Is gold a good investment

ps re the comment: "How, practically speaking, would gold insure you against hyperinflation? Can you get your gold bars and melt them down into little pieces and start bartering for your dinner??"

Gold is the only thing that protects people in deflation (1930's America) and hyperinflation as people in Germany in 1920's and throughout history have experienced.

Those who invested in gold in Zimbabwe and in Iceland today have been protected from economic meltdown. Gold has risen 1000's of percent in Zimb and in our neighbours to the north gold has risen by more than 200% in Icelandic krona in the last few months.

People in these countries who have invested in gold can sell their gold (gold is highly liquid unlike property) and get Euros, dollars or icelandic krona and they then can buy property, agricultural land and productive businesses at incredibly cheap prices.

Not something to get excited about but important to be aware of economic history and economic reality.
 
I have read a good few articles in the personal finance sections of the daily/Sunday newspapers advising investing in gold and they mention investing in a Gold ETF(Exchange Traded Fund).

How can I buy into one of these funds? Online broker? Are they listed through the Irish stock exchange? What is he minimum amount that can be purchased?
 
If you want to buy some gold - and I would recommend this - then the best way to do it is through Goldmoney.com or Bullionvault.com.
 
Yes, Either of thse websites. Very recommended. Buy the physical asset. Too late for gold ETFs without being exposed to some risk by the sellers of those ETFs.

Also, keep a close track on gold by listening to Larry Edelson on MAM-TV. www.moneyandmarkets.com Gold will hit €2500, i.e. inflation adjusted high, he says, before end of 2010.
 
Agree with u Pennyscraper re ETF's - way too much counter party risk and also 0.5% charge per annum, broker fees and stamp duty make it pricey way too own gold, especially for medium to long term.

Digital gold is not a bad way of owning but one also has significant counter party risk, nationalisation risk and the not insignificant risk of their massive dependency on technology. Digital gold is entirely dependent on the interface with a website and one cannot take delivery of one's gold (important option to have in the current climate).

Best not to have your golden eggs in any one basket and to own physical gold like gold bars or coins in an allocated account, safety deposit box or hidden away in the attic (with home insurance)!
 
george.shaw said:
ps re the comment: "How, practically speaking, would gold insure you against hyperinflation? Can you get your gold bars and melt them down into little pieces and start bartering for your dinner??"

Gold is the only thing that protects people in deflation (1930's America) and hyperinflation as people in Germany in 1920's and throughout history have experienced.

Those who invested in gold in Zimbabwe and in Iceland today have been protected from economic meltdown. Gold has risen 1000's of percent in Zimb and in our neighbours to the north gold has risen by more than 200% in Icelandic krona in the last few months.

People in these countries who have invested in gold can sell their gold (gold is highly liquid unlike property) and get Euros, dollars or icelandic krona and they then can buy property, agricultural land and productive businesses at incredibly cheap prices.

Not something to get excited about but important to be aware of economic history and economic reality.
Click to expand...

So when was gold proven to be a good hedge in Irish economic history?
 
Askar said:
So when was gold proven to be a good hedge in Irish economic history?
Click to expand...

To be honest, in past decades before the joining of the EU, I don't think Ireland was as prosporous as other countries and, for most, investments weren't really on the agenda as much.

Regarding Gold, I have a portion of my portfolio in gold but not physical. I went for the riskier, potentially more rewarding option of purchasing shares in one of the Gold miners.
 
I enjoyed reading this thread, some great comments were made, not least the comment that all the gold in the world would fit on the centre court of Wimbledon. Wow.

A lot of posts say gold is a good investment at its current price. I'd like some reasons for this to be put forward by those who say gold is currently undervalued.

If we had high inflation , it would be a good hedge against inflation.
But we don't have high inflation.

If we bought in a currency which is going to lose value relative to other currencies (like sterling did last year), then it would be a good idea to buy gold.
But it's not possible to predict the falling relative value of a currency in advance.

To say gold is a good investment is to also say gold is undervalued at it's current price. Could someone explain why is gold undervalued at it's current price ?

Also Gold has risen a lot in the past few years. Why should it rise further ? Could there be a gold price bubble ? It's maybe like someone in Dublin in 2006 saying house prices have risen 10% every year for the past 10 years, therefore they will rise 10% in 2007.

I can't see any evidence that gold is undervalued. It is priced at a level the market thinks it should be priced at. It could go up or it could go down depending on factors which are not knowable in advance. As soon as these factors become known, the market will reprice it.
 
Hi Everybody,

I am serioulsy thinking about buying gold as well. The site I'm looking at is GOLD.IE. Has anyone ever used this site to buy their gold? If so, what was you experinence?

Any tips or suggestions greatly welcomed.

Thanks,

UptheDeise
 
Never used Gold.ie but have never heard any complaints and they are respected internationally (featured in FT, WSJ, Bloomberg, CNBC and BBC).

re So when was gold proven to be a good hedge in Irish economic history?

Those lucky enough to own gold since the foundation of the state have done well. As gold was fixed at $22/oz and then $35/oz until 1971 meaning that those who held gold were not subject to the fall in value of the punt. (or falls in stock markets and occasional falls in property markets).

In the stagflationary 1970's gold protected Irish investors when stock and property markets were not performing well.

