------



## rock3r

www.gold.ie said:


> Gold and silver can be bought for as little as €1/ $1/ £1 with Gold Money:
> [broken link removed]
> 
> Also there are discussions with jewellers in Ireland in order to allow small investors/ savers to buy and sell small bars and coins on an incremental basis.


 
That sounds promising, hope that comes to fruition soon. Is this in Ireland only or more broadly?

I really feel that gold bugs (buyers, sellers and those of us who are both) need to get off their backsides and put an end to this silly situation where small buyers are excluded by big barriers. Gold requires no refrigeration, occupies a tiny amount of space, is extremely malleable etc. 

It really oughtn't be so hard for someone with €100 to spend to pick up approximately that much, with a reasonable 5 or 10% profit for the vendor.

Those of us who want gold to succeed are shooting ourselves in the foot by allowing this situation to continue.

Incidentally, that's why I think there oughta be a pro-gold only thread in addition to this one, for those of us who do not debate the value of Au or think it is a barbarous relic, but who differ on ways to help gold succeed.


----------



## rock3r

Spain's central bank just dumped 28 tons of gold on the market. It seems Spain is having some kind of difficulty making ends meet. Does anyone know about this?


----------



## room305

rock3r said:


> Spain's central bank just dumped 28 tons of gold on the market. It seems Spain is having some kind of difficulty making ends meet. Does anyone know about this?



You mean right this minute? Doesn't seem to have bothered the gold futures market. Even thought gold held up well yesterday in light of the stock market sell-offs.


----------



## gonk

rock3r said:


> Spain's central bank just dumped 28 tons of gold on the market.


 
"just dumped" is a little misleading. It sold this gold throughout May, after sales of 40 tonnes each in March and April. Presumably these sales have already had whatever effect they're going to on the market. See here:

[broken link removed]

PS, wouldn't it be interesting to know how much of this gold originally arrived in Spain via the Conquistadors?


----------



## rock3r

True, I could have been more precise.

In fairness the futures markets are bemoaning gold's performance. Oil and equities in the USA are soaring, and despite the continuing deficits, gold is a laggard.

The small-time investor has left the market.

As well he might, given the fact of the barriers to entry.

When Joe Nobody can wander in off the street and buy a 5 gram pure gold wafer for no more than 2% over spot, gold will soar again, but not until then.


----------



## room305

rock3r said:


> In fairness the futures markets are bemoaning gold's performance. Oil and equities in the USA are soaring, and despite the continuing deficits, gold is a laggard.



You must have missed the last two days fun on the US indices then. Why would "continuing deficits" matter to gold?



rock3r said:


> The small-time investor has left the market.



Good. It was one of the reasons I bought back into gold in the last few months. When they start buying again I'll start selling.



rock3r said:


> As well he might, given the fact of the barriers to entry.
> 
> When Joe Nobody can wander in off the street and buy a 5 gram pure gold wafer for no more than 2% over spot, gold will soar again, but not until then.



Indeed. If it only it were so simple to buy gold as purchase a property, Joe Nobody could really get in on the action.


----------



## room305

gonk said:


> "just dumped" is a little misleading. It sold this gold throughout May, after sales of 40 tonnes each in March and April. Presumably these sales have already had whatever effect they're going to on the market.



Gold market has absorbed 170 tonnes of ECB bank sales in the last three months with only a very small contraction in price. This is pretty bullish imo.


----------



## rock3r

But adjusted for real-life inflation, it's doing horribly. It's a genuinely scarce asset, at a time when pent-up inflation looks set to overwhelm the world, and the shorts are in charge of the market. The US$ has halved in value since the early 80's but gold has yet to double from that period. 

I read somewhere that it needs to go to $1200 simply to catch up with its 1981-1984 average price, adjusted.

The fact that it's failing to break $700 right now, given that background, is a major blow to the medium and short term gold bull's case.

