Where to invest
- Thread starter spm_uk
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if the dollar tanks then it will take GBP with it and gold will rise significantly in both currencies.
Welcome to the world of the hosing market.
And where did it make 40% last year.? As the largest gap I can see is from around the $750 to $900. And to to this you would have had to time it perfectly.
The only people who suggest gold, are those that have bought gold in a effort to drive the price up.
gold made 40% in pounds, mainly due to the fall of the dollar but not just that. Gold is not a leveraged asset like houses so there is no comparison. Gold is THE asset to be in when there are economic troubles ahead, and thats all i can see ahead for a few years at least.
if you really think that the pound will get stronger in the next few years you are as delusional as gordon brown.
With only £1000 I wouldn't be looking to buy gold, but if you do your cheapest bet is to trawl round the local coin shops/jewellers/antique shops and see if you can pick up full sovereigns for £140 or less, or half sovereigns for £75 or less. Melt value of a sovereign is about £130, but you'll have to pay a bit over spot.
Gold in £ was indeed up about 40% yoy a few weeks back, now standaing at +22%. The US$ price is irrelevant for UK holders, as you buy it in pounds and sell it in pounds.
The idea that the only people who suggest gold and those trying to drive the price up is no where near the truth. People buy gold because they recognise very few investments are performing at the moment, the financial system is screwed, and are scared. They want their money in an asset that is no one elses liability.
Remember, you receive interest on your bank savings because you are an unsecured creditor of the bank and the return you get is your reward for risking it with them. People say "gold does not pay interest" and that is exactly the point. It does not pay interest because it is no on elses liability. Also, houses don't pay interest either, but that has not stopped people diving in and leveraging themselves 10x or more when investing. It's all about capital appreciation - or in the case of gold, avoiding depreciation of the currency as govts desperately try to re-inflate a deflating asset bubble
To be honest for a thousand quid I'd stick it in INGs direct saver account...pays 5% AER
Gold in £ was indeed up about 40% yoy a few weeks back, now standaing at +22%. The US$ price is irrelevant for UK holders, as you buy it in pounds and sell it in pounds.
The idea that the only people who suggest gold and those trying to drive the price up is no where near the truth. People buy gold because they recognise very few investments are performing at the moment, the financial system is screwed, and are scared. They want their money in an asset that is no one elses liability.
Remember, you receive interest on your bank savings because you are an unsecured creditor of the bank and the return you get is your reward for risking it with them. People say "gold does not pay interest" and that is exactly the point. It does not pay interest because it is no on elses liability. Also, houses don't pay interest either, but that has not stopped people diving in and leveraging themselves 10x or more when investing. It's all about capital appreciation - or in the case of gold, avoiding depreciation of the currency as govts desperately try to re-inflate a deflating asset bubble
To be honest for a thousand quid I'd stick it in INGs direct saver account...pays 5% AER
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But at less than £35,000 your risk is 0, as the Gov't backs your investment.
And also, it is feesable that the £ can strengthen against either the Euro or the dollar (though maybe not likely) we're all in this mess together.
I'm saying as soon as some of the big buyers decide its time to sell, it will fall in value drastically.
After all gold is in effect a worthless metal, as it's not used for anything due to its high price. Its only really used as a investment.
I'm under no disillusions about the pound, and I know it will not gain anything, and in all probability is going to go slightly weaker. But I don't like gold as a investment. For me a much better and safer bet is with oil, It's a commodity that is always in use, and at the moment is a very good buy .
One worry I have with Gold is whether a Govt somewhere will panic and sell off a load of its reserves to raise some fast cash. That could cause quite a nasty dip in market value.
Platinum is not that much more expensive than gold at the moment ($820 Gold vs $930 Platinum per Oz. according to kitco) and I'm wondering whether that could be a good long term investment for when the automotive industry eventually picks up again. *scratches head*
Platinum is not that much more expensive than gold at the moment ($820 Gold vs $930 Platinum per Oz. according to kitco) and I'm wondering whether that could be a good long term investment for when the automotive industry eventually picks up again. *scratches head*
i think platinum is still a bit high - if it gets to its long term average of $400 then its time to buy a load.
I like palladium at the moment, i'm not sure how much further it can drop.
I would have thought platinum, Palladium and rhodium would all be poor buys at the minute, with the way the car sales are.
And taking into account we are seemingly moving towards electric / hydrogen cars, or a mix which do not require these for the catalytic converters. And i'm not sure what else these are used for.
And taking into account we are seemingly moving towards electric / hydrogen cars, or a mix which do not require these for the catalytic converters. And i'm not sure what else these are used for.
these would all be necessary in hydrogen technology, especially palladium, thats why i think its more of a long term bet. Also, the russians essentially control the palladium market so i can see it going up as russia becomes more powerful and starts throwing its weight around (as it is already starting to do).
I think it is £50k nowadays, but you must ask your self where the government actually gets the money from to guarantee your deposit. Generally speaking this is through taxation, so you are in fact guaranteeing your own deposit through future increases in taxes to replace the money the govt hands out now to compensate out-of-pocket depositors. Either that or the govt prints the money, devaluing everybodys savings via inflation. Either way the population pays as the govt only has access to YOUR money - they do not have any of their own.
As for the threat of govts dumping their gold reserves to depress the market, they would find willing buyers in russia and china...china for example has stated plans to increase gold reserves from 600 tons to 4000 tons. They are not stupid and may be trying to back out of dollars.
Also there is a "central bank gold agreement" (CBGA) that western banks will not exceed 500 tons of sales per year, and I think last year they did not sell the full 500 tons. The concern is also that a number of CBs have leased gold to bullion banks at say 1% pa interest, who sell it on the gold markets and invest the proceeds at say 5% in govt bonds. This gives them a 4% carry which is fine so long as the gold price doesn't increase -which it has been doing for several years. Eventually they may have to cover these short positions and try and buy the gold back to return to the CBs and that may drive the price sky high. And in such a situation we may find that western banks do not have real gold but instead paper IOU gold that cannot be claimed upon
As far as buying precious metals goes, check out the gold:silver ratio. Currently at 75 or so, which would suggest silver is a better bet than gold, as the ratio generally reverts to 35-50 to 1. I bought most of my silver through goldmoney.com to avoid VAT and coinage premiums, and although you do have to pay about 5% over spot and storage charges you do get allocated silver that you can take posession of if you buy enough for a 1000oz bar (but then you do have to pay the VAT)
I should add that I am about 25% of my net worth invested in gold/silver since 2004, and have done very nicely thank you.
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I would agree it is mostly useless (but not worthless as you say), but it is its scarcity that makes it valuable. Pound notes are intrinsically worthless as there is apparently an unlimited supply, and that is what makes gold valuable.
If you think back to life under the gold standard, it was the gold in a sovereign (a £1 coin) that made the £1 note valuable, not the other way round. Gold is money, not just a commodity, and that is something the world will have to relearn