Last year gold was up 8% in Euros and the ISeq was down by more than 60%.

Similarly in the last 5 years gold is up in euro terms some 100% and the Iseq is down by more than 55%.

Gold remains undervalued. Gold rose by more than 2,400% (from $35 to $850 or up X 24 times) in the 1970’s . Should a similar bubble form now gold would have to rise from a low of $250 in 2000 to over $6,000/oz in the coming years.

Gold is one of the few things in the world that can still be bought at the same nominal price it was in 1980. As ever it is crucial to adjust for inflation and gold would have to rise to over $2,400/oz or €2,000/oz in order to just reach the price it was in 1980.
 
do ye not think that ye are late to the party. gold has been making lower highs since it hit 1035 an ounce last year. deflation will bring this price down , not up
 
In a conventional bout of mild deflation gold might fall but when we have the risk of a global financial and economic crash and huge systemic risk it is highly unlikely gold will fall. Even in the Great Depression it was revalued from $20/oz to $35/oz or some 70% while the Dow Jones fell some 90% peak to trough.

Smart money believes gold, silver, platinuim and diamonds is going higher:

CNBC: Where to Invest in Times of Distress?
http://www.cnbc.com/id/15840232?video=1004555064&play=1
 
PaddyBloggit said:
33cl ..... how do you buy gold? etc.
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I used goldmoney.com where you can buy bullion (measured in what they call 'goldgrams') which is in turn apparently stored in secure vaults in London. It's very liquid aswell so turning it back into Euros is quick & easy if you want out. Re the storage fees they currently charge 0.302 'goldgrams'/month. so you are in essence gradually losing your gold amount but this is offset by the rise in the actual gold price. This is the 1 thing I dont like about their service but I'll put up with it so long as gold prices are on the rise in general. The current price per 'goldgram' I think is €21 so that's €7/month in fees. they also charged me a flat 3.3% 'deposit fee' or something on my purchase (no charge if I decide to sell). Check with them on this as it is a hefty enough fee and it may have gone up since I bought...amounted to about €1000 which was deducted from my total purchase.
 
33cl said:
I used goldmoney.com where you can buy bullion (measured in what they call 'goldgrams') which is in turn apparently stored in secure vaults in London. It's very liquid aswell so turning it back into Euros is quick & easy if you want out. Re the storage fees they currently charge 0.302 'goldgrams'/month. so you are in essence gradually losing your gold amount but this is offset by the rise in the actual gold price. This is the 1 thing I dont like about their service but I'll put up with it so long as gold prices are on the rise in general. The current price per 'goldgram' I think is €21 so that's €7/month in fees. they also charged me a flat 3.3% 'deposit fee' or something on my purchase (no charge if I decide to sell). Check with them on this as it is a hefty enough fee and it may have gone up since I bought...amounted to about €1000 which was deducted from my total purchase.
Click to expand...


I don't think this is a good deal. What happens if Gold prices crashes? You'll lose some amount money if you ask me.
 
Gold unlikely to crash and surged today on first day of Obama Presidency - up some 3% and Dow Jones fell 4%:
METALS STOCKS Gold rises on worries recession will deepen
[SIZE=-1]MarketWatch - 1 hour ago
http://www.marketwatch.com/news/sto...1815-FB50-4E46-AD35-C56D9C99F435}&dist=msr_10[/SIZE]
[SIZE=-1][/SIZE]
[SIZE=-1]Best to get real physical gold as per the advice of these smart gentlemen on CNBC:
Where to Invest in Times of Distress?
http://www.marketwatch.com/news/sto...1815-FB50-4E46-AD35-C56D9C99F435}&dist=msr_10[/SIZE]
 
33cl said:
Re the storage fees they currently charge 0.302 'goldgrams'/month.
Click to expand...

Are you sure that's right. I have an account with www.goldmoney.com and the fees are minimum 0.1 goldgrams per month or 0.15% per annum, whichever is higher. So far I have found them very good to deal with, and opening an account was straightforward.

I'm not in any way affiliated to goldmoney, except for being a satisfied customer.
 
David McWilliams warns of potential hyperinflation in America and says that gold "is the only real hedge against hyperinflation" in the Irish Independent today.

All this implies that Obama could quite conceivably preside over a period of hyperinflation. Today this seems impossible but he has inherited such a mess from George Bush and his political need to get the economy going, if he is to deliver on some of his immense promise, might just prove too much. Don't take my word for it, just look at what is happening to the price of gold -- the only real hedge against hyperinflation.

Economic theory would suggest that after a period of hyperinflation, where all old US debts are wiped out and lenders to the America robbed, the dollar revalues as America reindustrialises under the green job agenda talked about by Obama.
History could well look on the end of the first decade as not just a momentous era which produced the first black president, but as a period of dramatic economic change. The debt-fuelled boom of the Noughties, leading to a rapid deflation and failed banking bailouts at the end of the decade, giving way to hyperinflation, which ultimately cleaned up the US's balance sheet. Sounds fanciful? But then again, so, too, did a black president not so long ago.

http://www.independent.ie/opinion/c...eds-to-run-up-a-frightening-debt-1608220.html
 
Micheal Maloney has an interesting book, Guide to investing in gold and silver, he reckons silver will outperform gold.
 
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