Investing Savings in Gold

Killer Pigeon

Hello there,

I'm concern that the €uro may collapse at some point in the future. I want to invest my savings in Gold so that my savings won't be effected.

Is this a good idea?

If so, how might I go about purchasing gold bullions? Say I wanted to invest €100,000.00 in Gold. Can I keep them at home? And when I want to sell them again when the crisis blows over, how do I go about selling them, and to whom.

I don't think I'd trust buying the gold over the internet, as I'm sure there are plenty of scams out there.

Thanks for you help.

KP.

mr.mickels

search online for gold traders in Ireland, UK and Europe, you will find many that will be delighted to deal with you. If you are collecting it yourself in person to keep at your home, there isn't alot to it, other than getting a good price (and avoiding the highwaymen on the journey!!!). Those whom you choose to buy it from will likely be happy to buy it back from you in the future.

irishh_bob

Killer Pigeon wrote: »

Hello there,

I'm concern that the €uro may collapse at some point in the future. I want to invest my savings in Gold so that my savings won't be effected.

Is this a good idea?

If so, how might I go about purchasing gold bullions? Say I wanted to invest €100,000.00 in Gold. Can I keep them at home? And when I want to sell them again when the crisis blows over, how do I go about selling them, and to whom.

I don't think I'd trust buying the gold over the internet, as I'm sure there are plenty of scams out there.

Thanks for you help.

KP.

here are two bullion dealers i have dealt with

goldcore

goldbank

both are based in dublin , 100k will buy you two gold bars and the balance in coins , i keep mine at home

skibum

irishh_bob wrote: »

both are based in dublin , 100k will buy you two gold bars and the balance in coins , i keep mine at home

Jeasus, if I had large amounts of gold at home, I wouldn't be broadcasting it on the net

Cavanjack

irishh_bob wrote: »

Killer Pigeon wrote: »

Hello there,

I'm concern that the €uro may collapse at some point in the future. I want to invest my savings in Gold so that my savings won't be effected.

Is this a good idea?

If so, how might I go about purchasing gold bullions? Say I wanted to invest €100,000.00 in Gold. Can I keep them at home? And when I want to sell them again when the crisis blows over, how do I go about selling them, and to whom.

I don't think I'd trust buying the gold over the internet, as I'm sure there are plenty of scams out there.

Thanks for you help.

KP.

here are two bullion dealers i have dealt with

goldcore

goldbank

both are based in dublin , 100k will buy you two gold bars and the balance in coins , i keep mine at home

Is that safe? Is it insured? What's your address?

anticonno16

skibum wrote: »

Jeasus, if I had large amounts of gold at home, I wouldn't be broadcasting it on the net

Sure I have 3 gold bars, coins and three twix bars under my mattress.

Fairly common.

Gold will hit 2k in 12-18 months.

kadman

anticonno16 wrote: »

Sure I have 3 gold bars, coins and three twix bars under my mattress.

Fairly common.

Gold will hit 2k in 12-18 months.

If i had gold under my mattress............i,d be in some one elses bed:D:D

kadman

mr.mickels

irishh_bob wrote: »

here are two bullion dealers i have dealt with

goldcore

goldbank

both are based in dublin , 100k will buy you two gold bars and the balance in coins , i keep mine at home

Well done well done. Where is home exactly...and what nights of the week are you likely to be out?:cool:

irishh_bob

skibum wrote: »

Jeasus, if I had large amounts of gold at home, I wouldn't be broadcasting it on the net

my name is james bond , i live in whatever woman i find willing

there , gave my adress away

johngalway

I know past performance isn't a reliable indicator, but I would look at the graph which shows gold performance from 1970 until now.

There's a huge spike around 1979/80 then a massive fall followed by relatively static pricing until some time around 2007/8 (I don't have the graph open in front of me). Then there's another even bigger spike.... which is uhm, now.

If it were my money, and I appreciate it isn't and other people view things differently, I wouldn't sink it into Gold. I think it's in a bubble. It may well indeed have further to rise, I won't argue against that, but I'm thinking of the fall and the last time that happened it took someone buying in 79/80 about 30 years to break even.