Eventually, something will break and gold will re-adjust, but that could be 5 years from now, as the status quo is not sustainable in the long term. It could easily spend the intervening years below its current level. Especially if central banks keep selling.

Never underestimate the power of markets to remain illogically over or undersold for very protracted periods.


----------



## rock3r

Gold's taken a severe beating in the last 4 weeks. It's fallen to its 200-day average.

That, by the way, is a good sign for gold:

http://www.kitco.com/charts/techcharts_gold.html

Check out the green line: every time the POG gets close to that line, a fast shoot upwards has been the norm within several weeks


----------



## joe sod

liquidity crunch not hurting gold, its holding up alot better than i thought, although many analysts are wondering why gold is not shooting up in this environment, however throughout its ascent since 2001 it has continuosly outwitted the analysts. The interst rate cut by the Fed can only benefit gold as it shows the fed will do the same as 2001


----------



## sunrock

The problem with gold is that it acts  like a currency but one receives no rent or dividend.It`s like putting your wad in a drawer and coming back in a few years...your money is worth a whole lot less due to inflation.
None of the major currencies is backed by gold.
The major central banks orchestrate the value of their currencies against each other,with no consideration of the price of gold.
Thus gold has been a bad investment for the past 20 years or more .
I don`t see why this should change,especially as it doesn`t benefit from the commodities metals boom.


----------



## z109

sunrock said:


> I don`t see why this should change,especially as it doesn`t benefit from the commodities metals boom.



According to Wikipedia:
"...the annual gold supply is around 3,500 tonnes.

About 3,000 tonnes goes into jewelry or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds.

According to the World Gold Council, gold demand rose 29% in the first half of 2005. The increase came mainly from the launch of a gold exchange-traded fund, but also from jewelry. Gold demand was at an all time record. Demand from the electronics industry is rising by 11% a year, jewelry by 19%, and industrial and dental by 21%."

What is interesting is that the recent rise in gold prices could be seen as a result of gold as a commodity (as 6/7ths of annual gold supplies go into commodities).

Which would suggest that in an economic downturn gold prices will fall with everything else as commodity demand eases.


----------



## room305

sunrock said:


> The problem with gold is that it acts  like a currency but one receives no rent or dividend.It`s like putting your wad in a drawer and coming back in a few years...your money is worth a whole lot less due to inflation.



This is a major misunderstanding of how gold works. You don't need any dividend because gold is a true store of value. Put your cash in a sock drawer and in forty years it'll have depreciated considerably or even no longer be in use. An ounce of gold will still be an ounce of gold - the only thing you'll have lost in those forty years is the opportunity to gain a return on your capital through investment.



sunrock said:


> None of the major currencies is backed by gold.



Which will lead to their eventual demise. _Every_ single fiat currency in the history of mankind has eventually been reduced to worthlessness.



sunrock said:


> The major central banks orchestrate the value of their currencies against each other,with no consideration of the price of gold.



Themarket decides on the value of currencies relative to one another not the central banks. If they gave no consideration to the price of gold, they wouldn't sell so much of it.



sunrock said:


> Thus gold has been a bad investment for the past 20 years or more .



Yes and no. Gold does well at extremes - hyper-inflation, high inflation, stagflation, deflation, collapse of an economy or political system. These times you want to own gold. However, it is best to buy it before you need it.



sunrock said:


> I don`t see why this should change,especially as it doesn`t benefit from the commodities metals boom.



It's not a commodity it's a currency. Sure, a large portion of annual production goes into jewellery and some into industrial usage but this in itself is only a fraction of the total amount ever mined - the bulk of which is still above ground.


----------



## room305

yoganmahew said:


> Which would suggest that in an economic downturn gold prices will fall with everything else as commodity demand eases.



Possibly in the initial stages of a downturn as leveraged speculators rush for the exits. However, I think this would be a temporary phenomenon. Anyone seeking to protect their existing wealth during a downturn, will prefer to hold gold. It is the only money not beholden to anyone. This cannot be said of the dollar, the Euro or any other store of wealth.


