Borrowing to Buy Gold & Silver.....

Roonbox

I expect a similiar response to the guy who posted that he was borrowing to buy Bank Of Ireland Shares -

I intend to borrow 25k in the the very near future to invest in Gold and silver.

I also intend to do it through spread betting -


and to leverage it.........


What does anyone think??

Roonbox

Roonbox wrote: »

I expect a similiar response to the guy who posted that he was borrowing to buy Bank Of Ireland Shares -

I intend to borrow 25k in the the very near future to invest in Gold and silver.

I also intend to do it through spread betting -


and to leverage it.........


What does anyone think??

why would you trust a 25k investment to random people on the internet?

Roonbox

Spread betting is monitered by the financial regulator -

Worldspreads has floated recently although I'm not sure if i'll use it yet.


Ill probably opt for IG Index

dunkamania

Spreadbetting is a quick and easy way to get certain financial exposures, unfortunately it is expensive, you are going to pay in the region of 7%pa even if your exposure is less than your cash on deposit.

As far as gold goes, I would be a seller of it rather than a buyer at this stage

Roonbox

How am I going to pay 7% per annum exposure?

Roonbox

Also - Its more silver than gold im interested in. Have been researching it for past 6 months - reading articles - Following interviews with Peter Schiff - Jim Rogers -


Im now convinced Gold and Silver can only go up in the meduim term - say 2-5 yrs -

dunkamania

I believe spreads are adjusted for interest costs, which I wouldd expect to be in the 7% region.

If you are looking at a 2-5 yr horizon, you should be looking at futures or etf's for your exposures

Roonbox

You may be correct but using a spread is tax free so even with 7% its still a saving -

Genco

Roonbox wrote: »

You may be correct but using a spread is tax free so even with 7% its still a saving -

How much of a saving would that 7% be if the price goes the other way

Roonbox

True - But does anyone have an opinion on Silver or Gold???

Does anyone see value at the moment or is it just me??

Regarding the Bank Of Ireland thread - I thibk you'd be insane to invest in any
financial institutions for the next while -


for the next few years if Im honest.

Poncherello

I would be very bullish precious metals over your time horizon, in fact I think we may see panic buying in the coming 18 months.

BUT spread betting is not the way to play it. Unless you can afford to lose the 25K - where will you place your stops and what sort of tick size will you take on ??

Roonbox

Silver currently at 17 - ill place a stop at 14 -
Gold is at 9.20 - Ill have a stop at 850
I dont see either going below that -

I know they easily might but Ill be left with enough to come back in later if they drop much below that -

I'm counting on what your saying - Panic Buying


Basically I can see chaos in the coming 2 yrs and the safest place be-

better than that - the best investment opertunity lies in Precious metals -

especially silver.

Im spread betting because I want to leverage it

say all 25,000 on silver at 17 -

Ill leverage it to 10 dollars -

So if silver makes it to 27 - my balance is 50,000

and if it go to 7 - My balance is Big Fat Duckegg -


I see silver going a lot higher than 27 -

Poncherello

Be careful my friend. 850 in Gold is a big physchological level for a lot of speculators. There is no reason it will not trade back down there to shake people like yourself out.... before it resumes on its upward trend.
The same can be said for silver in or around 14.

Its a big risk to take, but as I said I agree with your view

Minder

Silver has a dual role - a precious metal and an industrial metal - have you considered the detrimental effect on silver prices if there is less industrial demand? As a haven of safety, gold has always been the favoured investment in precious metals.

Roonbox

Its the dual role in silver that has me interested in it.

Silver has tended to follow gold as a haven.

Coupled with that stockpiles are at their lowest ever!!

Poncherello

Roonbox is right, silver will trade higher with Gold and supplies are at all time low. Industrial demand for silver is not necessarily correlated with economic growth such as copper might be.

Silvers all time high is approx $50 Gold is $1000 odd whatever it hit earlier this year.

Silver has a long way to go on the upside. My call is that Gold will go to the moon and investors/speculators/taxi drivers will feel it is too overbought and buy silver instead for the same protection thus sending it to all time highs.

Attended Jim Rogers seminar earlier this year and he tipped Silver & Sugar as two commodities with best upside potential.

Minder

Poncherello wrote: »

Silvers all time high is approx $50 Gold is $1000 odd whatever it hit earlier this year.

The previous catalyst for silver hitting $50 was a little exercise carried out by the Hunt Brothers - when it was discovered that they had tried to corner the market, the rules were changed and the price collapsed.