The Outside Agency

Just incase anyone thinks it's a good idea to store large amounts of gold and/or silver at home, check out the story of 1 man who decided to invest his life savings of $750k in silver and store the bars at his home...

Robbed at gun point of course

story here

SyntonFenix

johngalway wrote: »

I know past performance isn't a reliable indicator, but I would look at the graph which shows gold performance from 1970 until now.

There's a huge spike around 1979/80 then a massive fall followed by relatively static pricing until some time around 2007/8 (I don't have the graph open in front of me). Then there's another even bigger spike.... which is uhm, now.

You need to do more homework there. You're basing your comment on a chart, what are the reasons behind the chart? The reasons for gold price rises and collapse in 1980 are different to today.

When you see those "We Buy Gold" shops selling gold bars and coins, then that's a good indication it's a bubble.

Cavehill Red

Financial advisors worth their salt will tell you that a balanced investment portfolio should have precious metals exposure in it.
Some fear a bubble given recent rises, while others fear the fact that, especially with silver, the market can be extremely choppy on occasion.
My suggestion is to look at the alternatives. Stocks and bonds are not performing, nor are most of them likely to until the global economy finds a way to recover. Most fiat currencies are heading for zero in a race to the bottom, and the euro's current problems indicate that a) the OP is right to be concerned about its long-term stability and b) it's winning that race right now.
I wouldn't stick all the eggs in one basket, but some exposure to PMs is a good idea in the current climate. If someone intends to buy and hold PMs at home, then they need to a) STFU about it to EVERYONE and b) have them in a highly secure place that cannot be discovered.
An alternative is to invest in PMs via a firm like Goldmoney or Bullionvault. These are PM holding and trading firms which offer the most secure method of possessing PMs without actually having them in your hand (which isn't so secure, really).
AVOID ETFs and don't invest in miners unless you know the market. ETFs are paper metal, not backed up by sufficient holdings. There is estimated to be at least 100X the actual available amount of silver worldwide being traded in ETFs currently. If the SHTF, how confident would you be of being the 1% to be given money rather than magic beans when you want to trade out?
Hence, for very large investments, I'd suggest using something like GM or BV.

Full disclosure: I have some gold and silver physically, not at my personal address but somewhere safe that only I can access. I also have a BV account.

Grecco

Talk about all the eggs in one basket, don`t do that. There are more Commodities other than Gold!
And Besides, it looks like a bubble

stackerman

If you don’t like gold and silver, you like the prospects for fiat paper currency.  With a world that’s tens of trillions of dollars in deficit and can’t service the existing debt, the case for fiat paper currency is zero.  You can’t make a case for it.
Great time to buy at the mo IMHO, but I wouldn't put all my eggs in the one basket. But you've got to look at it as a long term story of value, the Market will be very volatile over the next while. Until the powers that be realise the system as it is, is dead.
Most important thing of all though is . . . . Don't buy paper :eek:

Mr. Presentable

anticonno16 wrote: »

Sure I have 3 gold bars, coins and three twix bars under my mattress.

Fairly common.

Gold will hit 2k in 12-18 months.

Maybe, or .5k...........

stackerman

Mr. Presentable wrote: »

Maybe, or .5k...........

The way I see it is this.

If Gold does hit 500 (that's how I'm reading above) then you can be sure that your € will be worth far less. Therefore your gold would be a better store of your savings, not ideal, but better then €. I however don't think (medium to long term) that that is the direction of Gold or silver. The direction at the mo comes from reaction to talk from politicians, off loading of paper gold, and to sell offs due to tax year end in the US. Governments WILL keep printing and so cause inflation, as that is more acceptable (for them) then a deflationary direction. Just my opinion

And if you meant 5,000 . . .
You never know
Gold backed currency some day ? Maybe, but don't bank on it !

Mr. Presentable

keving wrote: »

The way I see it is this.

