Investing in Gold

[Peter99]

I believe this was covered in the forum some time ago but what is the current thinking of the best coins to invest in for a small investor, say like myself initially say GBP15k ($18k)?
I am tempted towards the US Eagle or Krugerrand or Britannia.
My interest has been aroused having discussed with a friend who believes with current wars possibly escalating gold is now underpriced and should be invested.

[brandrea]

I guess it depends. If your talking gold bullion, I wouldn’t bother with the physical metal I’d just buy the paper (provided the holder has the physical gold to match).

If you’re talking coins, I have no experience in which ones appreciate more.

Personally, I’m invested in a small way in the gold miners. They have more torque to the spot price of gold and some of them pay a nice dividend while you wait.

[WilsdorfNDavis]

Mods...move this thread?

[Chewbacca]

Gold is a terrible investment.

[beshannon]

Originally Posted by Peter99

My interest has been aroused having discussed with a friend who believes with current wars possibly escalating gold is now underpriced and should be invested.

With inflation coming down I am not sure it is a good time to be putting capital into inflation hedges

[pearson1995]

Not really a Rolex topic but I do have an opinion on this topic. My rules if you will, not financial advise of course:

1) Gold should be owned by everyone in small quantities as a safe storage of value.
2) If you don't own the physical gold, in my opinion it doesn't count. Just as these crypto sites are going bankrupt and everyones crypto goes with it, if you don't own the gold, if the companies holding your gold disappear what happens to your gold? In crypto the saying is not your keys, not your crypto. With gold I say not in your hand, not your gold.
3) Inflation will cause gold price to rise, but it doesn't provide a rent or dividend, don't view it as a way to make money, view it as a safe way to store money.
4) If something doesn't give a rent or dividend, can you still make money on it? Can you make money buying a daytona at retail? Of course, if its under the true current market value, if it corrects you can sell and make money. Do I personally believe the price is below true market value, yes, but you have to make your own judgement on that
5) What type? Try and stick to pure gold, and if not, british sovereigns. Britannia's are may favourite to stack.Security stamped and imo the best looking and safest current way to buy physical gold, small premium too. Royal mint or chards are a few websites to buy from
6) Don't buy special commemorative coins or specific years. If you are buying purely for the gold content, it doesn't matter.
7) When you buy you will pay over market price, and when you sell, you will be offered under market value, only by a few % but accept it. In the long run, if it goes up 50% +, it won't matter
8) Don't tell anyone... and store it where no one will find it.
9) Hold for many years, unless the prices go crazy, think of it like a boring blue chip stock, not a penny stock. Hold for 15 years minimum.
10) Little and often, average your costs over time. An ounce or two a year, or whatever you want to obtain, and be consistent. Don't buy it all in one go.

[minute_man]

I occasionally buy gold sovereigns from my local bank whenever it doesn't feel like a total rip-off I always regard them as "money not totally down the drain" rather than an investment.

[Redfoot]

Definitely stick with sovereign minted coins, purchased from a reputable dealer- Brittanias, eagles, maples, Krugs, Austrian Philharmonics, etc. Premium (amount over spot price paid) will be a little higher, but will hold resale a little better and carry additional security and anti-counterfeit measures.

Gold is not a get rich quick (or get rich at all) move, but it does offer a sense of security and store of value. Silver also offers similar attributes, at a lower investment point and arguably greater chance of increased value over time.

Do some research, and trust your gut- if it feels right for you, make some introductory purchases and see how you feel after!

[LobsterHunter]

Seems like American Eagles are commanding the highest premiums --by far-- at least in the area I was looking in the last week (Texas). The premium on Australian Perth or Canada Maple Leafs is much less. If just going for gold content, I don't see why anyone would choose American Eagles unless for whatever reason they're more liquid (I doubt it). I even found an independent dealer who was discounting Maple Leafs by $25 if they had minor scuffs or scratches, so that might be something to ask about.

[Mifune]

for physical Metals, which is what I suggest, be sure to shop wisely.

The margins vary widely.

bullion pricing

[MILGAUSS88]

As Brandea mentioned if you are looking for the best return, gold mining stock is superior.
If it costs $1,000 and ounce to mine and the market is $1,200 the miner's profit is $200.

If you buy the gold at $1,200 and it goes to $1,800, you have made a 50% return.
The miner on the other hand has seen his profits go from $200 to $800, a 400% increase.
Presumably the stock will go up accordingly.

If you want the physical gold I would suggest buying whatever has the lowest premium. I see you are from London. I am guessing Sovereign's or other European gold coins would be the easiest to buy. In the USA, I have often seen gold Sovereign's and Swiss Francs with a low premium.