----------



## joe sod

I was listening to pat kenny the other day and he had some commentator talking about the market turmoil and what people should do. Basically he said people should hold firm he plugged the irish banks but shied away from saying people should buy (probably afraid they might fall more). He mentioned gold as part of a diversified portfolio. But interestingly it was the only investment he put a negative spin on saying it peaked in 1980 and still has not topped that. Basically the financial establishment does not want people buying gold and does not want money flowing into gold because it is something they have no control over. Therefore if the financial establishment is so afraid of it, it is something people should hold. Above all i think people should ignore irish commentators and focus on what international commentators are saying, no irish analyst advised investors to sell the banks over the last few months


----------



## room305

I've no affiliation with Gold and Silver Investments except as a happy customer but I was interested to see their director interviewed on CNBC. The company has posted previously on this thread as www.gold.ie. Quite a coup I should think. He looked slightly nervous but I thought he made some excellent points and seemed comfortable mentioning $2,500 an ounce as a possible target for gold.


----------



## abakan

Do you think with the price of gold rising that the US government are happy and could possibly sell off their gold reserve´s and thus slashing their trillion foreign deficit before Bush leaves office and that would put loads more gold on the market and prices would drop in gold

 you would have to think this could happen early next year before Bush leaves office

just a though!!


----------



## room305

abakan said:


> Do you think with the price of gold rising that the US government are happy and could possibly sell off their gold reserve´s and thus slashing their trillion foreign deficit before Bush leaves office and that would put loads more gold on the market and prices would drop in gold
> 
> you would have to think this could happen early next year before Bush leaves office
> 
> just a though!!



One conspiracy theory advanced is that Greenspan's deliberate bubble and dollar destroying policies were part of an Ayn Rand style (Greenspan is a huge fan) solution to destroy all fiat currencies and force a conversion back to the gold standard.

Note how the US has not sold any of its gold holdings unlike many Eurozone central banks.


----------



## joe sod

I think the strategy is to allow gold rise slowly and keep it under the radar. The Fed etc don't want it rising fast because then it would attract to much attention from the general public and could cause a loss of confidence in fiat money. It is interesting that gold has been rising steadily since 2001 and still has not attracted  popular attention  except  for a  brief spell  in  may 2006  when it rose spectacularly  but then  dropped equally  so  frightening  off  popular attention.


----------



## IrlJidel

Noticed this here at end of RTE news report on PRSAs:

"Separately, the Irish Revenue Commissioners have approved gold bullion as an investment option for pension funds"


----------



## Teapot

it looks like it is going be a long time before the markets gat back on track.

http://news.bbc.co.uk/1/hi/business/7074354.stm


----------



## abakan

could the fed let gold go to 2500 dollars,

gold will go up next before the end of this year and maybe some of next year,

the dollar will get worse and with the "looming" credit card crisis about to hit the states and dollar will take a futher blow = good for gold

also citibank had to be bailed out during the week by the US treasary, times are bad in the states and the look ahead would be good for gold


----------



## room305

abakan said:


> could the fed let gold go to 2500 dollars



How or why would the Fed have any say in the matter whatsoever? Never mind whether the Fed decides to "let" gold reach $2,500 an ounce. If that's the price the market is willing to pay, then that's the price it will be, regardless of what the Fed thinks of the matter.


----------



## Teapot

This is very worrying for the whole economy hope it will soon end.

http://news.bbc.co.uk/1/hi/business/7070935.stm


----------



## Sunny

Teapot said:


> This is very worrying for the whole economy hope it will soon end.
> 
> http://news.bbc.co.uk/1/hi/business/7070935.stm


 
Not likely to soon end. 2008 promises to be even worse


----------



## Teapot

Do you think that it will lead to a global recession - I hope not as it will be very bad news for everyone.


----------



## MrKeane

Can you imagine the craic if they end up demolishing loads of the houses flipped in this country over the last decade because they were overrun by vandals.