If Gold does hit 500 (that's how I'm reading above) then you can be sure that your € will be worth far less. Therefore your gold would be a better store of your savings, not ideal, but better then €. I however don't think (medium to long term) that that is the direction of Gold or silver. The direction at the mo comes from reaction to talk from politicians, off loading of paper gold, and to sell offs due to tax year end in the US. Governments WILL keep printing and so cause inflation, as that is more acceptable (for them) then a deflationary direction. Just my opinion

And if you meant 5,000 . . .
You never know
Gold backed currency some day ? Maybe, but don't bank on it !

I meant 500. I think the general acceptance is that gold is a bubble and it's just a matter of when it'll pop.

stackerman

Mr. Presentable wrote: »

I meant 500. I think the general acceptance is that gold is a bubble and it's just a matter of when it'll pop.

Your entitled to your opinion

stackerman

The bottom line is that the money needed to bail out Europe and to fund America’s spiraling debt and future unfunded obligations is in the ten of trillions. IT DOES NOT EXIST. It has to be created by printing money in massive quantities, and despite all the rhetoric you will hear against such policies, in the end it’s the path of least resistance. Printing money is an invisible tax on savings, much easier to initiate, than, say, raising taxes or cutting back on services and entitlements.

SyntonFenix

keving wrote: »

The bottom line is that the money needed to bail out Europe and to fund America’s spiraling debt and future unfunded obligations is in the ten of trillions. IT DOES NOT EXIST.

It might sound absolutely insane to some people, at the moment, that the cash in their pocket may lose half it's value over night, or worse. But that has happened to every fiat currency to ever exist.

In 1980, when the gold price peaked it was around $800, that's around $2000 today. But then again, countries were not in debt for trillions of dollars and printing seriously crazy amounts of paper money backed by nothing.

shangri la

johngalway wrote: »

I know past performance isn't a reliable indicator, but I would look at the graph which shows gold performance from 1970 until now.

There's a huge spike around 1979/80 then a massive fall followed by relatively static pricing until some time around 2007/8 (I don't have the graph open in front of me). Then there's another even bigger spike.... which is uhm, now.

If it were my money, and I appreciate it isn't and other people view things differently, I wouldn't sink it into Gold. I think it's in a bubble. It may well indeed have further to rise, I won't argue against that, but I'm thinking of the fall and the last time that happened it took someone buying in 79/80 about 30 years to break even.

what caused the sudden spike and more importantly depreciation previously?

When gold previously depreciated rapidly what asset class rose? Blue chips?

shangri la

Cavehill Red wrote: »

Financial advisors worth their salt will tell you that a balanced investment portfolio should have precious metals exposure in it.
Some fear a bubble given recent rises, while others fear the fact that, especially with silver, the market can be extremely choppy on occasion.
My suggestion is to look at the alternatives. Stocks and bonds are not performing, nor are most of them likely to until the global economy finds a way to recover. Most fiat currencies are heading for zero in a race to the bottom, and the euro's current problems indicate that a) the OP is right to be concerned about its long-term stability and b) it's winning that race right now.
I wouldn't stick all the eggs in one basket, but some exposure to PMs is a good idea in the current climate. If someone intends to buy and hold PMs at home, then they need to a) STFU about it to EVERYONE and b) have them in a highly secure place that cannot be discovered.
An alternative is to invest in PMs via a firm like Goldmoney or Bullionvault. These are PM holding and trading firms which offer the most secure method of possessing PMs without actually having them in your hand (which isn't so secure, really).
AVOID ETFs and don't invest in miners unless you know the market. ETFs are paper metal, not backed up by sufficient holdings. There is estimated to be at least 100X the actual available amount of silver worldwide being traded in ETFs currently. If the SHTF, how confident would you be of being the 1% to be given money rather than magic beans when you want to trade out?
Hence, for very large investments, I'd suggest using something like GM or BV.

Full disclosure: I have some gold and silver physically, not at my personal address but somewhere safe that only I can access. I also have a BV account.

what would you say is the single safest investment now?

shangri la

If I wanted to hold physical gold in a secure location in Dublin that was easily accessible, possibly a security deposit box who would offer this service?

SyntonFenix

Me!

You could buy the physical gold yourself and put it in a deposit box in the bank of your choice.

hmmm

This is supposed to be a safe place to invest?


This is my favourite graph, remind you of anything recently?

