Investing in Gold

And as for a suitable investment vehicle, spread betting is a very cost effective way of trading gold futures. Yes, there is an element of risk in that you can lose a lot if prices move against you but with some decent risk management you can make some very good profits on the current uptrend in precious metals.

And of course you can bet on downward trends too.

An excellent book on spread betting is The Financial Spread Betting Handbook by Malcolm Pryor. And to be clear I have no connection whatsoever with the author. I simply read the book and found it an excellent guide to spread betting.
 
just wondering if anyone has any thoughts on the gold situation recently. prices seem to have pulled back slightly. would now be a good time to invest?
 
How would one take physical possession of Gold or Silver? Are there any sellers in Ireland? Coins or bullion? Are there any travel restrictions, say if I wished to purchase abroad? (sorry for all the questions!)
 
Gold is going to be the next bubble. Everybody is running away towards gold, but once interest rates start going up Gold will fall big time, so be careful. Instead I would suggest Oil.
 
Catan said:
How would one take physical possession of Gold or Silver? Are there any sellers in Ireland? Coins or bullion? Are there any travel restrictions, say if I wished to purchase abroad? (sorry for all the questions!)
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Be prepared to pay a hefty price for physical gold coins. I think gold.ie (Dublin based) sell gold and silver bullion, haven't used them, so I can't say anything about their service or reputation. Most Swiss and German banks sell gold coins over the counter. There is no VAT on investment grade gold within the EU, but I'm not sure if you could get hit by some import taxes when bought outside the EU. The only travel restriction I can think of is the weight. Value of the gold may only be a problem when traveling outside the EU where you have to declare any goods or cash worth more than €10000.
You could also look into silver coins. I got quite a few on ebay at a reasonable price just before Christmas.
 
Chris said:
Be prepared to pay a hefty price for physical gold coins. I think gold.ie (Dublin based) sell gold and silver bullion, haven't used them, so I can't say anything about their service or reputation. Most Swiss and German banks sell gold coins over the counter. There is no VAT on investment grade gold within the EU, but I'm not sure if you could get hit by some import taxes when bought outside the EU. The only travel restriction I can think of is the weight. Value of the gold may only be a problem when traveling outside the EU where you have to declare any goods or cash worth more than €10000.
You could also look into silver coins. I got quite a few on ebay at a reasonable price just before Christmas.
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Thanks Chris, for the info
 
I just found another way that will save you a lot of money. www.goldmoney.com now offer delivery of 100, 400 and 1000 gold gram bars. The cost for converting 100 gold grams into a bar is 4%. They don't seem to deliver to Ireland, but you can go and collect it there.
A 100 gram bar would cost you as follows:
1) 104 gold grams to make 100 gold gram bar
2) 2.74% to buy the gold grams => 104 /0.9726 = 106.93 gold grams
3) 106.93 * €25.37 = €2712.81 for 3.22 troy ounces of gold
4) that works out at about €842.49 per ounce
Of course you have to go and collect it in London.

There are a couple of 1oz. Krugerand coins for sale on ebay at €920, so you can save a good bit this way.
 
'You could also look into silver coins. I got quite a few on ebay at a reasonable price just before Christmas'.

Im also thinking of buying some silver from ebay. I'd be looking at holding on to it medium term but was wondering how easy or where to sell (not ebay) when the time comes. Any suggestions?

Thanks.
 
I will be in New York next week and was wondering if it is possible to walk in off the street and buy Gold/Silver coins over the counter?
 
Radiowriter said:
Im also thinking of buying some silver from ebay. I'd be looking at holding on to it medium term but was wondering how easy or where to sell (not ebay) when the time comes. Any suggestions?

Thanks.
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Sounds like you are looking more at investing, in which case I wouldn't recommend physical bullion (at least not at the moment). I believe that most bullion dealers will buy your gold and silver, but only at the spot price. This means you need to make up the markup, charged for buying the gold in the first place, through an increase in the price of gold. At the moment the markup on gold coins is between 15 and 20%. A few years ago when I bought the gold I physically own the markup was hell of a lot less; I'd have to dig out receipts but I'm sure it was only about 5%.
Physical ownership of gold is more like an insurance against a worst case scenario of total banking or currency failure, maybe for very long-term investments. Don't take this is any sort of buying advice, but do your own calculations on what your returns would have to be.
 
Good article on gold in yesterday's Sunday Business Post

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Because gold has so few practical uses, its appeal is almost entirely psychological. It is valuable solely because we believe it to be. This is wholly unlike equities, bonds, property or other more orthodox investments.

...

Gold represents the ultimate Keynesian beauty contest. The idea is that the price of an asset is simply what somebody else thinks it is worth rather than being based on any intrinsic, or fundamental, calculation. So the game becomes one of guessing what the next person is likely to pay.

...

An oddity about the most recent surge in the gold price is that it has been described as part of the ‘mother of all carry trades’. Famed academic Nouriel Roubini, for one, thinks that gold is just the latest in a long series of bubbles fuelled by too-low interest rates, a bubble like all others, destined to burst. Traders are selling the dollar and buying commodities like gold. Why?

Mostly because they can and they believe that everyone else is doing it.
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Headline: 'Ex Stockbroker says 'Gold is a terrible investment', Buy Equities Shock'

Chris is crystal ball gazing and is again failing to observe the most important rule of investing - DIVERSIFICATION.

Gas that he can predict a bubble in gold but could not in Irish property or equities - indeed he denied there was any bubble in 2006.