[Wcdhtwn]

Pros will say to invest in the miners, don’t buy the bullion, if you want to invest in gold. I don’t know they are correct, and don’t know they are wrong.

[macrowatch]

For such a small investor size, it's really, really not worth the allocation.

Physical gold is for end of the world spending money. Utility bill hard to pay in gold coins.

Look at gold stocks reacting to WW1 or WW2. Still hugely under performs as an investment.

[pickettt]

Originally Posted by Chewbacca

Gold is a terrible investment.

That’s what Goldman Sachs said while they were buying it in record amounts.

[LobsterHunter]

I look upon keeping gold coins in your personal possession (e.g. under your mattress) not as an investment but more as insurance. If your country's currency becomes worthless due to catastrophic inflation (think Venezuela in the last 6-8 years), the gold coins can be used as barter for essentials such as food, gas, medicine and supplies. And in that case the lower denomination coins would give flexibility. Trying to barter a 1-oz coin is like buying groceries with a $2000 bill. Whereas using a ⅒-oz coin is like using a $200 bill. Crude analogy but something to think about.

[Lawman77]

I have 4 gold bricks now. Aiming to acquire a 5th. I store two in my Brown Damascus Chronos Safe and keep the other two in my Goyard duffle.

[huncho]

Originally Posted by pickettt

That’s what Goldman Sachs said while they were buying it in record amounts.

factually it's not a wrong statement at least if you look at it from 2007-today. that was the top of the last "bubble" and includes 3 historic crashes. it's underperformed the s&p in every possible scenario over the last decade and including this year which has had record 40 year inflation, russia invading ukraine and getting completely cut off from the western world, multiple currencies collapsing (ruble, gbp, euro), and both the stock and bond markets collapsing. this year had every possible scenario that was supposed to benefit the price of gold, or push the narrative of gold being a "safe haven", yet you would've been better off buying the s&p or apple stock

read a headline today that said gold rallies hard on signs of inflation easing. most ironic statement ever lol, that's what tech stocks do

[pickettt]

Originally Posted by huncho

factually it's not a wrong statement at least if you look at it from 2007-today. that was the top of the last "bubble" and includes 3 historic crashes. it's underperformed the s&p in every possible scenario over the last decade and including this year which has had record 40 year inflation, russia invading ukraine and getting completely cut off from the western world, multiple currencies collapsing (ruble, gbp, euro), and both the stock and bond markets collapsing. this year had every possible scenario that was supposed to benefit the price of gold, or push the narrative of gold being a "safe haven", yet you would've been better off buying the s&p or apple stock

read a headline today that said gold rallies hard on signs of inflation easing. most ironic statement ever lol, that's what tech stocks do

Two points: gold is not a traditional investment. Sometimes it shows some traits an investment, but that’s not what it is, and not what it’s for. It’s a hedge, which I interpret as an investment in your buying power. Next, I thinks it’s clear that the prices of both gold and silver are being manipulated and being held artificially low. We could ask and answer why, but I feel I’d be banging my head against the wall

[huncho]

Originally Posted by pickettt

Two points: gold is not a traditional investment. Sometimes it shows some traits an investment, but that’s not what it is, and not what it’s for. It’s a hedge, which I interpret as an investment in your buying power. Next, I thinks it’s clear that the prices of both gold and silver are being manipulated and being held artificially low. We could ask and answer why, but I feel I’d be banging my head against the wall

sums up how i feel about everything this year, but yeah that was my point. it's supposedly a hedge against inflation and apocalyptic times, yet we've basically had both this year and it hasn't been that at all. i'm not entirely sure what its purpose is anymore in today's world but when your money is safer in apple stock than gold for most of the last 12 months something weird is going on. i think these days there's just too much leverage everywhere and it eliminates the logic behind assets and what their values should come from

[Easy E]

Originally Posted by pickettt

That’s what Goldman Sachs said while they were buying it in record amounts.

Originally Posted by pickettt

Next, I thinks it’s clear that the prices of both gold and silver are being manipulated and being held artificially low. We could ask and answer why, but I feel I’d be banging my head against the wall

Wasn't there a couple of guys on the GS gold desk team recently arrested for price manipulation?

[Easy E]

I'm going to blow this thread to pieces with this question, but here goes: What happens to the price of gold if the US goes back on the gold standard?

[huncho]

Originally Posted by Easy E

I'm going to blow this thread to pieces with this question, but here goes: What happens to the price of gold if the US goes back on the gold standard?

well would that even be possible? i don't think so lol

[Redfoot]

^^^ I don't believe there has been enough gold mined in the history of civilization to convert USD back to gold standard.

The manipulation of gold and silver markets has been in the news lately- Goldman Sachs caught some heat, but really nothing more than a smack on the hand.