----------



## abakan

[broken link removed]

It mentions that china were thinking of moving from dollars to a move stable currencys, maybe euro but move more likely to gold.

what would that mean for things and the price of gold, would it prob go higher??


----------



## Teapot

Prices has gone up again for petrol which will obviously have a further bad affect on the markets - when petrol goes up it means that everything else will follow.


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## room305

Teapot said:


> Prices has gone up again for petrol which will obviously have a further bad affect on the markets - when petrol goes up it means that everything else will follow.



What? Petrol was a lot cheaper in 2003, presumably if I check back I'll see the ISEQ was a lot higher back then, right?

Also, why does an increase in petrol signify that "everything else will follow"? Why couldn't the opposite effect occur, as a consequence of people having less disposable income?


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## ivuernis

Teapot said:


> Prices has gone up again for petrol which will obviously have a further bad affect on the markets - when petrol goes up it means that everything else will follow.


Rising petrol prices are a symptom, not a cause.


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## badabing

MrKeane said:


> Can you imagine the craic if they end up demolishing loads of the houses flipped in this country over the last decade because they were overrun by vandals.



http://www.independent.ie/national-news/children-6-threaten-to-kill-each-other-1214974.html


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## MichaelDes

***Worried about Asset Values***Please Help***Worried about Asset Values***Please Help***


Are nearly all asset classes no longer safe other than gold at the moment? Especially given the continued trouble with Libor increasing yesterday and the BoE losing control to the City mentality of "used car salesmen" money traders. Coupled to this the Abx markets,credit default swaps index ($45trn value), property derivatives, Fiat currency and Capital markets are all causing a fix with inflation and are all cresending together etc etc. We therefore maybe witnessing a major financial contagion . If price inflation is being led by cost push inflation (eg rising raw material costs), not demand pull inflation, (where increasing wages > increasing prices>increasing wages) could Gold be the only safe and relevant choice. Rate cuts IMO by the BoE and Fed could cause further problems rather solutions in the medium to long term.

Greed and fear have always rapidly driven the markets, both ways, with no ground in between. At the moment *fear is in vogue. *Many companies are stock piling more and more money to protect their liquidity into 2008. So much so that even the mighty giant Merrill Lynch, can't get its hands on enough and has resorted to borrowing at astronomical rates of 11% from the Saudi's to protect positions.

Investors are now rushing out of equity and straight into gold, with traders tipping gold to reach ridiculous highs from its present level. It would astound you what some London traders are tipping [$1k-5k an ounce depending on the crisis] but maybe they are doom merchants looking for investment commissions. So, is this all Y2K stuff or is there loads of fallout going on from the credit crisis. Is it just the tip of the iceberg. If there is more bad news, would a greater weighting in gold be a better hedge to protect hard earned savings?? And if so what percentage of a large portfolio should it consist of - 20%, 99% or more??

Please tell me I'm overly bearish and exagerrating in this worrying situation. But the future to me could be hyper inflation and gold could rise accordingly as a safe enough security.


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## stir crazy

I have a gold bracelet which was worth more than 1000 euro roughly 10 year ago. It's not an antique. Its' value comes from its' size and weight.

I just wonder if rising gold will also increase the value of my gold jewellery ?

Do jewellery/ jeweller's prices follow the price of gold in the markets ?


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## z106

More cuts are very much expected in the next few months by the fed.
In that case - is it not a no-brainer to just invest in gold now?

Like - have many people on this thread invested in gold?

Do many people think gold will _*not*_ rise in value over the next,say, couple of years?

Like - is this a bull run we should all be gettimg stuck into?

Or are peoples opinions divided ?

I've just had a punt on it myself in the last fortnight - (and know little about it) so naturally it is now on my radar like never before.