SyntonFenix

hmmm wrote: »

This is supposed to be a safe place to invest?

There's no absolute safe place to invest, all investments carry risk. I'm not a financial advisor or economist and I know that. But anyone can get a chart of any stock price and say the same as you have here.

I don't want to get into a game of chart ping pong, but checking out the following charts expands on your narrow view of a few months. If you bought 1oz of gold at the start of the year you'd be a few hundred US dollars better off.

I would like to know what may make the price of gold fall even further, in the short and long term.

Source: kitco.com, 2011

hmmm wrote: »

This is my favourite graph, remind you of anything recently?

The following video is the best explanation of the current situation for the price of gold that I could find. I think he explains it well.

https://www.youtube.com/watch?v=u52tCCCmKgE

krd

SyntonFenix wrote: »

The following video is the best explanation of the current situation for the price of gold that I could find. I think he explains it well.

https://www.youtube.com/watch?v=u52tCCCmKgE

He's talking nonsense. The paper price is the gold price. It's absolutely absurd to think that the paper prices is falling because there is more of a demand to buy physical gold. There isn't a separate price for both markets.

He sounds like an Irish estate agent just on the cusp of the housing crash.

His talk about a new monetary system requiring gold sounds like utter rubbish too.

coolbeans

While gold may be in a bubble it remains a hedge against extreme uncertainty. As long as the uncertainty remains or increases I think it may be logical to hold onto gold not to make money per se but to protect against deflation or some sort of near catastrophic collapse in the near future. As long as there no light at the end of the economic tunnel in terms of exiting this recession, and let's face it, there isn't I think gold remains a safe option. I am wide open to correction though as I may be too simplistic in my thinking.

SyntonFenix

krd wrote: »

He's talking nonsense. The paper price is the gold price. It's absolutely absurd to think that the paper prices is falling because there is more of a demand to buy physical gold. There isn't a separate price for both markets.

I think you're missing the point and reason for his statement. Every single ETF is not backed by physical gold, they're effectively IOUs. The very same as fiat currency.

Economies and financial institutions around the world are just passing fake, mythical, invisible money around electronically. This is what happened in the Wall St stock market crash of 1929.

An article giving an opinion on ETFs
http://seekingalpha.com/article/281625-how-etfs-have-spurred-the-gold-bubble

Gold ETFs
http://en.wikipedia.org/wiki/Gold_exchange-traded_product

krd wrote: »

His talk about a new monetary system requiring gold sounds like utter rubbish too.

And what makes you think this? From that statement I take it you don't know the history of the US Dollar and what President Richard Nixon did in the 1970s? The history of other fiat currencies? With due respect, I think your statement is rubbish.

SyntonFenix

krd wrote: »

He's talking nonsense. The paper price is the gold price. It's absolutely absurd to think that the paper prices is falling because there is more of a demand to buy physical gold. There isn't a separate price for both markets.

I think you're missing the point and reason for his statement. Every single ETF is not backed by physical gold, they're effectively IOUs. The very same as fiat currency.

Economies and financial institutions around the world are just passing fake, mythical, invisible money around electronically. This is what happened in the Wall St stock market crash of 1929.

An article giving an opinion on ETFs
http://seekingalpha.com/article/281625-how-etfs-have-spurred-the-gold-bubble

Gold ETFs
http://en.wikipedia.org/wiki/Gold_exchange-traded_product

krd wrote: »

His talk about a new monetary system requiring gold sounds like utter rubbish too.

And what makes you think this? From that statement I take it you don't know the history of the US Dollar and what President Richard Nixon did in the 1970s? The history of other fiat currencies? With due respect, I think your statement is rubbish.

hmmm

SyntonFenix wrote: »

The following video is the best explanation of the current situation for the price of gold that I could find. I think he explains it well.

Spotty teenagers in ill fitting suits youtubing from their bedroom is no basis for sound financial planning. If there was a divergence between the "paper" and "real" price, then there would be a simple arbitrage opportunity.