The point is that silver at $50 was an extraordinary event - a set of circumstances that haven't been repeated. So for silver to take a moonshot, another extraordinary event needs to happen, what will be the catalyst this time?

Poncherello

the collapse of the dollar as the worlds reserve currency ....


BTW the inflation adjsusted highs for both commodities are far higher than the numbers mentioned above

SoCal90046

Roonbox wrote: »

I expect a similiar response to the guy who posted that he was borrowing to buy Bank Of Ireland Shares -

I intend to borrow 25k in the the very near future to invest in Gold and silver.

I also intend to do it through spread betting -


and to leverage it.........


What does anyone think??

Here's my two cents (keep the change!)

I hope you get similar, cautionary responses to BOI guy! Your challenge will be what happens if the price drops. If it drops, you no longer have collateral, but you still have a loan. Gold will drop.

Think of this. When Elizabeth the First reigned, an ounce of gold would buy a man a suit of clothes, a fine pair of shoes and a hearty meal. Today, with Elizabeth the Second reigning supreme, an ounce of gold affords a man a suit of clothes, a pair of shoes and a Happy Meal. (I don't have access to pricing of women's clothing during the Elizabethan period--sorry!) Gold just about tracks inflation but only when it hits its peak price. Gold is, simply put, a terrible investment. Gold will drop in price. You're betting that you can guess when. I'd think it through; you're doubling your risk and, from an historical perspective, not really looking at much in the way of an award.

In my opinion, gold belongs in your teeth, in electronic circuits, in jewelry and in catalytic converters; it has no place in a serious investment portfolio.

Minder

Poncherello wrote: »

the collapse of the dollar as the worlds reserve currency ....


BTW the inflation adjsusted highs for both commodities are far higher than the numbers mentioned above

...and the collapse of the dollar will have no effect on the industries that use silver?

Poncherello

SoCal90046 wrote: »

Here's my two cents (keep the change!)

I hope you get similar, cautionary responses to BOI guy! Your challenge will be what happens if the price drops. If it drops, you no longer have collateral, but you still have a loan. Gold will drop.

Think of this. When Elizabeth the First reigned, an ounce of gold would buy a man a suit of clothes, a fine pair of shoes and a hearty meal. Today, with Elizabeth the Second reigning supreme, an ounce of gold affords a man a suit of clothes, a pair of shoes and a Happy Meal. (I don't have access to pricing of women's clothing during the Elizabethan period--sorry!) Gold just about tracks inflation but only when it hits its peak price. Gold is, simply put, a terrible investment. Gold will drop in price. You're betting that you can guess when. I'd think it through; you're doubling your risk and, from an historical perspective, not really looking at much in the way of an award.

In my opinion, gold belongs in your teeth, in electronic circuits, in jewelry and in catalytic converters; it has no place in a serious investment portfolio.

That is a funny statement
Do you happen to work in the Pension Fund arena
Since 1999 Gold has risen approx 400%
Equities in the US are approx 5% higher and their counterparts in Europe are 5% lower.

Gold rises during periods of inflation, deflation,stagflation, terrorist attacks, natural diasters .........


Terrible portfolio protection I tells ya

Minder

Roonbox wrote: »

Silver currently at 17 - ill place a stop at 14 -
Gold is at 9.20 - Ill have a stop at 850
I dont see either going below that -

I know they easily might but Ill be left with enough to come back in later if they drop much below that -

I'm counting on what your saying - Panic Buying


Basically I can see chaos in the coming 2 yrs and the safest place be-

better than that - the best investment opertunity lies in Precious metals -

especially silver.

Im spread betting because I want to leverage it

say all 25,000 on silver at 17 -

Ill leverage it to 10 dollars -

So if silver makes it to 27 - my balance is 50,000

and if it go to 7 - My balance is Big Fat Duckegg -


I see silver going a lot higher than 27 -

Did you pull the trigger and buy at $17?

Roonbox

Not yet - Im hoping to buy at 14 in the next few days -


*shudder

Genco

Average gold price for year V Mid Year DJIA for anyone interested ..... no idea how to make a table on the forums

(figures for gold are average for year / djia are taken at 1 July)

Year Gold DJIA
1930 20.65 204.9
1940 33.85 132.64
1950 34.72 226.36
1960 35.27 580.14
1970 36.02 760.68
1980 615.00 932.42
1990 383.51 2452.48
2000 279.11 8847.56
2005 444.74 10568.7
Current 818.00 11739.53

Poncherello

Its trading 14.67 been as low as 14.00 - you will do very well to get it any lower
Genco - whats point of your figures ?