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## joe sod

it has been steadily rising under the radar since 2001, and yes i think it will continue to rise well into the future, it only seems to be attracting alot of popular attention recently as the housing slump has started which has caused the financial meltdown on global markets. It is also part of the commodity boom which has been ongoing since 2001 but which is also now only getting popular attention as people notice prices for everything rising in supermarkets. All these events are good for gold and all these events have alot further to run, inflation is only now becoming embedded in the global system 7 years after the commodity boom started, therefore this trend has an awful lot further to run. Therefore we are now only at the end of the beginning in this trend.


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## z106

Is there a school of thought out there that is bearish?


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## room305

stir crazy said:


> I have a gold bracelet which was worth more than 1000 euro roughly 10 year ago. It's not an antique. Its' value comes from its' size and weight.
> 
> I just wonder if rising gold will also increase the value of my gold jewellery ?
> 
> Do jewellery/ jeweller's prices follow the price of gold in the markets ?



Yes is the answer to both of these questions.


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## kellyiom

room305 said:


> Yes is the answer to both of these questions.


I actually disagree, sort of. It should do, but I doubt you'll find much improvement on price unless it's a sought-after piece. The weight and purity won't really make that much difference on a pure scrap metal basis as there's enough new gold coming out to produce new items and relatively small private transactions are always marked lower or more costly anyways. As the raw gold price has risen, so too has the cost of handling, storing, insuring it so I don't think we'll see people makign money from their jewellery unless it has some artistic or aesthetic value that people will pay a premium for.


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## z109

kellyiom said:


> I actually disagree, sort of. It should do, but I doubt you'll find much improvement on price unless it's a sought-after piece. The weight and purity won't really make that much difference on a pure scrap metal basis as there's enough new gold coming out to produce new items and relatively small private transactions are always marked lower or more costly anyways. As the raw gold price has risen, so too has the cost of handling, storing, insuring it so I don't think we'll see people makign money from their jewellery unless it has some artistic or aesthetic value that people will pay a premium for.


Well maybe. If you buy gold jewellery in the gulf, it is sold on the basis of it's weight/gold purity + 1-5% for the craftsmanship. A Mr. T. gold necklace/bracelet (e.g. any chain gold) being on the lower end of the scale. So the jewellery is worth it's gold value. On selling, the likelihood is that it'll be worth weight/gold purity - 1-5% depending on how complex it is to turn back into gold! Again, this is based on the way they do things in the gulf.


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## kellyiom

heh, yeah, you're right. If you like it, buy it and if you just want to invest in gold, get some krugerrands or those bullion trackers. Hadn't thought of Mr T for a few years now. Man, he'll be quids in!


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## z109

kellyiom said:


> Hadn't thought of Mr T for a few years now. Man, he'll be quids in!


It'll pay for his new knees from lugging all that weight around!

(Every time I hear Mr. T. mentioned, I can't help thinking about Eddie Murphy's nightmare! "Hey boy, looking mighty fine in them tight jeans...").


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## kellyiom

yeah, top one. Love that guy Murphy. Wonder if he's got Irish rellies down the line somewhere and will pop in for some info?! 'I'm trading some orange juice futures and wanted to know...' apols for going seriously o/t...


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## Sangster

I'm a complete novice at this lark.  I have an etrade account that was set up for me years ago after receiving some stock for the tech co. I work for.  I would like to buy some gold and I was wondering if one of you could give me 'an idiots guide' on how to do so.

Thanks


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## beetlebum

Sangster said:


> I'm a complete novice at this lark. I have an etrade account that was set up for me years ago after receiving some stock for the tech co. I work for. I would like to buy some gold and I was wondering if one of you could give me 'an idiots guide' on how to do so.
> 
> Thanks


 
have you looked in this thread, also think there is a search function somewhere!!!


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## joe sod

"I'm a complete novice at this lark. I have an etrade account that was set up for me years ago after receiving some stock for the tech co. I work for. I would like to buy some gold and I was wondering if one of you could give me 'an idiots guide' on how to do so."

from my experience you cannot buy and sell stock with accounts set up by your company with etrade, all you can do with these accounts is sell your stocks for cash. However if you set up a new account with etrade then you can buy and sell whatever you like. You can also sell your company stocks and then ring etrade and inform them to transfer the cash to your own personal account.