There are two reasons I can see for the decline in gold
i) The US economy is looking healthier, and inflation is moderate and likely to be for the forseeable future. The use of gold as a safe haven by some people is moderating
ii) About 6 months ago, gold was seen as an easy sell to some gullible retail investors. Coincidentally (not), CNBC started running a gold ticker. That supply of greater fools has run out, so the insiders are taking their profits.

stackerman

hmmm wrote: »

Spotty teenagers in ill fitting suits youtubing from their bedroom is no basis for sound financial planning. If there was a divergence between the "paper" and "real" price, then there would be a simple arbitrage opportunity.

There are two reasons I can see for the decline in gold
i) The US economy is looking healthier, and inflation is moderate and likely to be for the forseeable future. The use of gold as a safe haven by some people is moderating
ii) About 6 months ago, gold was seen as an easy sell to some gullible retail investors. Coincidentally (not), CNBC started running a gold ticker. That supply of greater fools has run out, so the insiders are taking their profits.

Half of all Americans are at, or below the poverty line.
And you think the US economy is looking healthier :rolleyes:
You migh want to stop watching CNBC, Fox and the like.

And before you ask for the source of the above - US census.

hmmm

keving wrote: »

Half of all Americans are at, or below the poverty line.

I don't know what poverty is defined as, if it's anything like the Irish definition of "poverty" that probably means they haven't been able to upgrade to the new iPhone. Either way the US economy is growing, and even the Nomura bears think that the US is 2/3 of the way through their crisis recovery stage.

As an aside, the US is heading towards energy self sufficiency which will be remarkable. Years of hearing about "peak oil" and suddenly in the space of 10 years everything changes.

johngalway

SyntonFenix wrote: »

You need to do more homework there. You're basing your comment on a chart, what are the reasons behind the chart? The reasons for gold price rises and collapse in 1980 are different to today.

When you see those "We Buy Gold" shops selling gold bars and coins, then that's a good indication it's a bubble.

shangri la wrote: »

what caused the sudden spike and more importantly depreciation previously?

When gold previously depreciated rapidly what asset class rose? Blue chips?

I freely admit to not being as knowledgeable as other people may be on the subject.

But, I still believe it to be a bubble. Everyone, including the dog in the street is talking about gold, everyone! Again referring to the chart, just look at it, stable-ish for decades then a meteoric rise in value.

Gold, to me, is looking like the new property ladder.

I did consider investing in gold, about 8 or 9 years ago when I had 10k doing nothing in particular. I am still kicking myself that I didn't go for it, hindsight is a great thing.

If I had that 10k again now, I wouldn't put it into gold. When the bubble pops it won't look so rosey.

SyntonFenix

http://www.youtube.com/watch?v=SlDfBpP8pAk&list=UUThv5tYUVaG4ZPA3p6EXZbQ&index=3&feature=plcp

Advice or entertainment?

hmmm

SyntonFenix wrote: »

http://www.youtube.com/watch?v=SlDfBpP8pAk&list=UUThv5tYUVaG4ZPA3p6EXZbQ&index=3&feature=plcp

Advice or entertainment?

Who are these random nobodies you spend your time listening to?

Smith Consulting Group "Products or Services:
Financial Planning Services, Home Security Monitoring, Financial Planning, Low Interest Home Equity Loan and Christian Financial Planning. "
http://www.manta.com/c/mm5szgp/smith-consultant-group

krd

hmmm wrote: »

I don't know what poverty is defined as, if it's anything like the Irish definition of "poverty" that probably means they haven't been able to upgrade to the new iPhone.

No it means losing the roof over your head and sleeping on the streets. I live in Dublin city centre, and in the last few years there's been a shocking growth of homeless people. A lot are not the typical addicts and drunks. They're people who have slipping through the net.

There are tens of thousands of people, who have mortgages they either can't or can only barely pay. Thousands of families are having a really hard time.

Typically, the kind of mortgages and loans families took on, swallowed up a whole income. To lose one income, that typical family is in serious trouble.

What you're talking about is people struggling to eat.

People who might lose their homes. That's hardly being slightly despondent they can't update their I-phones.

krd

SyntonFenix wrote: »

I think you're missing the point and reason for his statement. Every single ETF is not backed by physical gold, they're effectively IOUs. The very same as fiat currency.