Genco

Purpose of the figures was to try to help put some perspective on previous comments made ..... eg all time high for silver was completely distorted by Bunker Hunt other comments picking out a specific point in time for Stock Exchange Index Growth versus Gold over the same time is equally distorted.

Poncherello

fine but whats your point
Are you saying to the Op that he/she would be better off buying the Dow ??

Minder

Anyone give any creedence to the arguments that silver price is suppressed by huge net short positions? Positions that could never be delivered against and so will have to unwind at some point?

Genco

Poncherello wrote: »

fine but whats your point
Are you saying to the Op that he/she would be better off buying the Dow ??

I am saying that he/she would be best off avoiding taking any action based on comments that point to either:

a) a deviation from all time high of €50 that neglected to point out that this was in a massively distorted marketplace, or

b) are based on performance against equity markets over a period of time that has been selected with a level of bias.

Roonbox

Minder wrote: »

Anyone give any creedence to the arguments that silver price is suppressed by huge net short positions? Positions that could never be delivered against and so will have to unwind at some point?

Completely agree with that, Have read as much as I could find on it and I believe its all about to unwind -

Im changing tac a little on this, not leveraging so much - 25k on Silver at 15,
leveraged at 2.5k per 1dollar,

That leaves me some breathing room, I dont want to have to be keeping an eye on this constantly.

Waiting on word of the money today - Hope to get in at 14/15 .

Minder

Roonbox wrote: »

Completely agree with that, Have read as much as I could find on it and I believe its all about to unwind.

In your research, have you considered how long these arguments about short covering in Silver have been kicking around - they may be new to you - and because they are new to you, you believe that the short squeeze and moonshot in silver prices is imminent. But this idea is many years old - I first read about it when Silver prices were at $5 an ounce (not that many years ago) but the imminemt moonshot has yet to happen.

Another consideration you need to make before committing all your available funds - your chosen spreadbet company have a margin requirement that may change without warning - if you cannot meet the margin requirement, you will have to cash out your trades to raise funds. Fine if you are on the winning side of the bet....

Have you considered using guaranteed stops? The market in silver is tiny and very volatile - when the price slips, it moves very fast. Like today.

Another consideration - instead of all in at £25 a point, build your position up slowly - so for example £5 a point at $11.06, another £5 if the price moves up to $12, another £5 at £13 etc - using the gain on each winning position as margin for the next.

Lastly, silver spot prices are down 140 points as i write, what criteria will you use to choose your entry price?

Genco

Did you end up in at 14/15 ?

Spectrum48k

When the dollar and equities slide money moves into commodities, a see saw effect. Metals being part of the commodity market.

As a suggestion guage where the dollar:euro rate and global equities will be over the next two years. This will indicate where silver and gold will be.

If you reckon the dollar will go back out to 1.60+ against the euro and equities will stay at or below current levels, then metals could be a good long term investment.

As for spread betting, markets are very volatile at present. Your positions could get closed out at a loss before you know it.

Roonbox

Thankfully i didnt get in at 14, Im sitting waiting, will prob get in at 10, but with no leverage, Ive been lucky I think.

Rocket!

As a matter of interest did any of you short gold or silver in the recent slide?

Genco

Glad to hear you didnt buy at those levels Roonbox

Roonbox

Just an updsate on this post -

i waited a bit and got in at 10.00 with 35k instead -

Im feeling very optimistic about this one -

silverharp

Roonbox wrote: »

Just an updsate on this post -

i waited a bit and got in at 10.00 with 35k instead -

Im feeling very optimistic about this one -

You should do ok, I'd expect silver to outperform gold for during Q1 , if the whole "reflation" gig is running out of steam I'd switch back to gold or just take profits. Gold assets will do better in a credit contraction

hedgeh0g

Anyone any comments on recent gold prices?

silverharp

hedgeh0g wrote: »

Anyone any comments on recent gold prices?

yeah its been great , most of my gold stocks doubled since I bought in Oct. Took some profits last week

There maybe a switch now from gold to commodities like oil and the stock markets for the next month and a bit

thebang

silverharp wrote: »

yeah its been great , most of my gold stocks doubled since I bought in Oct. Took some profits last week

There maybe a switch now from gold to commodities like oil and the stock markets for the next month and a bit

Why do you think oil will rise?

silverharp

thebang wrote: »

Why do you think oil will rise?

It seems like a top is in for gold for now, so if the fear trade fades then money will flow back into commodities. I also noticed a divergence in natural gas where the commodity made a low but the NG stocks held thir Jan lows, which is evidence that a turn maybe coming.
its only a swing type trade though I wouldnt be long commodities after March