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## z106

hat's people outlook on gold for the next month?

Will it hold its own?

Presumably the potential cuts by the fed next week have already been factored in.

I'm trying to decide if i should sel now or not


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## abakan

Is now the time for everybody to jump in and buy Gold, $1000/oz and rising quick....
IMO the US dollar is gone as a currency and the euro wont be far behind, gold is the only stable currency out there. i;m thinking we'll see $2000  before the year is out.

My only question is weather the new US president will have any difference to the US economy??

any opinions


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## joe sod

abakan said:


> Is now the time for everybody to jump in and buy Gold, $1000/oz and rising quick....
> IMO the US dollar is gone as a currency and the euro wont be far behind, gold is the only stable currency out there. i;m thinking we'll see $2000 before the year is out.
> 
> My only question is weather the new US president will have any difference to the US economy??
> 
> any opinions


 
WRONG, if anything gold is due a big correction and the dollar a rally, ever since gold took off in 2001 this has been the pattern, a major run up and then a major correction, all the while its long term curve has been upward, but gold has crucified the speculators, who have tried to make a killing , the same thing happened in 2006 when there was a major run up, alot of media interest and speculation and then gold turned tails and corrected big time. My advice wait for the big correction


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## MichaelDes

joe sod said:


> WRONG, if anything gold is due a big correction and the dollar a rally, ever since gold took off in 2001 this has been the pattern, a major run up and then a major correction, all the while its long term curve has been upward, but gold has crucified the speculators, who have tried to make a killing , the same thing happened in 2006 when there was a major run up


 
If Gold is generally trending upwards then it is hard to time a correction, it could occur tomorrow, 6 months or 18 months time. But if the general trend is upward then does it matter? The correction in 2006 was not as extreme considered in the scheme of things by comparison now, it's just a matter of staying invested as the American financial system falls apart. The $200bn FEd intervention will be like peeing into the wind...


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## joe sod

abakan said:


> Is now the time for everybody to jump in and buy Gold, $1000/oz and rising quick....
> IMO the US dollar is gone as a currency and the euro wont be far behind, gold is the only stable currency out there. i;m thinking we'll see $2000 before the year is out.
> 
> My only question is weather the new US president will have any difference to the US economy??
> 
> any opinions


 
looks like a major correction in gold and silver, it is crucifying the speculators again just like in may 2006, silver will now frighten people by how quick and fast it corrects, thats the thing about commodities there is so much speculation involved, probably also a major lift in the dollar


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## taponavillus

just came across this thread about gold i bought gold coins a few years ago.have 75 for sale including 40 sovereigns. approx 16 ozs gold for sale. have to liquify my assetts .if any one is interested i can be contacted at taponavillus@eircom.net


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## george.shaw

Interesting thread. Had missed it before. Some of warnings from 2006 seem quite precient. Funny that Pat Kenny recommended Irish bank shares and was negative on gold because it was below its nominal high in 1980. Gay Byrne admitted on Marion Finucane at weekend that he had lost a lot money on Irish bank shares. Wonder is Pat in the same both? Sounds like most of the Irish public, they failed to properly diversify unfortunately.


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## george.shaw

Is gas that the majority of people who post re gold on AAM are negative and this Gold Thread has not been posted on at all and yet people think gold is a bubble.

This is in marked contract to the sentiment on AAM in relation to equities and property prior to their bubbles bursting. Everybody was buying property in Ireland, UK, US, Spain and Bulgaria; there were hundreds of property threads and the few people who suggested to beware of bubbles were laughed at or dismissed as "doom and gloom merchants".

The majority of people in Ireland, the UK and much of the western world do not know what the price of gold is ; let alone how you could buy it. This is slowly changing as a small minority are realising the dire straits we are in and the risks of a currency crisis.