Economies and financial institutions around the world are just passing fake, mythical, invisible money around electronically. This is what happened in the Wall St stock market crash of 1929.

An article giving an opinion on ETFs
http://seekingalpha.com/article/281625-how-etfs-have-spurred-the-gold-bubble

Gold ETFs
http://en.wikipedia.org/wiki/Gold_exchange-traded_product

The EFT's are backed by derivatives. Whoever is at the other end of the derivatives trade may be buying physical gold to hedge their end of the trade - that would increase the demand for physical gold driving the price up, also if there was a lower demand for EFTs that would drive the gold price down.

They may not, they may have backed their derivative with another derivative. The EFTs can't trade higher or lower than the physical gold price as there would be an arbitrage opportunity when the EFTs futures mature.

If gold hoarders are dropping EFTs and buying up physical gold - it should cause the commodity price to rise. But the price of physical gold is falling.

But. If the gold hoarders have been hoarding gold for a while, first the price goes up, and when they're satisfied with their hoard of gold, then gold prices fall, because there's less of it being traded.

If all the gold was hoarded, it wouldn't be worth anything, because there wouldn't be a market for gold.

And what makes you think this? From that statement I take it you don't know the history of the US Dollar and what President Richard Nixon did in the 1970s? The history of other fiat currencies? With due respect, I think your statement is rubbish.

Nixon just stopped convertibility of gold when it suited him. What's to stop any government from doing the same, if they've used the gold standard, and it became inconvenient.

With due respect, I think you listen to too many thin foil hat wearing internet kranks.

When you walk into a shop, you need a fiat currency to buy goods. The prices are not quoted in gold. There wouldn't be enough gold to go around if people did.

Kranks have talking up the price of gold for years, with fairy stories - because they're holding gold.

The same as all the sneaks who had property "investments" were trying to encourage more suckers to "get on the property ladder before it's too late".

stackerman

And the alternative is we continue the currency wars around the globe, while countries try to print shed loads of money, to devalue their debt ? And in so doing devalue your savings, pensions etc etc ?

“Overall, the evidence is that today’s (international monetary and financial) system has performed poorly against each of its three objectives, at least compared with the Bretton Woods system, with the key failure being the system’s inability to maintain financial stability and minimize the incidence of disruptive sudden changes in global capital flows.” Bank of England Financial Stability Paper.

I'm not saying that it is likely that we will return to a gold backed currency (by the way, there is plenty of gold, it's just the price that's the issue), but as I said the alternative is inflation. Why do you think the Swiss have the gold Franc (in parallel with their currency ?) And I'd rather take my chances with physical. There is all sorts of talk here re a bubble, but this is not allowing for the MASSIVE, endless printing of money. Again, I'm not saying the price will not drop, if fact it will (several times) but it will perform better then cash.

krd

keving wrote: »

And the alternative is we continue the currency wars around the globe, while countries try to print shed loads of money, to devalue their debt ? And in so doing devalue your savings, pensions etc etc ?

I depends. If the printed currency is used to clear debts (debts that can't be paid otherwise), then it won't have an inflationary effect - the money is already in the system.

If there was inflation, interest rates would rise. So, if you think about it, cash in the bank would earn back what it's lost. With interest rates as low as they are - savings are earning very little.

Without more cash in the system, the investments pensions depend on are not going to perform.

I'm not saying that it is likely that we will return to a gold backed currency (by the way, there is plenty of gold, it's just the price that's the issue),

I just did a rough calculation. The figure it gives me is 22 grams of gold for everyone on the planet. That's three sovereigns each.

but as I said the alternative is inflation.

That might not be a bad thing.

Why do you think the Swiss have the gold Franc (in parallel with their currency ?)

Because they have lots of gold deposits in their banking system. In September the Swiss devalued their currency by 8%, to give the speculators a shock. One London trader lost something like 3 billion. If the Swiss had a run on their gold, they'd soon slam the breaks on too. There isn't, so they can pretend they wouldn't.

And I'd rather take my chances with physical. There is all sorts of talk here re a bubble, but this is not allowing for the MASSIVE, endless printing of money.