He like many in the Irish financial services industry fails to realise that gold is money and that is why all the central banks in the world became net buyers of gold in 2009 and are predicted to do so again in 2010.

Central banks are rightly concerned about financial, economic and systemic contagion. The German Bundesbank recently clearly stated how they view gold as a an essential monetary asset. “National gold reserves have a confidence and stability-building function for the single currency in a monetary union,” the Bundesbank said.

I would tend to lean more towards the expertise of the central banks in the world and the Bundesbank rather than the head of investments at Bank of Ireland.

If gold rises to above its price adjusted for inflation in 1980 ($2,400/oz) which many analysts believe it will then Chris may have some egg on his face.

DIVERSIFY
 
ps
Nouriel Roubini said the dollar would rise in 2009 and it fell.

My money is on people who invest their own money and invest for a living and not on an academic. Would trust Marc Faber, Jim Rogers and George Soros more than Roubini re investment advice.

pps
When Ask About Money has a large number of posts about investing in gold coins, ETFs, gold certificates, storing bullion in Ireland, storing bullion internationally etc and frequent postings on gold as it did for property then gold will be a bubble.

That will be the time to take profits and sell gold but we are a long way from their yet with most retail investors not even knowing the price of gold in dollars let alone how to invest in it .

Another indication will be a number of bullion dealers setting up to sell gold bullion (think only one at the moment). Today there are a number of companies buying gold from the public and only one selling which is another contrarian indicator:
The woman (and man) in the street in selling their gold and not buying when this trend reverses - sell your gold.
 
george.shaw said:
ps
Nouriel Roubini said the dollar would rise in 2009 and it fell.

My money is on people who invest their own money and invest for a living and not on an academic. Would trust Marc Faber, Jim Rogers and George Soros more than Roubini re investment advice.

pps
When Ask About Money has a large number of posts about investing in gold coins, ETFs, gold certificates, storing bullion in Ireland, storing bullion internationally etc and frequent postings on gold as it did for property then gold will be a bubble.

That will be the time to take profits and sell gold but we are a long way from their yet with most retail investors not even knowing the price of gold in dollars let alone how to invest in it .

Another indication will be a number of bullion dealers setting up to sell gold bullion (think only one at the moment). Today there are a number of companies buying gold from the public and only one selling which is another contrarian indicator:
The woman (and man) in the street in selling their gold and not buying when this trend reverses - sell your gold.
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I read somewhere that Roubini doesn't even like equities prefering to hold cash. He seems to be going all out on deflation.

Marc Faber is by far the greatest economist in the world today. I bet he hasn't sold any of his mining companies.

I would add Peter Schiff to the list of 'real' economists to follow.

No one in the real world, outside of the investing forums is talking about gold. The odd comment is made but who of the general population has even invested in gold or even knows how to?

The West is a decade away from sorting its problems out. The new head of RBS in the UK was on today saying 10 years to resolve.

The US, UK and Europe (with the Euro) have major structural problems to resolve and the solution of throwing debt at a debt problem is crazy and leading to a depression.

To not own a small element of gold in a well diversified portfolio is mad in my opinion. Gold performs in uncertain, badly governed times.

Gold is currently in a bull market and not in a bubble (not yet anyway but I hope it does one day!).
 
Good points Ringledman - in time Schiff and Faber will be seen as having been far more prescient than Roubini and his simplistic deflationary analysis.

This article in the Telegraph today is very good and warns of hyperinflation:
A global fiasco is brewing in Japan
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An article with a different slant on gold from last weekend's Irish Times. Plenty of reasons not to invest in gold:
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Excellent and harrowing article but is a ridiculous and simplistic tabloid style headline not befitting of the Irish Times.

The poor people mining in the article are poor and desperate not because of the "price of gold" but rather because of complex socio economic reasons such as colonialism, lack of democracy, corruption etc.

Very little of the world's gold supply comes from Burkina Faso or sub Saharan Africa at all rather the largest producers are South Africa, China, Australia, Canada and the U.S.

When investors buy gold bars and coins from these mints they are getting gold mined in a sustainable and ethical manner. However those buying gold jewelerry cannot be so sure if their gold is conflict free.

Gold, unlike paper money, is an excellent store of value that has preserved its value over the centuries. Saying that owning or investing gold in gold is responsible for the plight of the poor in Africa is simplistic guff.

It is akin to saying that owning paper money, stocks, property or land or any other form of money or tangible asset is unethical.

With the euro set to come undeer severe pressure in the coming months and years - [broken link removed] , Irish investors and savers who all have significant Euro risk (not to mention the mad David McWilliams devaluation proposal risk !) should have an allocation to gold as euro gold will rise much higher than euro dollar.

 
ps
having said that the article itself is harrowing and brilliant and the video, while depressing, is well worth a watch:
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Fair play Cancan - still attacking the ball and not the man. :)

Lost the argument on why a small allocation to gold for financial insurance purposes makes sense - have we?

I seem to recall you crystal ball gazing and claiming that gold was a bubble a year or two ago - like most others.

Glad to see you are still open minded and have gradually come to understand the merits of DIVERSIFICATION. :)

The claim that gold is a bubble is absurd as gold remains less than half of its inflation adjusted price in 1980 - $2,300/oz.

And silver is even more undervalued - trading at $16.50/oz today it is less than half of its nominal high of nearly $50/oz in 1980 and a fraction of its inflaiton adjusted high of $130/oz in 1980.

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If worried about a bubble potentially forming in gold, than buy its still very undervalued precious sister silver.
 
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