According to National Geographic, only 161,000 tons of gold have been mined in human history — barely enough to fill two Olympic-sized swimming pools. More than half of that has been extracted in the past 50 years. ETF holdings, which the World Gold Council reported climbing 33 percent last year, represent far more gold ownership than actually exists.

Thus, all the gold in the world mined since the dawn of time is worth some $5 trillion.

The Federal Reserve just created some $1.1 trillion the other day!!

Gold remains an essential diversification.

Diversify People


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## sunrock

Beware of investing in gold companies as many  have toxic assets such as derivitives.
If investing in gold,buy bullion  i.e. the actual gold.
Gold may well increase in value as paper currencies are overprinted.
However the paper currencies are not going to collapse and are the medium of exchange.


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## george.shaw

Good point Sunrock - gold mining companies have geological, natural disaster, environmental, litigation, auditor, management, trade union and nationalisation risk that gold bullion itself does not have.

Eddie Hobbs just recommended gold bullion on Mooney as he believes double digit inflation is coming in the coming months.

While gold has consolidated nicely and is up some 5% in dollar terms and more in euro terms so far in 2009 (unlike nearly all other assets), silver remains extremely undervalued relative to gold and other asset classes:

Silver's Discount To Gold Sticks Out Like A Sore Thumb
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20090313%5CACQDJON200903130949DOWJONESDJONLINE000638.htm&&mypage=newsheadlines&title=COMMODITIES%20CORNER:%20Silver's%20Discount%20To%20Gold%20Sticks%20Out%20Like%20A%20Sore%20Thumb


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## UptheDeise

abakan said:


> Is now the time for everybody to jump in and buy Gold, $1000/oz and rising quick....
> IMO the US dollar is gone as a currency and the euro wont be far behind, gold is the only stable currency out there. i;m thinking we'll see $2000 before the year is out.
> 
> My only question is weather the new US president will have any difference to the US economy??
> 
> any opinions


 
President Obama is worst than Bush what with all his stimulus and bail out packages that are going to run to a couple of trillion dollars by year end.

The Americans are in debt and rely on countries like China and Saudi Arabia to buy this debt in the form of treasuries. Sooner or later these countries will realise that America is a busted flush and dump all these dollars onto the market. This will in turn cause massive devaluation of the US dollar, interest rates will sky rocket and the brown stuff will have truly hit the fan.

Diversify into gold and silver.


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## george.shaw

Questions as to whether Fort Knox holds all the gold that the US government claims to hold are increasing and now in the Times of London.

If they do not have the gold (has not been auditted since the 1950's) then it would likely see the price of gold increase very significantly.


*Is there any gold inside Fort Knox, the world's most secure vault?*
*http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5989271.ece*


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## UptheDeise

Gold has actually many uses in industry. See here: http://www.youtube.com/watch?v=zdu5yS5q2so&feature=channel_page


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## george.shaw

Interesting video Up the Deise.

Recycling metals, plastics, glass etc. will be growth industries in the coming years as our small planet's resources have been unsustainably used in recent years and it will be more cost effective and efficient to use recycled materials.

Hope some budding Irish entrepreneurs will look at this video as there are huge employment and business opportunities in this sector.


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## zztop

Duplex said:


> Hey WTTW wait till I sort myself out before starting a bull run on gold.
> 
> I think that a gold allocation is a good defensive move at the moment, as the creditability of the Fed’s tightening policies is brought into question with the demise of M3 money supply data. Its also interesting to note that the M3 money supply data coming from the ECB suggests that M3 is growing by 8-9% well above what the ECB is comfortable with.
> 
> One important caveat, Gold or other precious metals investment is speculative; however it has proven to be a good hedge against inflation in the past. I still anticipate a credit crunch (to follow the present global debt bubble), caused by rising defaults and a widespread (global) property market reversal.
> 
> PS
> I heard something today about my local property market that has sent chills down my spine, I am witnessing debt driven easy money mania here, big-time.


 
Well Duplex...thanks for the warning


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