Half a trillion euros has just been realised into the banking system by the ECB. No one is saying this will devalue the euro. I'd nearly bet some of it is going to be used to bump up gold. Quantative easing money has ended up being used to speculate on commodities.

Again, I'm not saying the price will not drop, if fact it will (several times) but it will perform better then cash.

It depends on when you got in, and when you get out. If you bought gold at it's peak in the 80s, it would have taken you close to 30 years to make your money back. If you compared it with cash in a bank deposit, it preformed really badly. I haven't done the calculations, but I think even if you bought gold in the early 70s, it wouldn't have performed as well as a bank savings account.

If you bought gold ten or fifteen years ago, maybe it has done better than cash. It might even double it's prices now.

If it falls it's going to fall hard and fast. Both with all the speculators deleveraging and shorting it.

At the minute everything is a gamble.

noworries

krd wrote: »

............ I haven't done the calculations, but I think even if you bought gold in the early 70s, it wouldn't have performed as well as a bank savings account..........

Based on the above quote I decided to do a couple of calcualtions for giggles. Please note I had no intention of skewing the argument one way or the other, although I do own a couple of ounces of Au for reasons of diversification (full disclosure).

I just entered a day (early Feb 1976) at random and saw the gold price was 143.05 usd/oz.

Using a notional 1000 dollars, I 'purchased' just under 7 ozs of gold ;-)

Selling that gold today would yield 11268 usd. However, to maintain the purchasing power of 1976 usd adjusted by inflation would actually nett me 4861 usd profiit.


Putting that 1000usd in an Irish bank in 1976 ( 495 punts) would give me 2,010 punts or 2552 eur or 3317 usd today after 35 years accounting for DIRT and using average interest rates for the period. However, allowing for inflation I would actually have lost purchasing power to the tune of 651 eur.

There would be loads of combinations of when was the right time to buy/sell but using my random date from the 70's and selling today- gold was far and away the better option to have taken in 1976...

quick look at earlier prices look like a better option.... inflation is the silent killer that will eat up your savings like nothing else...

eg.1979 15.86%, 1980 18.25%, 1981 23.15% 1982 12.27% whereas the comparable interest rates on deposit were (approx)
1979 11.0%, 1980 12.0%, 1981 11.5%, 1982 12.5%,

Inflation figures from cso.ie, avg interest rates from tradingeconomics.com, fx rates from fxcentre.com, gold price usagold.com

stackerman

At the minute everything is a gamble.

Correct, and that's why I'm happy with physical. I'm not looking to make a fortune, just do better then cash in either the Bank or Pension :mad:

Anyway, we are not going to agree on the whole, as I think you a good way off on some points. Still thats the fun of life, only time will tell.

FYI, maybe google Minsky moment

krd

keving wrote: »

At the minute everything is a gamble.

Correct, and that's why I'm happy with physical. I'm not looking to make a fortune, just do better then cash in either the Bank or Pension :mad:

I think you're a gambler, and you're doing this as much for fun as anything else.

If you're playing with gold, you like a risk.

I think they're are other opportunities out there, with a high return, but with more risk than pension funds and institutional investors want to (or can) play with. Like those Irish bank bonds the government paid out on recently - if you bought them when they were discounted, the return was over 50%. It's a gamble - but I believe the EU will do anything to avoid a major default. People who've gambled on Greek debt have had huge returns on the bonds that have been rolled over.

There's a lot various government debt out there the institutions don't want to touch - if they do they have to buy insurance, there's not a huge profit in it. But if you're an individual who likes a flutter - the returns could be quite good.

Developing world dollar, or euro denominated debt.

FYI, maybe google Minsky moment

That's why I believe when Gold starts to tumble it will come down like the Twin Towers. I have a feeling, the gold market is surrounded by jackals waiting to pounce. And now they have all kinds of high speed computers, and new instruments for profiting out of a crashing market that weren't there in the 80s.

https://www.youtube.com/watch?v=kn481KcjvMo

Have fun....And don't lose your shirt.

Cavehill Red

I think you may be missing the possibility that large institutions could have a vested interest in driving down the price of gold (and also silver, platinum, etc) and are currently doing so.

In such a scenario, when they run out of the ability to suppress the market, it will ping up to its level, which could be much higher.

I agree with you that this ends in a bubble popping. But I don't think we're near the bubble phase yet, not with active manipulation of the paper precious metals market (the Comex investigation into silver manipulation has been parked for how long now?)

The price of an ounce of silver spot is about 21 euro today. The price of a .999 oz coin of silver is closer to 60. That tells me there is a serious disconnect in the market, and if I wanted metal, I'd want it in my hand and not on paper.

And don't doubt for a minute that there aren't people arbing this, and banking a handy profit from doing so, every day of the week.

shangri la

Cavehill Red wrote: »

I think you may be missing the possibility that large institutions could have a vested interest in driving down the price of gold (and also silver, platinum, etc) and are currently doing so.

In such a scenario, when they run out of the ability to suppress the market, it will ping up to its level, which could be much higher.

I agree with you that this ends in a bubble popping. But I don't think we're near the bubble phase yet, not with active manipulation of the paper precious metals market (the Comex investigation into silver manipulation has been parked for how long now?)

The price of an ounce of silver spot is about 21 euro today. The price of a .999 oz coin of silver is closer to 60. That tells me there is a serious disconnect in the market, and if I wanted metal, I'd want it in my hand and not on paper.

And don't doubt for a minute that there aren't people arbing this, and banking a handy profit from doing so, every day of the week.

why is there such a difference between spot and coins?

the price of platinum seems high at the minute considering the state of the economy of goods that it is used to produce and mainly the automobile industry which is in a lot of trouble.

There is a chance gold is approaching a bubble so its not a time to jump in.

Silver is at the mercy of a small group of speculators so best avoided.

there is too much uncertainty with metals now to be jumping in, in my novice opinion.

Cavehill Red

shangri la wrote: »

why is there such a difference between spot and coins?

There's always some difference obviously - the cost of minting and so on. Then, in parts of the world like here, silver can attract VAT, but usually that accounts to no more than a 7% differential, due to the German VAT rate applying, which is how many large purchasers organise things. Currently the differential is ridiculous. This is because everybody now realises that the spot price no longer represents the price of the metal, but the price of derivatives that have almost no relationship with the metal bar name.

The total value of paper silver traded on the Comex alone is many times the entire amount of available minted silver. Never mind the various ETFs. It's therefore impossible for most traders to hold for delivery, as they will only be paid off in cash, which is the very thing they're looking to hedge against. As a result, the prices of paper silver and actual silver have long departed from each other and are continuing to move in opposite directions - paper down as it is suppressed and physical upwards as demand becomes acute.

Silver's a very small market, complicated by the fact that it is both an investment and industrial metal (much more so than the other precious metals.) Trading it is extremely choppy, especially when there is clear evidence of market rigging. Many have opted to buy and hold against any currency crisis. While the paper price veers up and down, the price to purchase physical investment silver is proceeding slowly upwards.

Cavehill Red

I see you've edited your post with further statements, so I'll address them. I would actually consider platinum a bit of a bargain right now, given it's much, much rarer than gold and historically trades at a significantly higher premium.
And I've already explained that I think we're quite a way off from a gold bubble yet. When the 'Cash for gold' shops turn into bullion shops and there are telly shows promoting gold purchasing, then you'll know you're in a bubble. Bubbles require critical mass, and gold has barely if at all penetrated the consciousness of the vast majority of institutional investors never mind the general public.
Paper silver (like paper gold) is heavily manipulated and as you say ought to be avoided. Physical silver is another matter, though being bulkier than gold it is a less attractive option to those seeking to invest more significant sums into precious metals.
I wouldn't be in the business of advising anyone, but I personally hold both gold and silver, and I'm certainly not selling anytime soon.

stackerman

May be of interest to some here

http://resourceclips.com/2011/12/28/gata-vindicated/#.TvvrJEvhuLk.email

nohow

you should invest in a gold fund with guarantees built in

shangri la

nohow wrote: »

you should invest in a gold fund with guarantees built in

what guarantees?

do they exist?

is the guarantee valid if the sh1t hits...?